Scotland's Economy

Making sure everyone benefits from growth

February 11, 2016 by Crawford W Beveridge CBE No Comments | Category Economy

Last week, I chaired the third meeting of the First Minister’s refreshed Council of Economic Advisers.

The Council’s role is to be an independent advisory group to the First Minister. We’re a sounding board for ideas; we act as a ‘critical friend’ to the Scottish Government, and put forward suggestions we think may make a difference in areas the First Minister has invited us to consider and advise upon.

Following the Government’s Programme for Government for 2014-15, the Council’s remit was refreshed. Previously, we were tasked with advising the then First Minister on the recovery and jobs, economic levers, and internationalisation. Our remit is now a wider one: we’ve been asked to advise on actions to improve the competitiveness of the Scottish economy, and on actions to tackle inequality – the twin pillars at the heart of Scotland’s Economic Strategy.

Within this, we’ve been taking forward a challenging but exciting work programme: advising the Scottish Government on the steps that can be taken to and develop and promote inclusive growth, foster a culture of innovation and research, and better measure Scotland’s broader economic performance.

Each of these are important facets of the Economic Strategy. They are areas where Scotland faces well-known challenges, but where Scotland also has important strengths, and perhaps the opportunity to be a world-leader.

Take Inclusive Growth, for example. The international evidence is reasonably clear – growing inequality is bad for social cohesion and economic growth.  Scotland is not alone in facing the inter-related challenges of trying to improve economic performance, broaden economic opportunity, and spread the benefits of growth more equally. However, Scotland is at the forefront of countries building inclusive growth into their economic strategies, with the OECD recognising Scotland as an incubator for an inclusive growth approach.

As a Council, we’ve been helping the Scottish Government to think through what more can be done to drive inclusive growth. We’ve drawn on Scottish evidence and international experience to help identify the specific aspects of inclusive growth that are most important for Scotland. We’ve been advising the Scottish Government on the development of its strategic policy framework and policy making tools in this area, to help ensure that economic and social policy can reinforce each other. The Council has also been considering ways in which cornerstone policies, such as the Business Pledge, could be developed and expanded in the future.

Similarly, we’ve brought an international perspective to bear on Scotland’s innovation challenges. We know that Scotland is already an innovative country with a number of enviable strengths, such as world class universities, and a number of highly innovative firms across a range of sectors. However, we also know that Scotland’s business innovation performance lags behind international competitors across a range of metrics, from expenditure on research and development, to the proportions of businesses that are active innovators. The Council, along with other groups like the Scotland CAN DO Innovation Forum, has been helping the Scottish Government to think through the challenges in this area, and focus on potential avenues for reform.

In each of these areas, the Council has brought a wide range of academic and business expertise to bear, along with an international perspective. We’ll be providing our advice to the First Minister in the coming weeks, and we look forward to continuing to engage with her and support the Scottish Government in these areas in the future.

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