Scotland’s economy rebounds

Last week’s GDP figures brought some much-needed cheer for the Scottish economy. In the space of a few short days, we have gone from fears about a recession to the highest rate of economic growth in over two years. While that is clearly welcome, there is no doubt that Scotland’s economy remains vulnerable to shifting sands, with pockets of strength in sectors like manufacturing offset by weakness elsewhere in areas like construction. There is a clear need to focus on economic fundamentals, and a “back to basics” approach has to start with concerted efforts to boost productivity across all Scottish regions. Findings from our recent report Pursuing Prosperity reveal a potential £25 billion prize for unlocking regional productivity growth across the country – roughly equating to a 15 per cent boost to the entire Scottish economy. We know that productivity growth is vital for achieving long-term, sustainable economic growth. It is also the only sustainable route to higher wages, and therefore better living standards. That’s why it is so important to the people and economy of Scotland. This year, productivity levels in Scotland have finally caught up with UK levels, but it still lags behind our international competitors. We also know that there are vast regional disparities in productivity across Scotland, with the highestperforming local authority found to be more than 50 per cent more productive than the lowest. Finding ways to help Scotland’s lowest-performing regions unlock their potential is critical to helping us compete on the world stage. That’s why we’ve called for the establishment of a business-led productivity taskforce to focus on powering productivity across Scotland, driving opportunity and prosperity. If we’re serious about boosting regional productivity growth we need to focus on four key drivers: education and skills; transport and connectivity; management practices and innovation and exporting. These are the areas where business and government can work together to deliver a meaningful stepchange. Encouraging GDP figures and evidence of stabilisation in the oil and gas industry suggest that this might be a crucial turning point for the Scottish economy. Against a backdrop of Brexit we should seize this opportunity to push for a positive pro-business agenda that can get the economy firing once more. Pursuing Prosperity provides a roadmap for boosting regional productivity growth but this needs to go hand-in-hand with efforts to present an image of Scotland that is both outward-looking and forwardthinking. In an increasingly competitive market, we need to remind investors and businesses alike that Scotland is a great place to do business. After a difficult 2016, it’s time for Scotland to get back to business. ● Hugh Aitken is CBI director for Scotland