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£25bn prize awaits

Taskforce call to boost Scottish productivity

Hugh AitkenCBI Scotland is calling for the creation of a business-led productivity taskforce to focus on driving productivity growth. 

It claims there is a £25 billion prize for the country over the next decade if the country can tackle its chronic productivity problem.

In a new report, Pursuing Prosperity, Why Regional Productivity Growth Matters for Scotland’s Future CBI Scotland outlines the specific scale of the challenge for businesses and policymakers in Scotland and proposes evidence-based measures to address it.

Improving productivity and unlocking growth across Scotland’s regions could increase the size of the economy by as much as 15%, according to the report. 

The report shows that while productivity performance in Scotland has caught up with UK performance over the last decade, it still falls short of international competitors.

It uncovers vast regional disparities in productivity across Scotland, with the highest performing local authority found to be more than 50% more productive than the lowest. From new research, four drivers of regional productivity difference across Scotland were identified:

  1. Educational achievement and skills training
  2. Transport and connectivity
  3. Management practices and innovation
  4. Exporting 

CBI Scotland Director Hugh Aitken said: “Against a backdrop of EU negotiations and new revenue raising powers for the Scottish parliament, there has never been a more important time to focus on improving productivity across Scotland.

“If we’re serious about generating sustainable, inclusive growth then unlocking regional productivity must be a priority.

“While productivity gains for Scotland overall should be welcomed, too many regions are being left behind. By bringing government and business together to focus on these four drivers we can go some way to making Scotland a more attractive destination for investment.

“With EU negotiations beginning this week, we hope that this report can be a timely reminder to the Scottish and UK governments of the need to remain focussed on the economy.”

Recommendations for education and skills:

  • Create and fund more high quality vocational options for 14-18-year-olds that have parity of esteem with higher qualifications.
  • Allow apprenticeship levy payers direct access – and flexible use of – levy funds.
  • Collect data centrally on frequency of business/school interactions in each local authority.
  • Encourage businesses to work more closely with schools and offer meaningful work experience for young people.
  • Above all, the UK government must ensure that our future relationship with the EU includes an immigration system that provides Scottish businesses with the skills and labour they need to succeed.

Recommendations for transport and connectivity:

  • Prioritise the completion of the existing transport infrastructure commitments and improve connectivity between Scotland’s City Deal regions and with key UK markets.
  • Make access to skills and labour easier for firms by reducing journey times within local areas.
  • Further explore the potential impact of the reduction and eventual abolition of Scottish Air Passenger Duty.
  • Ensure digital connectivity is integrated into all major planning and infrastructure decisions.
  • Increase broadband access and reliability.

Recommendations for management practices and innovation:

  • Ask the Scottish Government to set a concrete target for combined public and private R&D spending in Scotland.
  • UK government to work with Scottish Government to explore options for involvement in networks such as Horizon 2020 when the UK leaves the EU.
  • Ensure UK government uses the industrial strategy challenge fund to complement existing initiatives in Scotland.

Recommendations on exporting:

  • Ensure a joined-up conversation between the UK and Scottish governments so Scottish businesses can make their voice is heard as EU negotiations progress.
  • Encourage exporting firms to share best practice and participate in programmes to help non-exporting firms achieve their ambitions.

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