Scotland’s economy: Vision of new pathway to prosperity revealed

Graduates such as these are seen as key to Scotland's future. Picture: Phil Wilkinson
Graduates such as these are seen as key to Scotland's future. Picture: Phil Wilkinson
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A HIGHLY educated workforce exploiting emerging international markets will lie at the heart of a new Scottish industrial revolution, according to some of the country’s foremost experts.

A flood of university-trained “skilled thinkers” in key sectors, such as engineering and luxury goods, and the harnessing of new marketplaces, such as Brazil, are among the measures called for by business and education leaders in a series of in-depth interviews in The Scotsman.

Wave power expected to play crucial, long-term role in Scots economy. Picture: Jane Barlow

Wave power expected to play crucial, long-term role in Scots economy. Picture: Jane Barlow

Lena Wilson, head of the national economic development body Scottish Enterprise, today sets out plans to open two new offices in Brazil to foster a taste among its burgeoning middle class for Scottish luxury goods.

Jim McDonald, principal at technology powerhouse Strathclyde University, insists tomorrow that enthusing youngsters for the future will form the basis of an economic renaissance.

And Scotland’s intellectual capital and support for “skills” and “thinking” are among the key issues set out on Thursday by Philip Grant, the new head of Lloyds in Scotland.

Professor McDonald says: “You get young people excited about what Scotland has looked like over the last 150 years, and then you get them excited about the next 50 years – life sciences, drug discovery, low-carbon energy, new manufacturing process, aerospace, space technologies, finance and business services, information infomatics.

Fields such as life sciences are crucial to Scotland's future prosperity. Picture: PA

Fields such as life sciences are crucial to Scotland's future prosperity. Picture: PA

“Scotland has decidedly world-class capability in all of these areas, and what we need to make sure is that everything we are doing, it is the human capital that makes the difference.”

Scottish Government finance secretary John Swinney welcomed the “positive ideas” that will complement the efforts under way to boost growth, while Labour finance spokesman Ken Macintosh said they formed an “important platform” for the country’s key thinkers.

Other leading business and industry experts also backed the call for action to stimulate the economy, which comes at a time of flatlining growth in Scotland, while unemployment has more than doubled in recent years to reach 234,000 – with 100,000 16-24-year-olds on the dole.

Ms Wilson says today that international trade will be pivotal in Scotland’s future growth and, with whisky exports to Brazil rocketing by 50 per cent last year, she plans to open two offices in the South American giant.

“There are massive opportunities out there. Look at something like Brewdog (the independent brewer based in Fraserburgh). I think something like 80 per cent of their turnover is now accounted for by overseas sales.”

Blocks to this growth should be dealt with firmly, she argues. Both UK and Scottish ministers have planning restraints and regulations in their sights. The enterprise chief insists firms have told her that they rate Scotland’s engineering graduates as the best in the world.

“If you graduate with an engineering degree just now, you can name your job,” she says. “I’m not saying engineering is the answer to everything, but in the next five to ten years, if you are in that pipeline and coming out you are really almost 100 per cent guaranteed a job. These kids are starting on salaries in the high 20ks. Excellent salaries, which then go up very quickly.”

And she voices concern about the continuing trend towards families preferring traditional subjects, such as accountancy, medicine or law: “There’s definitely something about what parents say to their children. Do they understand the economy? Do they understand what is happening? I have huge frustrations about that.”

David Watt, executive director with the Institute of Directors in Scotland, said yesterday that “internationalisation” was an increasingly important issue for the Scottish economy.

“All Scottish companies, even from a start-up stage, need to know and understand international markets and Brazil is a key part of that,” he said.

“The world is not actually in recession; the western world – western Europe and the USA – is in recession. Large parts of the rest of the world are still very much open for business.”

The education system should be more prepared from pre-school onwards for “preparing people for work”, as well as for the rest of their lives, he added.

But firms have had an “encouraging” first quarter in Scotland, according to the feedback he has received from members.

“There are a number of companies who are quite upbeat about order books,” he said. “Until the eurozone is sorted we’ll still have problems, but I do think that on the whole there is a slight air of optimism about.”

Alan Simpson, chairman of the Institution of Civil Engineers in Scotland, insisted the profession would play a pivotal role in future economic growth.

“Investment in civil engineering really drives the economy, and it’s been shown that if you spend £1 on civil engineering, you get £3 back in terms of the economy,” he said.

“Parts of the civil engineering industry are doing well at the moment and are well supported by the government, but we must ensure that carries on.

“It’s not just the direct investment, it’s the need for the infrastructure that’s provided by civil engineers which allows other industries to develop. You need good roads in order to get all of our goods to market.

“We need a healthy energy sector to drive our industry.“

Prof McDonald said many firms across Europe and North America were repatriating manufacturing bases from the Middle and Far East, realising that they needed the expertise, research base and talent in Scotland and the UK if they wanted to keep pace with new technologies.

The way Scots universities work together on all this gives the country an edge, he says.

“Our research pooling is the envy of Europe.” And he says that applies to more than just energy: “In life sciences, in engineering, in physical sciences, the universities can be a very important catalyst for change.”

He adds: “We have very high-quality students; the entry requirements here for an MEd in engineering is 4As and a B. We attract and maintain excellent students.”

Mr Grant, the new chairman of Lloyds’ Scottish Executive committee, cited the burgeoning level of Chinese students doing engineering, on electrics and life sciences as a pointer to the future.

“We need to develop intellectual capital in our country. We are never going to be a low-cost economy.” There must, he says, be an emphasis on supporting “skills” and “thinking”.

“It is a race for intellectual capital, and if we don’t focus, it could race away from us.”

He notes. “In this world, you need to be making things or serving other parts of the global economy. Empires have come and gone over time.”

Mr Swinney said yesterday there were signs of recovery but a “big push” of capital investment was still needed.

“I welcome all and any positive ideas that can grow Scotland’s economy and provide jobs and economic growth to complement our range of economic interventions,” he said.

“Through our enterprise agencies, we are strengthening Scotland’s economic links in overseas markets. These efforts are paying off, with the latest Bank of Scotland PMI report showing positive signs of economic recovery in Scotland’s private sector, with March’s PMI rising at the fastest rate for a year, and employment growth in Scotland faster than across UK as a whole.

“And the Index of Scottish Manufactured Exports shows annual growth in the volume of manufactured exports of 2.7 per cent to the third quarter of 2011.

“These developments are positive indications of economic recovery in Scotland, but the process of recovery needs the big push of increased capital investment.

“We have a £300 million list of shovel-ready projects, to support jobs and benefit communities all across Scotland, which we submitted to the UK government at the request of the Prime Minister, but it was ignored in the Chancellor’s Budget.”

Labour finance spokesman Ken MacIntosh added: “I welcome this debate about how we can get Scotland moving, and I congratulate The Scotsman for setting out a platform for fresh ideas from some of our leading economic thinkers.”

He added; “At the moment we seem to be bumping along the bottom with no real prospect of that changing, and the fear is that the stagnant growth we expected to endure for just a few years continues for longer.

“Scotland can do better and will do better if we are bold and we are open to do things differently,” Mr MacIntosh said.

“We need to look and listen to new ways of doing things, so that we can achieve the diverse and balanced economy Scotland needs.”