Productivity key for ‘fragile to agile’ economy

Picture: Steven Scott Taylor
Picture: Steven Scott Taylor
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Scottish businesses must address the key issues of productivity and digitisation if the economy is be transformed “from fragile to agile”, a report today argues.

Launching its 2015 policy blueprint, the Scottish Council for Development and Industry (SCDI) said a number of challenges had to be tackled during what it describes as a “decade of disruptive global changes”.

The report focuses on the areas of underperformance it has identified in the Scottish economy – productivity, innovation and internationalisation – and goes on to make a series of recommendations.

The membership group’s blueprint coincides today with a report from the EY Scottish Item Club which argues that Scotland’s economic growth “needs to find a better balance”. EY has also revised down the country’s output expansion from 2.2 per cent to 1.9 per cent for 2015 and 1.8 per cent in 2016 – compared with UK growth of 2.5 per cent and 2.4 per cent in 2015 and 2016, respectively.

Among the key recommendations from the SCDI blueprint is the establishment of a Scottish productivity commission, modelled on those of Australia and New Zealand, which would provide independent research, advice and performance monitoring to both government and private sectors, under the direction of the Council of Economic Advisers.

It also calls for a network of technology hubs to bring together “innovators, entrepreneurs and creatives with professional support”, the formation of a “genuine partnership” on trade and investment activity, and the setting up of an independent Scottish infrastructure commission to recommend long-term priorities.

SCDI chief executive, Ross Martin, said: “The opportunities and threats before Scotland from global disruptive changes are stark and our economy must make the transformation from fragile to agile.

“Productivity is the principal driver of growth, and to succeed we must collectively tackle this head-on, addressing the key economic challenges of innovation and internationalisation.

“This is not an agenda on which government can deliver alone – we all must take a lead. Underpinned by infrastructure, both physical and digital, the connection of place and the skills of our people, we must meet the challenge of an emerging economy if we are to secure a prosperous future for Scotland.”

The group, which represents some 1,200 organisations including public sector bodies and trade unions, is pushing for the appointment of a “chief digital officer”, reporting directly to the First Minister.

However, Martin stressed that peer-to-peer contact remained a key component of digitisation. “This is about how you can get the most out of people,” he said. “The structures we have can put barriers up in the way of people dealing with people.”

While the blueprint takes a long-term perspective, the SCDI said a “first 100 days mentality” was also essential.