With the political and media focus on the rise of scepticism about the European project – particularly south of the Border in the form of the dramatic rise of Ukip – and of the impending Scottish independence referendum, it is easy to forget the wider “megatrends” that are reshaping the world around us. These include the extraordinary rise of emerging economies – leading to the world’s economic centre of gravity moving back to Asia – over the past 20 years; the movement of people to urban centres, in which close to half the world’s population now live; the challenges of meeting energy, water and food needs of a world population of more than 7 billion with a changing climate; and the impact of the digital revolution.
McKinsey’s, the management consultancy, notes wryly that more text messages are now sent every day than the population of the planet; that more information is created every two days now than all the information put together from 0 – 2000 AD; and that the number of global “middle class” will double to over 2 billion in the next ten years, all of whom will expect access to the energy, mobility, water and food services to which we have become accustomed.
Regardless of the outcome of the Scottish independence referendum or, indeed, any putative EU referendum in 2017, these “megatrends” will continue to shape the economic and social challenges and opportunities facing Scottish public, private and community sector organisations in the next decade.
And Scotland has many of the attributes needed to thrive in this emerging world: a skilled workforce; an effective entrepreneurial ecosystem with outstanding universities; and public support frameworks to support the development of our knowledge economy. In particular, on issues of water, food and energy, Scotland’s “know-how” in management and innovation, as well as its technical expertise, is widely acknowledged. This provides a tremendous opportunity to share our knowledge and benefit economically.
For example, in many developing parts of the world, communities rely on oil for energy generation, as well as transport. With the cost of oil persisting for many years above $100 per barrel, viable cost-effective alternatives already exist in the form of renewable generation and “smart” or energy-efficient technologies. Yet delivering the energy transformation in these countries requires engaged communities, a skilled workforce, an effective supply chain, alignment of government regulations to support the change, and financial capital. These countries and major finance institutions, such as the international development banks, are seeking the “know-how” to enable these energy transformations to be made, at scale.
This is where Scotland has huge advantages: it has both the “know-how” to support this energy transformation, and the capacity for joined-up approaches between public and private enterprises. One example is an InterAmerican Development Bank project to support capacity building of low-carbon skills and renewable energy generation across the Caribbean. The Edinburgh Centre of Carbon Innovation (ECCI) is leading a pan-Scottish partnership, including private, public and university sector partners, to provide Scottish “know-how” into this initiative. There will be opportunities for further exporting this know-how into cities and communities across Latin American countries, as they seek to transform their energy use in the coming years.
Similarly, much has been written about the emergence of China as a global power. One of the side effects of this rise has been a huge increase in the wealthy and middle-income Chinese population. Like us, they object to polluted air and water, and expensive energy. And this is forcing a rapid change in government policy: the need to ensure a better environment in which to live is becoming enshrined in their five-year government plans. In inimical Chinese style, old inefficient industry or production plant are being forced to close, to be replaced by more modern, less polluting plant. This extends to power generation, where China is the biggest single investor in renewables around the world. This year alone, China is anticipating installing over 50GW of renewables in the form of onshore wind, solar and hydropower. By way of reference, the entire Great Britain electricity grid has just over 80GW of total installed capacity, including coal, gas and nuclear plant.
Again, Scotland has much to offer. The ECCI, in partnership with public, private and university partners, is intending to set up a Low Carbon Knowledge Exchange office in Hong Kong at the end of this year. This is designed as a soft landing pad to enable Scottish companies to engage with the huge emerging markets for products and services to improve air and water quality, waste management, and provide for energy-efficient buildings within the Pearl River Delta region of China and beyond. It will provide the space and place to share knowledge between Hong Kong and Scotland and builds on a Memorandum of Understanding signed to that effect between the two respective governments last year. It will complement other knowledge exchange initiatives by universities, for example on carbon capture and storage “know-how”, elsewhere in China.
What could stop us? Scotland has all the attributes to make a positive impact around the world – and receive huge economic benefit – with its low-carbon “know how”. Regardless of the near-term political outcome, the key will be whether Scotland is entrepreneurial and confident enough to take advantage of this opportunity.
• Andy Kerr is executive director of ECCI (Edinburgh Centre for Carbon Innovation) www.climatechangecentre.org.uk