When he speaks, people listen. They might not always agree but they pay attention.
So when Sir Tom Hunter commissions the influential Oxford Economics consultancy through The Hunter Foundation to look at Scotland’s economic performance, it was always a fair bet that the results would grab some headlines especially so close to an election.
But when you look past the scrutiny of UK and Scottish Government policy and how the nation fares against Scandinavian and other international cousins, the green economy emerges as a linchpin for recovery.
The report recommends “an ambitious industrial policy, possibly centred around Scotland’s renewables industry, tapping into its rich tidal, wave and wind resources”.
This would, it says, “capitalise on the COP26 UN Climate Change Conference scheduled for Glasgow in November and would support the Scottish government’s commitment to net zero carbon emissions”.
The report adds “it is not implausible to suggest that there are business opportunities that resemble those that generated Silicon Valley, several decades ago”.
The report also looks at the Scottish National Investment Bank‘s track record so far.
“Given its wide remit, the £2 billion funding for the SNIB does not appear to be particularly generous” it syas, “But additional funding would only be likely to have an impact on Scotland’s growth rate if there was a clear focus on achieving that as a goal—together with sufficient oversight and transparency to ensure that funds were suitably allocated (and reallocated when needed).”
The main thrust of the study calls for “radical and ambitious policy changes” it says are required for Scotland’s economic performance to be in its words “transformed and significantly boosted within the next 15 years”.
The ‘Raising Scotland’s Economic Growth Rate’ report said it wanted to initiate a national debate with all political and interested parties in the UK and Scotland to help shape policy for transformational growth.
Its aim is to address such issues it identified as “low productivity, poor business birth rate and lack of success with scale-ups that help to explain why Scotland’s GDP per head is a mere 44% of Singapore’s level, 48% of Ireland’s, 68% of Norway’s and 75% of Denmark’s.”
The report found that “it is not realistic to think that the current economic policies of either the UK or Scottish governments will produce a transformation of Scotland’s economic performance”. Indeed, nor will they for the UK as a whole.
It put forward a case for policies that “go beyond current government boundaries#, and considers various options under three headings:
- Increases in government borrowing to stimulate stronger growth in demand and output
- Significant tax cuts and deregulation to improve competition and incentives in the economy
- Large increases in government support for businesses, either directly or through increased spending on infrastructure, education and skills, innovation and the green economy.
Hunter said: “It is for everyone in Scotland, from governments, policy makers and businesses to help solve the problem of poor economic growth that Scotland has faced for too many years. I fully agree with the findings of this far-reaching new report that radical economic policies are needed if Scotland’s economy is to be transformed.
“The report tells us Scotland would need to make changes equivalent in their impact to creating a business comparable in size with Google’s total global output to bring its GDP per head up the level of Norway’s.
“Moreover, we need far more focus in our economic investments not only to make significantly better gains but also to understand what’s working and what’s not.
“But that is only half the picture – we need to embed innovation in health and education and poverty reduction to free up finance to invest in growing our economy.
“I hope the calls made in the report for more, and different, economic stimulation from governments, tax cuts and deregulation, and appropriate and targeted state interventions, for example in renewables, will be listened to and acted upon.
“I’m calling on governments, politicians of all parties, industry and interested parties to work together to pave the way for transformational measures that will give the Scottish economy the significant boost it needs.
“Let’s use Covid-19 to reinvent what our future looks like.”
Richard Holt from Oxford Economics said: “The findings of our report emphasise the scale of change and intervention that is needed to address Scotland’s long-standing economic problems. Much is being done, but if political leaders want to close the gap with comparable nations, then they need to go beyond their present policy offers.”
The SNP’s Kate Forbes, said “We have set out a National Infrastructure Mission, which will see capital investment increase dramatically in the coming years, as well as the Scottish National Investment Bank, to invest in growth businesses, increase support for business R&D, for entrepreneurs and to set out ambitious plans to transform Scotland’s tech sector.”
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Main Image credit: Photo by Carl Jorgensen on Unsplash