Iain Gray: Scotland’s best economic asset is under threat

BREAKING away from the UK would see us lose funding for sciences such as physics. Can the SNP bridge the gap?, asks Iain Gray.

Drawing a contrast between myself and Alex Salmond, I once pointed out that while I was studying the natural science, physics, he was pursuing the dismal science, economics. Cybernat bloggers angrily accused me of insulting economists, but the derogatory epithet was Thomas Carlyle’s, not mine. Perhaps, like Mr Salmond himself, I should stick to the Beano for reference points.

It was just a rhetorical device, and I will be delighted today to see physics and economics come together in Holyrood when I host the launch of an Institute of Physics’ (IOP) report, The Importance of Physics to the Scottish Economy.

The report is timely, given last week’s news that almost a quarter of a million Scots are without work, and the economy has flatlined for the past year. The First Minister denounced George Osborne as an “incompetent Lord Snooty” but Scotland’s unemployment problem is even worse than the UK as a whole, and our economic growth is trailing the UK.

A year ago, SNP ministers were hailing the success of their “plan macB”, but whatever it was, it has failed. Assertions that the economy would flourish in a separate Scotland are all well and good, and the impact of independence on our economic prospects is central to that debate. But we must now look for ways to grow the economy.

Against this gloomy backdrop, the IOP report’s message is both important and optimistic. It examines the contribution of physics-based sectors to the economy, and finds that this is an area which has held up better than others during the recession, and where Scotland is more than holding its own.

Between 2005 and 2010, the total number of jobs created by physics-based sectors rose to 184,000. The comparable figure for the financial services sector is 165,000. Not only have physics-based sectors overtaken financial services in terms of job creation, in 2010 the Gross Value Added (GVA) to the Scottish economy from physics was £8.5 billion, compared to £7bn for financial services, or £2.9bn for tourism. When indirect impacts of physics-based sectors are added in, physics’ GVA contribution rises to £12.5bn.

Relative to other areas of the UK, physics accounts for a greater proportion of economic activity. The profile of physics related activity in Scotland is different too, with only 21% due to manufacturing, compared with 52% in the UK as a whole. Perhaps this greater diversity is one reason why the sector has held up better in Scotland during the recession.

For years economists lamented Scotland’s poor productivity. Traditionally it lags behind England, and looks even worse when compared with the United States. However, Professor Brian Ashcroft, of the University of Strathclyde, recently demonstrated that under devolution the productivity gap is closing, and the IOP report suggests that, here again, physics has played a key role. GVA per worker in physics-based sectors in Scotland is £78,000, well above £70,000 in the UK. More than double the productivity figure for the whole economy, that should make even those dismal economists smile.

So, physics-based sectors contribute more to the economy than financial services and tourism combined, more jobs than the finance sector, and that they do so more pervasively, more consistently and more productively than elsewhere in the UK.

As a physicist, this makes me rather smug. But as a politician, it worries me that sectors like finance and tourism get much more attention than physics. The real lesson of this report is that there is a significant economic prize to be won if we invest more political capital in nurturing science and scientists.

I have written before about Curriculum for Excellence squeezing science out in some parts of Scotland. Physics will suffer most because it is traditionally seen as the “hardest” science, and this report makes clear the economic consequences. If we cannot stop this, then at least we must redouble efforts to get students to choose science in general, and physics in particular, at university. I have long favoured a scholarship scheme, perhaps part funded by industry, to encourage young people into science and engineering courses.

In a similar vein, a previous IOP follow up survey of Scottish physics PhD holders showed that 50% were earning over £50,000. Who knew? The Scottish government is sitting on a proposal to set up a Science Media Centre to promote science in Scotland. They should say yes, and that centre should start to sell the idea of science as an attractive career as well as a compelling calling.

We also have to address the question of the missing women. At standard grade, only 28% of physics students are girls, and that percentage declines through school and university until it hits about 7% for academic professionals in physics. Worse, that figure comes from a report by the Royal Society of Edinburgh which shows that 73% of women who do graduate in science and engineering never work in the sector. Read that alongside the figures for contribution to the economy by physics and weep for the wasted potential.

When it comes to the independence debate too, we hear plenty about the possible impact on financial services, broadcasting and tourism. Clearly physics would continue to contribute to the economy in a separate Scotland. But physics-based sectors include defence and shipbuilding, largely MOD contracts like the aircraft carriers, which simply would not exist post independence.

As for the research which underpins physics, Scotland punches above its weight. But that means we get around 12% of UK research funding. Our share in any negotiated withdrawal from the UK would be likely to be 8.6%. Someone in the SNP needs to explain how that gap would be bridged.

Most people do not know we have a science minister, Alasdair Allan. From him we need a substantive response to this IOP report on the economy, a strategy to tap into the lost potential of women in science, and answers on how science will be protected in a UK break up. And we need him to do that like Billy Whizz from the Beano.

lIain Gray is Labour MSP for East Lothian