Chamber and committees

We are still focused on that target. We carefully monitor the progress of the export strategy, on which my colleague Ivan McKee leads.

Gary Gillespie might want to answer the question about the impact on the export target, because his team have been doing extensive work on monitoring the impact of the war in Ukraine on our trading arrangements, as well as on our resilience as an economy.

That is a big focus for us. The brand is identified in the strategy as one of our strengths and as one of the areas of greatest growth.

We already know that, in Scotland, we have more assets under management that is defined as ethical than would be our proportional share in the market. There has already been disproportionate growth in ethical financing, so there is a huge opportunity to position Scotland’s brand as being distinct from that of the rest of the UK. That is largely because we have a well-known and well-regarded financial services industry in Scotland, and because we have, on our doorstep, significant opportunities to connect what our financial services are doing with our natural assets, for example. I refer to my point about the significant opportunities in that regard.

Just a fortnight ago, we launched the Global Ethical Finance Initiative with none other than Mark Carney, who was the keynote speaker and with whom I shared a panel. The issue is firmly on his radar, and he is conscious of the work that we are doing. We had a lot of interest from around the world in that launch and in what we are trying to achieve. Such initiatives set Scotland apart. Of course, we want to build on the legacy of COP26, in particular.

On the question about branding, we have set out a plan through the Global Ethical Finance Initiative. We are working on it, and we are keen to position Scotland as the home of ethical finance.

What do you suggest is missing?

Compared with other independent Government strategies, this strategy is unusual. We did some comparison work, and pretty much all other international, independent Governments have far more tools and levers at their disposal. Macro, fiscal, economic and monetary levers are all reserved. Trying to build an economic strategy is quite remarkable when, for example, we do not have any control over migration, the vast majority of tax powers, international trade and some regulation.

You are right to say that our unemployment rate is 3.8 per cent, which is lower than the UK’s unemployment rate. From that perspective, accessing additional labour is hugely challenging in a country that has always welcomed inward migration and that now has a demographic outlook that indicates that we absolutely need to build and extend our working-age population. It is a huge challenge.

One of the actions in the strategy is around talent attraction from the rest of the UK. To date, Scotland has done very well on that, but we need to do even better because, right now, our businesses and industries are crying out for labour. There is an acute labour shortage, but we have no capacity to manage visas or ensure that, once we have attracted individuals, there is an easy route for them to get here.

We have engaged with the UK Government’s refreshed shipbuilding strategy because of its opportunities for Scotland, in particular. We also recognise that that is one of the most powerful arms that the Scottish Government has for procurement at a time when public finances are not plentiful as the Chancellor of the Exchequer tightens the purse strings, post-Covid. Quite clearly, there will be opportunities for ferries—in Scotland and outwith it—when those links are developed.

However, to cut a long story short, I note that procurement is a key arm. It is an area that we reference alongside our spending power to create new opportunities for Scotland, and it goes right to the heart of developing a supply chain. Under project 6 in the strategy, which is on development of Scottish supply chains, we specifically talk about our strategic approach to public ownership, so that public companies are managed, developed and initiated for the public good. That relates to what you asked about.

I think that they will. Again, I refer you to the two documents that have been published: the analytics paper, which is quite a weighty document, and the document that sets out the emerging actions, which is an easier read.

There are two issues. One is that we had given a commitment to publish the strategy document as quickly as possible after the election and, obviously, there was some delay because of the emergence of the omicron variant over the winter period.

The other issue is that the agents of delivery are not all within Government. For example, with regard to health, the national health service reports directly to the Government, and all of it, in its entirety, is in the public sector. However, with regard to economic growth, 70 per cent of the agents of delivery are in the private sector. That means that we need businesses, entrepreneurs and academics to be on board with the strategy, and they need to play their part in the delivery and implementation. You will see in the document that, next to each of the actions, we have detailed who we think owns each one, and, in order to deliver an implementation plan, we need to work with them. That is why we believed that it was more important to publish high-level actions and then work with those people on the implementation plan.

It is good to reference that growth in productivity over the past 10 years in particular.

Productivity is an issue with which a lot of developed countries are grappling just now. In the strategy—there is more analysis in the analytics paper—we identify a mixture of business investment and the need to improve business productivity. That mixture includes specific investment opportunities. It also includes increased digitalisation. We know that more businesses have access to, for example, superfast broadband than use it to its full extent.

Alongside business investment and digitalisation, we need to address workforce matters. We need to ensure that our workers have the skills that they need to be as productive as possible.

Quite clearly, productivity is one of the most important metrics for not just improved economic performance but wellbeing, because it drives up wages, improves work-life balance and, ultimately, positions Scotland internationally. That is on the private sector side.

On the public sector side, we have a role when it comes to improving infrastructure. We have set out the second strategic transport projects review, which is under consultation just now, to ensure that we are investing in the right infrastructure to improve productivity. That is my quick summary of what we are talking about.

There is one other part to our actions that I am hugely supportive of, which is the notion that it is not a mark of success to improve national productivity while leaving parts of the country behind. We must identify the building blocks and try to work with every region in Scotland to improve regional productivity, which will contribute to national productivity. There is a big focus on not forgetting any part of the country or leaving any part behind. In terms of the measurement, some regions are coming across as more productive right now, which is due to the skills and industry mix. We need to work with those parts of the country that need additional Government investment and support for business.

I quoted two independent analysts.

The STUC makes a significant contribution on this issue, and I know that it is interested in helping us with delivery. On the launch morning, there were at least two representatives from unions, including one from Unite, who specifically said how pleased they were to see fair work built into so much of the strategy’s work.

The programmes of action that we have chosen are based on evidence, but we recognise that economic growth and prosperity have a purpose, which is to ensure that we have a fairer and more equal society.

Some of the initiatives in the strategy are pretty pioneering from a Scottish perspective, not least building conditionality into support for business, ensuring that we focus on underrepresented groups and ensuring greater payment of the real living wage across our economy. Those are all in line with the STUC’s requirements. We are committed to developing sectoral fair work agreements with industry and to working with trade unions.

There is a lot in the strategy that will deliver what the STUC and others have looked for regarding fair work and greater equality.

Interestingly, I posed a similar question to various advisory council members and to a lot of the people with whom we consulted. I asked what needs to be done to deliver a step change. By and large, the feedback was that we know what to do—I am sure that the committee and the Government are mostly aligned on what needs to be done for the Scottish economy—but we need to improve our ability to get it done and to be focused, determined and ruthless in our execution of the strategy during the next 10 years.

When we look at international examples of models that involve Government-led national strategies, we see that what often separates the successful ones from the unsuccessful ones is that, in the successful ones, there is consensus across political parties, Parliament and Government about what needs to be done. That means that, irrespective of the challenges that emerge, those Governments are able to deliver, because whoever forms the Administration knows what needs to be done.

One thing that makes the strategy stand out considerably is the ruthless focus on delivery. Of course, that will never grab a headline. There is a lot in this document that will grab headlines, particularly around entrepreneurship, but that focus on the execution of what we know we need to do and on streamlining our ability to do it is key.

There is one smaller area that is equally important, and that is the new opportunities that have emerged. When the previous strategy was published, in 2015, we knew that Scotland had great strengths when it came to our natural assets around energy, but in the past few weeks we have seen the announcement of the world’s largest floating offshore wind technology. That is remarkable, but it will be effective only if we can develop the supply chain and establish the businesses that accompany that. Those massive, momentous opportunities that are recognised the world over are new, and the strategy sets out in detail how we can make the most of those opportunities and, basically, build businesses and deliver jobs over the next 10 years.