Scotland’s economic strategy should be reviewed urgently, according to a Holyrood Committee

In a wide-ranging inquiry into Scotland’s economic performance, the Committee found that there are considerable challenges in the Scottish economy and that both the UK and Scottish Governments have roles to play in helping Scotland realise the significant opportunities that exist.

The Committee is asking the Scottish Government to update their strategy for growth in light of these challenges and also to take into account the potential economic consequences of Brexit.

Gordon Lindhurst MSP, Convener of the Economy, Jobs and Fair Work Committee, said:

“Economic growth in Scotland over the last ten years is significantly below Scottish Government targets and there is no doubt that the Scottish economy is facing a challenging set of circumstances. This report has sought to highlight some of these challenges whilst also recognising that there are opportunities for growth.

“We have a resilient labour market and a strong business community, but we need to encourage more entrepreneurship as well as ambition within existing businesses in order to strengthen productivity. We found some companies had a ‘fear of heights’- lacking confidence to scale-up and grow. We expect the Scottish Government to work together with the UK Government to recognise the substantial opportunities that exist and closely analyse what policies are working so that both can help bring a sharper focus to growing the economy."

The inquiry consulted extensively with a wide range of businesses, experts and households, including Gareth Williams, CEO of Skyscanner, Jim McColl, CEO of Clyde Blowers Capital, and Jackie Brierton, of Women’s Enterprise Scotland. The Committee heard incisive evidence of success where Scotland is leading in innovation. While traditional industries like oil and gas and construction have struggled, there is encouraging growth within the video games, life sciences, food and drink, and tourism industries. The Committee heard that developments in innovation should be shared more broadly with sectors that are traditionally less productive.

The Committee’s recommendations also include:

• Whilst the creation of the Strategic Board is welcome, the enterprise and skills agencies need to be much more clearly focused on delivering the Scottish Government’s economic strategy.
• There is a need for a consistent, commonly held and settled definition of inclusive growth. This should be reflected in the enterprise and skills agencies' operational plans.
• There should be a robust and appropriately resourced action plan that identifies lead responsibility for key areas of the strategy.
• The economic potential of regions across Scotland must be fully recognised, reducing the gap between the low-performing and high-performing urban and rural areas.
• More should be done to support women in business to access funding and advice.
• In a constantly changing workplace it is essential that people’s skills match employment opportunities, and that workers are supported with job transitions and reskilling throughout their working lives.
• A comprehensive, monitoring and evaluation framework should be put in place to measure outcomes from the Economic Strategy and establish what works.

The inquiry examined Scotland’s economic performance since 2007 - the year the Scottish Government launched its National Performance Framework to set a number of economic targets. These included raising the GDP growth rate in Scotland to the UK level, matching the GDP growth rate of small independent EU countries by 2017, narrowing the labour market participation gap across Scotland and reducing income inequality by 2017.