THE National Strategy for Economic Transformation, the 10-year vision unveiled this week by Kate Forbes, is a “radical and bold” foundation for growth, innovation, productivity, skills, improved health, employment, cultural and social outcomes, the transition to net zero, and the fight against structural poverty. Or so the Finance Secretary claims, estimating an increase in the size of the Scottish economy of at least 4.9% (or £8billion) by 2032.
Entrepreneur Sir Tom Hunter, on the other hand, described it as “a wish list begging for a magic wand that is out of our reach”, while the Scottish Trades Union Congress (STUC), made argue that it didn’t go far enough on inequality and was merely a ‘lip service’ to the economic well-being of Scots.
Over the past 10 years, on everything from projections for the Scottish and UK economy to energy prices, Brexit outcomes and the pandemic, we’ve had plenty of evidence of potential modeling shortcomings. The Herald’s Ian McConnell points out how ambitious this plan is – especially when compared, for example, to the recent UK-New Zealand trade deal, which (with great uncertainty) predicts possible growth of GDP between 0.02 and 0.03%. or only around £800m.
Thus, those who reject it on the grounds that it is not ambitious enough may have wildly unrealistic expectations. And that’s before you take into account the UK government’s predictions in 2018 that Brexit could cause GDP to fall by around 5% – or even worse, with the immigration restrictions, which have unfortunately been imposed – d here the beginning of the next decade. .
However, there is also no reason to be negative about the goal of meaningful improvement, or to reject the idea that government action – while not creating or directing well directly industries – can nevertheless foster a climate in which enterprise and improved economic opportunity flourish.
GDP is not the only measure of prosperity, and a 5% improvement is hugely ambitious. But it’s not unprecedented, especially in the aftermath of heavy falls (like the one created by the pandemic).
The Scottish Government has substantial hurdles to overcome if it is serious about this program. We have an aging population, low birth rate and low business start-up rate, as well as significant problems in public services, infrastructure, education and job training.
Tackling these issues will be essential to transforming our economy, although that would, of course, be a good thing in itself. It will also require a culture shift that is far more prone to corporate benefits, and the conditions – including lighter regulation and taxation – that encourage it.
The recent historic examples of sustained growth have occurred under the terms of Margaret Thatcher and Tony Blair, comparisons which the Scottish government may not like, while its own interventions in the economy – notably the failure of a promised green boon – have, for the most part, not been stellar successes.
This plan, however, shows signs that it recognizes and takes seriously the approaches that underpin a prosperous economy – which includes tackling inequality, education and health deficits and quality of life, as well as clearer financial incentives for productivity and job creation.
Rather than criticize, the STUC (which has done little itself to facilitate job and wealth creation) should accept – as the government shows signs of doing – that private enterprise, growth and technological innovation are exactly the prerequisites for social improvements, improving life opportunities, skills, mobility, health, education, culture and reducing inequalities.
No government initiative will offer everything everyone would like to see; Holyrood has no power to deliver Utopia. Similarly, it is useless to pour cold water on a set of proposals, even if they initially appear too optimistic. Better, surely, to set the bar high. However, we must recognize the daunting challenges and the magnitude of the changes needed to achieve them. But if the government is ready to introduce the kind of measures that will make Scotland more entrepreneurial and innovative, there is every chance that we can also become proportionately more prosperous, prosperous and equitable.