By Mark Bevan, Chief executive, Scottish Council for Development and Industry
HOWEVER you cut the data, the Scottish economy is not growing a strong rate. The global picture has been challenging but Scotland has grappled for years with a series of long-term structural economic fault lines that has meant that we continue to lag behind our counterparts.
The initial findings of the Fraser of Allander Institute report released last week goes even further and suggests that Scotland is stuck in a cycle of weak growth. A number of SCDI’s senior members received a briefing from the Fraser of Allander Institute on the contents of its report, due to be published in the next few weeks, on Friday and there was one very clear area of consensus - we must respond to Scotland’s global economic challenge.
There are signs that our oil and gas sector may be picking up, although this recovery may not return output fully to previous levels. It has been ten years since the Scottish Government set out its targets for the Scottish economy and we have just seen the publication of a set of recommendations, through the Enterprise and Skills Review, that are designed to reshape the system of business and enterprise support. Now is a good time to take stock and, crucially, consider the choices available to us in terms of our response and key principles within which that response should be framed.
The SCDI position, and the position of our wide ranging membership from the public, private and social economies, is clear - a successful, prosperous and dynamic Scottish economy is one in which everyone can equally contribute and equally benefit.
The Scottish economy has significant strengths, and we should not underestimate those strengths. However, the challenges we face are numerous and unprecedented resulting in an environment where generating any sustainable growth is difficult.
The mistake here would be to continue with the status quo, where we go on pretending to ourselves that the situation we find ourselves in will somehow “blow over” by itself and exonerate ourselves of responsibility because the mitigating factors are external and beyond our control. We must face the reality that this is the new normal and work together to identify what we can, and should, do to create more prosperity for the good of business and society.
This involves asking ourselves the big and difficult questions of our age. How can we fund care for our rising older demographic when real wages are being squeezed? How do we establish ourselves as a global economic player post-Brexit? How do we tackle the universal problem of climate change? How do we meet the new cyber security imperative in an era of increasing technological disruption?
It involves a candid and critical assessment of how we develop and implement economic policy in Scotland. This may result in answers which are both uncomfortable and unpopular. But fundamentally, we must ask ourselves whether our present strategy and direction in Scotland is up to the task.
Understanding and debating these issues in a frank way, bringing together the intelligent minds and talent Scotland has in abundance with challenge and rigour, is critical to creating a strategy to combat these challenges and the uncertainties they present.
SCDI recognises the value of high quality, reliable data in developing applied policy responses. As a result, we have embarked on a new strategic partnership with the Fraser of Allander Institute to work out how a new, collaborative narrative that can kick-start an economy within which everyone can contribute and benefit equally.
Through this partnership we will begin the process of shaping the principles of a strategic approach which takes account of our “new normal”, but one thing is clear - Scotland faces global economic challenges and we must respond.
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