1.1 About this report
The Advisory Group on Economic Recovery was given less than three months to consider and advise on Scotland's path to economic recovery after the COVID-19 pandemic. A key part of the Group's approach was a dynamic programme of engagement around the country, together with a process to gather external evidence, insights and advice, at pace, from a wide cross-section of organisations, businesses and individuals across Scotland.
This evidence-gathering had four main strands:
- A series of specific inputs, survey and research activity commissioned from particular organisations and individuals;
- A written request to a range of key organisations for submissions in response to a set of structured issues for consideration;
- A structured programme of engagement with business organisations and individual business leaders organised on the Group's behalf by Scottish Enterprise; and
- An open call for views on the Scottish Government's website, based on a series of questions and issues.
The specific inputs mentioned in the first point above were summarised in the Group's main report, and were published individually on the Scottish Government's website alongside the report itself.
This report provides a summary of the other strands, which between them generated some 400 wide-ranging written contributions in a period of under a month. Its aim is twofold: to give a picture of the range of views and evidence submitted to the Group to inform its discussions, and equally importantly to create a structured depository of material that may assist future policy development by the Scottish Government and others.
The Group decided to view Scotland's economy through the lens of four "pillars" of capital – business (financial and physical capital), people (human capital), community (social capital) and environment (natural capital). Accordingly we have sought, as far as possible, to structure the summary of contributions under these four pillars: although some aspects of the contributions, and some of the proposals put forward, address more than pillar, or in some cases don't sit particularly neatly within that structure.
The summary tables are ordered alphabetically by organisation; some individual contributions are mentioned in the text. We have not sought to interpret, pass judgement on or offer a response to contributions: merely to lay them out thematically.
The key messages from businesses emerging from the programme organised by Scottish Enterprise are summarised separately in section 6. Some submissions from individual businesses sent directly to the Group towards the end of its work also appear in the main discussion.
Written contributions from individuals are summarised in section 7.
There is a list of submissions at the end of this report (section 8); and we are publishing all those for which we received consent to publish alongside this report, so that they can be consulted individually.
1.2 The 4 Capitals
As discussed above, the Group's report and, especially, the analytical annex were framed around the 4 Capitals:
- Environment – the world's stocks of natural assets, which include geology, soil, air, water and all living things;
- People - the knowledge, skills, and health that people accumulate throughout their lives;
- Community - the networks together with shared norms, values and understandings that facilitate co-operation within or among groups;
- Business – the financial, intellectual and physical assets from applying human productive activities to natural capital, which are used to provide a flow of goods and services.
These are illustrated in the figure below.
Under Business, we have also included those aspects of economic activity that relate directly to government – i.e. tax reform, the relationship between administrations – and the economic impact of higher and further education (although this sector is also covered under skills).
A submission from Anand. P, Blanchflower. D & Bovens. L, et. al.) contained a wealth of useful description and analysis spanning all 4 Capitals. Extracts from this submission have been used within the introductions to each section.
Governments are now considering how to develop policies for economic recovery responding to Covid 19 and it is particularly welcome that some, like the Scottish government, are explicitly considering the issues for it calls the 'wellbeing economy'. There is no general, single definition of the wellbeing economy although the territory has been investigated from a theoretical and practical perspective by Sen (1985), Layard (2006), Anand and Piketty (2011), O'Donnell (2018) and many others. Within economics, these ideas have encouraged both the OECD and the United Nations to develop multi-dimensional indicators of population wellbeing which they continue to monitor. In the case of the United Nations, its Human Development Index has provided a basis for thinking about the wellbeing outcomes beyond income including health, education and latterly gender equity. In turn, the index has motivated the development of the millennium development goals more recently replaced by the sustainable development goals.
Within the OECD, a Better Life compendium and programme of work based on measurement and monitoring was instigated in 2011 and subsequently OECD policy analysis incorporates consideration of human wellbeing into its analysis of policy and the economic environment across its portfolio of work. National leaders in various countries have also drawn on concepts of wellbeing in their policies and this includes an exercise by the Office of National Statistics in the early 2010s which produced a wheel of over 40 indicators. This has had a lasting impact and perhaps more importantly, there are now government officials who are aware of the ways additional ways of assessing economic activity that add to the traditional financial measures.
Extract from Submission from Paul Anand et. al.