We are right to celebrate the fact that unemployment is at its lowest level for more than eight years, but it’s worth taking a closer look at the jobs market in relation to Scotland’s long-term prosperity.
With Scottish economic growth having lagged behind overall UK growth levels since April 2015, it’s clear that we must keep working hard to keep growing the proportion of adults in skilled work and boost Scotland’s productivity. Sourcing the right people with the right skills is fundamental to the growth and ongoing success of any business.
Tackling the productivity shortfall is perhaps the greatest long-term challenge facing our nationPhilip Grant
A recent report from Lloyds Banking Group and the Manufacturing Technologies Association reinforces that picture. It gathers the views of more than 1,500 UK companies, predominantly SMEs, and tracks the overall “balance” of opinion on a range of important performance and confidence measures, weighing up the percentage of firms that are positive in outlook against those that are negative.
In Scotland, it found that over 57 per cent of business leaders identified a skills shortage as a significant obstacle to productivity growth for their business. However, it’s heartening to see that over half (55 per cent) of Scottish businesses are taking a proactive approach to this challenge and have a plan in place to improve business productivity.
With a plan often comes the financial outlay to achieve it. The scale of that investment over the next 12 months is also encouraging, with almost three in ten Scottish businesses (29 per cent) looking to drive between £50k to £250k into their organisations to improve productivity in the next 12 months. Almost half (48 per cent) plan to focus that investment on skills and training to boost productivity growth, followed by a third on software upgrades.
From our report, Scottish business leaders told us that the key areas they see a shortage of skills or knowledge that is restricting the productivity of their businesses is software development (18 per cent), an understanding of customers (14 per cent) and design capabilities (11 per cent).
Addressing some of these perceived restrictions, we have trained up more than 4,000 “Digital Champions”; colleagues who have pledged to improve the digital skills and financial capability of at least two organisations each year, helping provide the much needed skills that Scottish businesses are looking for. Alongside our broader support and funding for businesses, it’s all part of our strategy to help Scotland prosper in the long term.
Tackling the productivity shortfall is perhaps the greatest long-term economic challenge being faced by our nation. It is only by working together – businesses, banks, government and stakeholders – that we can find all the pieces needed to solve this productivity puzzle.
Philip Grant is chairman of the Scottish executive committee at Lloyds Banking Group