Chamber and committees

The increase in expenditure is designed to support the increased international activity of the Scottish economy, and to ensure that we are able to assist companies with that activity. Obviously, that has become more challenging because of Brexit, which highlights the importance of us supporting activity that will enable companies to trade internationally. We will periodically review the focus and emphasis of that strategy.

It is very much like the agenda that Ivan McKee takes forward on the Government’s behalf. We have no immediate plans to revise that strategy, but we keep it under review, and if there are any updates, we can certainly share those with the committee.

What the national strategy is designed to do, and its objective, is consistent with previous ventures: it seeks to give a clear distillation of the Government’s agenda. We are looking to a variety of organisations that contribute to the economic direction of Scotland to ensure that we can realise those ambitions.

The strategy focuses on a range of major themes, including entrepreneurship, market opportunities, the regional dimension of economic policy, skills, the creation of a fairer and more equal society, and—crucially—the concept of delivery and ensuring that we turn our aspirations into practical reality.

The key focus of the strategy that is perhaps different is that it comes at a moment when our economy has to make a substantial change in its profile and focus on moving towards net zero. In a sense, looking back on the strategies over the past 10 or 20 years, we see that there was not the same imperative to change the focus of the economy. The current document and the delivery plans assist in giving a clear idea of how the Government intends to do that, and how we intend to engage organisations in that endeavour.

First, I would say that I think that we are very lucky to have the skills and capability of Mark Logan available to the Government. He is a formidable private sector player who has delivered significant economic opportunities and gains as a consequence of his judgments and decision making, and—to be honest—we are very lucky to have those skills and attributes at our disposal.

In addition, the nature of Mark Logan’s expertise, both at the technology level and in his way of operating, involves skills that will be particularly relevant for the transition that the Scottish economy has to make in the future. Mark Logan has colossal technology expertise, but he has also delivered very successful projects and propositions. The challenge of adapting to net zero that our economy faces, which I just outlined in my response to the convener, involves a significant amount of transition in the economy, so having Mark Logan’s skills to help us in that endeavour is important.

We need to see the fruits of that activity, and we will do that through monitoring the performance of the Scottish economy and the measures that we take forward to ensure that we realise the ambitions that are set out in the national strategy.

We do not have a target in that respect, but the focus of our agenda is to maximise the economic opportunities for Scotland from the renewables revolution that is going to take place. Significant opportunities will arise from the ScotWind process and we hope that others will come out of carbon capture and hydrogen, all of which will enable us to realise significant economic opportunities that will link directly to the work that we must do on the just transition to recognise the need for that, particularly in the oil and gas sector in the north-east of Scotland.

There will—in response to Michelle Thomson’s questions, I suspect—be data sets that emerge about the number of ventures that have been supported, the progress that has been made on employment levels and gross value added, the impact of technology ventures that have emerged and the journey that ventures take.

The Techscaler programme’s aspiration is not only to encourage early-start development, but to build on that to ensure that companies can make the journey from start-ups to scale-ups. The data will enable us to explore the venture’s effectiveness and success. Given the formidable track record of CodeBase here in the city of Edinburgh, I am confident that it has the attributes to enable us to realise our aspirations from the programme.

The first thing that I want to say is that I very much associate myself with the aspiration that Maggie Chapman puts to me in relation to the importance of encouraging a vibrant social enterprise sector. It represents a significant opportunity to contribute to the Scottish economy and create meaningful opportunities.

Scotland has a long track record of social enterprise activity. The global co-operative movement was founded in Scotland, and I had the privilege, as did Fiona Hyslop, of working for mutual life assurance societies that deployed the formidable mutual principles of common ownership within our society. Frankly, I wish that we had more mutual societies just now—we would be better served by them. Social enterprises are the 21st century equivalent of mutual societies. That track record is important.

We need to be mindful of three things. The first is the community wealth building agenda, which Tom Arthur is in charge of. North Ayrshire Council has undertaken some outstanding work in that regard, and we are now trying to apply that more widely.

Secondly, there is procurement. The public sector procures a significant amount from the business sector in Scotland. Procuring a lot of our social care from social enterprises would be a good step forward. I appreciate that companies are not always able to participate in the procurement system. Some of the gateways and access points to procurement can be an impediment to social enterprises, so we are trying to tackle those.

The third thing is that our business development network must support the development of social enterprises, because they are businesses. They are not a charitable sector away in the corner; they are businesses. To their credit, our business organisations—South of Scotland Enterprise, Highlands and Islands Enterprise and Scottish Enterprise—provide business advice to social enterprises, which I very much welcome.

Yes—without a doubt. However, the Techscaler programme recognises the specific opportunity for and necessity of making progress on tech activity, to realise the benefits for the Scottish economy.

I hope that that is not the case, because Government policy should be aligned. As Deputy First Minister, I am responsible for delivery of the Government’s programme, so a lot of my time is spent on ensuring that we have policy alignment, that we have no incompatibilities in our policy programme and that we work to ensure that a cohesive thread runs through all of Government policy. I recognise that that is important in the delivery of the Government’s work.

I would argue that the thread that runs through the national strategy for economic transformation, the programme for government in September, the budget in December, the wider direction of Government policy and the child poverty delivery plan that was published last year shows that there is policy alignment. It is also reflected in the energy strategy that Michael Matheson published last week.

The question of alignment is critical. If there are areas around it that concern members, I will listen carefully to them to ensure that we keep that thread running through all policy.

The question really relates to what the necessary capacity is that we need to have available in the employability budgets to support the return of people to the labour market. We had projected a significant increase in those budgets for the current year, which we have not been able to fulfil because of the issues that I have raised. We would look to support that activity as much as we can in recognition of the effectiveness of such expenditure, so I will monitor the situation very carefully.

I also give the assurance that one of the issues that I looked at in taking the decision in question was the capacity of programmes to deliver support to individuals. There is almost a demand-led element to the employability programmes. If we see during the course of the financial year that demand for them is rising and we are finding it difficult to meet the demand in the labour market, I will obviously look to address that issue during the financial year, if possible.

I think that the experience speaks for itself. Industrial action is enormously disruptive to the operation of our economy and society, so minimising industrial action by resolving industrial disputes is a very high priority for me. We regret the fact that we have had some industrial relations difficulties and that some disputes have led to strike action. We try to minimise that. We are going to extraordinary lengths to be available and accessible to trade unions in order to resolve issues. The Cabinet Secretary for Health and Social Care and I will engage on such matters again in the course of this week.

The difficulties created by the lack of expansion of employability programmes are, for me, not as great as the disruption that could have come from industrial action, had we not resolved the issues that we have resolved.