Chamber and committees

It is quite a stretch to suggest that I am blaming the private sector; that is a quite remarkable misrepresentation of my remarks.

I am not saying that delivery has not been a focus. In response to Jamie Halcro Johnston’s and the convener’s questions about what is new, I said that our evidence suggests that we understand what the challenges are but that the issue now is that we should focus ruthlessly over a 10-year period on delivering what we know to be the solutions to those challenges. As I said, that is not going to grab any headlines, but we know what we need to do, and we need to persevere in delivering that.

New opportunities have also emerged—not least in Alexander Burnett’s part of the country—so the issue now is to ensure that we deliver on the supply chain that exists but needs to expand to meet Scotland’s opportunities. Clearly, the supply chain is where we need to work with the private sector to maximise opportunities.

The economic inactivity figures are well documented in the analytics paper. The most common reason that is cited for economic inactivity in Scotland is temporary or long-term health problems. We also have big contingents who are in full-time study and who have caring responsibilities. “Economic inactivity” is a catch-all term, so getting underneath that and understanding how we encourage those who can work into work is important. The commitment in the strategy is to remove more of the barriers and to simplify the employability system by implementing the “no one left behind” strategy.

It is important to say that the people who are furthest from the job market will require greater and more intensive investment to bring them closer to it. That is a commitment that we are willing to make, but it requires significant up-front investment and willingness to work intensively with individuals. We have set out that commitment—we need to do it.

The earlier question about the need to access skills demonstrates that we need to support into work as many people as possible, but we also need to understand what is preventing people from working. For some, it is the caring responsibilities that I mentioned in my earlier answer to Maggie Chapman. For others, it is full time study, which is good, and for others it is ill health. Given all that, there is quite a small group of people whom we need to work with to encourage them into work and to provide them with the support that they need.

That is a great question. Running through all our budget discussions on the economy is our asking what we are going to do and saying let us do it really well.

We have set out our belief that entrepreneurial people and culture are among the key building blocks of economic transformation and that we will, therefore, prioritise them when it comes to funding and we will expand them. Alongside expansion of the tech-scaler programme, we will create pre-scaler hubs so that we engage much earlier with potential high-growth businesses. We are committed to that approach. We want to do it in partnership with the private sector, so we will prioritise it as we have already prioritised implementation of the Logan review.

You are right to say that, inevitably, that will mean that there are other things that we cannot do. That takes us back to my point to Colin Smyth: when we stop doing certain things to focus on what we have set out in the strategy, there will be questions. However, we have set out the blueprint in the strategy. That is what we want to deliver and it is what we are focused on delivering. Rather than trying to do everything under the sun, let us focus on where we think we will make the biggest impact and really shift the dial. That is what the strategy captures.

There is specific reference in the strategy—because we are post Covid, I guess—to the need to build in resilience.

On specific action, we are committed to expanding a programme that we already have and in which you are probably well versed: the supply chain development programme, which is about improving the capacity, capability and development of Scottish supply chains. It includes identifying and targeting Scottish companies that have the skills, capacity and capability to allow them to bid for, win and deliver contracts in key industries. That goes beyond ScotWind. The programme is about identifying intentionally such businesses and working with them to improve their resilience. Some of them might already be operating within the key supply chains, but others might not be and should be building their business more.

Identifying those businesses and working with them is a more intensive way of working than just waiting for the supply chain to develop its own resilience. However, after Covid, many supply chains are far more resilient than they were going into Covid because of the necessity for them to have adapted.

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.

We can consider and defend what was said by the Bank of Scotland and in the “Green Jobs Barometer” that is published by PWC.

We are doing quite a lot of work in Government at the moment to measure green jobs. There are narrow ways of measuring green jobs, but a lot of jobs that could be classified as green are being established and created in a number of industries.

For example, I recently met one of the largest real estate businesses in the world, and it can reference a number of jobs that have been created, including as a result of work in Scotland, that directly contribute to making non-domestic properties net zero. At the moment, jobs such as those are probably not classified as green jobs, but they contribute to making the country as a whole net zero. Our approach through the strategy is to ask where the challenges are, meet them head on and ensure that we build a more robust supply chain.

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.

Again, I will take the question in two parts. If we have a streamlined, focused delivery landscape, in a sense, that vehicle will drive itself. We need a very focused approach from our enterprise agencies and so on to what we are trying to achieve: new market opportunities, more entrepreneurial culture and citizens and a focus on productivity. If we look internationally, we see that those are three ingredients for success. That is not aligned with a particular circumstance or with being relevant only in the immediate post-Covid phase. Those things will be relevant going forward, and they have certainly been the foundation stones for Scottish economic success to date. Therefore, there is an element around delivery to consider.

On the other point, we need to be flexible and agile enough to respond. Therefore, when it comes to productivity across our regions, I want to see the Highlands, Ayrshire, Glasgow, Edinburgh and the north-east being as productive as possible, and that will remain a focus, irrespective of the circumstances. Success is never inevitable. In no country and on no planet is success ever inevitable if you do not go out and seek it. The strategy is built on the fact that Scotland has advantages and strengths that are the envy of many other countries. Let us build on them and ensure that we are as successful as possible.