To ask the Scottish Executive what criteria it will use to measure progress towards Enterprise and Lifelong Learning targets 1 to 3 in Draft Budget 2005-06.
Enterprise and Lifelong Learning’s targets 1 to 3 refer to increasing business expenditure on research and development (R&D), improving the productivity of Scottish industry, and improving Scotland’s entrepreneurial performance respectively. Progress will be measured in each target as follows:
Target 1 – Increase business investment in research and development compared to Organisation for Economic Co-operation and Development (OECD) competitors.
An increase in business investment is defined as an increase in total R&D expenditure by businesses in Scotland as a proportion of Gross Domestic Product (GDP), as published annually by the Office for National Statistics (ONS) in “R&D Statistics”. Any increase will be measured relative to the average figure for all OECD countries, as published by the OECD Economic Analysis and Statistics (EAS) Division of the Directorate for Science Technology and Industry (DSTI). An increase relative to the OECD average will be where the Scottish figure increases as a proportion of the OECD figure.
Target 2 - Improve productivity levels in Scottish Industry compared to OECD countries.
Productivity levels in Scottish Industry are defined using GDP per worker for international comparisons, and Gross Value Added (GVA) per worker for Scotland. Both measure the value of goods and services produced in an economy. OECD competitors are those countries included in the ONS Productivity database which relates to the G7 countries and includes USA, Japan, France, Germany, Italy and Canada.
Scotland’s performance against this target will be measured using bi-annual data from the Department of Trade and Industry (DTI)’s regional competitivenessindicators. This data compares each region of the UK against the aggregate UK performance, which is indexed at 100. International comparisons will be made using GDP per worker indices from ONS’s international comparisons of productivity series. These are also available on a bi-annual basis, with new data being released each September. Therefore, Scotland’s performance will be evaluated annually. As the UK is set at 100, an index above 100 indicates better relative productivity for Scotland compared against the UK.
Target 3 – Increase entrepreneurial activity over time.
This target is measured using annual data on VAT registrations per 10,000 of the resident Scottish adult population. The number of enterprises registering for VAT each year is an indicator of the number of business start-ups. It excludes most of the very smallest one-person businesses. The number of VAT registrations is measured per 10,000 persons aged 16 and over, which are taken from the annual mid-year population estimates. This allows the calculation of the number of VAT registrations per head of the adult population. An increase will be deemed to have taken place if the number of VAT registrations per head is higher in subsequent years relative to the baseline.