Smarter taxes and better broadband can help Scotland close productivity gap

Speeding up the rollout of ultra-fast broadband and a more targeted tax system are among the measures being urged to help Scotland close its productivity gap.

The latest annual report into productivity in Scotland shows it continues to lag behind competitors on a number of measures.

The annual CBI/KPMG Scottish Productivity Index has revealed that the nation continues to lag competitors across several key indicators.

Although the report’s authors said there are some encouraging signs of improvement, the study notes that more action is needed from both business and government.

The report shows Scotland lags other parts of the UK or international competitors in nine of the 13 productivity indicators including business investment, exporting and innovation.

However, there have been some gains, includes the percentage of premises with access to full fibre broadband. early-stage entrepreneurial activity and business R&D spend.

Key recommendations for the Scottish and UK governments include create a “smart taxation” environment, including using the business rates system to incentivise investment, especially in decarbonisation.

It also calls for the speed up of the roll out of gigabit capable broadband across the whole country to help firms.

Tracy Black, CBI Scotland director, said Scotland’s struggle to boost productivity has been a “stubborn challenge for decades”.

"Scotland does a great job in terms of setting ambitious long term economic goals, but businesses desperately want to see swift progress in moving from high level discussion to impactful delivery.”

James Kergon, senior partner for KPMG Scotland, said: “Despite the obstacles facing us, Scotland must make the most of its strengths in order to grow, including our high numbers of university graduates, a thriving early-stage entrepreneurial scene and a growing share of R&D spending by businesses.”

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