Why is this Purpose target important?
Increasing sustainable economic growth is important if we are to:
- Generate greater and more widely shared employment.
- Create more highly skilled and better paid jobs.
- Provide better quality goods and services and more opportunities for people.
- Support better and higher quality public services.
- Foster a self-sustaining and ambitious climate for entrepreneurs.
- Encourage economic activity and investment across Scotland.
- Bring a culture of confidence and personal empowerment to Scotland.
- Secure a high quality environment and a sustainable legacy.
What will influence this Purpose target?
In the long term, there are three means by which the sustainable rate of economic growth in Scotland can be accelerated and per capita income raised:
- Increasing the level of labour productivity and competitiveness.
- Increasing the participation rate and so the number of people actually working.
- Increasing Scotland's population and the supply of potential workers.
These can be mutually reinforcing. By making Scotland a more prosperous place to live and work, for example, we are more likely to attract highly skilled people to contribute to, and share in, that prosperity. Higher wages make work a more attractive proposition increasing participation in the workforce. Higher economic growth can increase the attractiveness of Scotland in a world where mobile businesses look to invest in successful places with a critical mass of knowledge, skills and connectivity.
Several of the levers to influence these targets lie at a UK rather than a Scottish level. However, where there is scope for the Scottish Government to intervene, action will be taken, so long as it can be justified on the basis of analysis and evidence, taking full account of identified market failures and legitimate equity concerns.
What is the Government's role?
If we are to deliver increasing economic growth, that is sustainable and equitable, we must focus on improving our productivity and competitiveness, our labour market participation and our population growth. To do this, we will take action in five Strategic Priorities that are internationally recognised to be critical to economic growth:
- Learning, skills and well-being.
- A supportive business environment.
- Development of infrastructure and place.
- Effective government.
- Equity across Scotland's people, communities and generations.
How are we performing?
For UK Target:
Annual Gross Domestic Product ( GDP) growth rates for Scotland and the UK are calculated on a rolling four quarters on four quarters basis. As data sources and the methods used in the measurement of GDP improve, and therefore allow the statistical error of previous estimates to be reduced, the statistics will at times need to be revised.
Over the year to 2011Q1 Scottish GDP grew by 1.4%, whilst UK GDP increased by 1.9%. This resulted in a gap of 0.5 percentage points between annual Scottish and UK GDP growth rates. The latest data shows that over the year to 2011Q2 GDP in Scotland increased by 1.1% whilst GDP in the UK increased by 1.5% - resulting in a gap of 0.4 percentage points between Scottish and UK annual GDP growth rates. Therefore, between 2011Q1 and 2011Q2 the gap between annual GDP growth rates in Scotland and the UK shifted by 0.1 percentage points in favour of Scotland.
Source: Scottish Government, ONS
View data on GDP
For Small EU Countries Target:
The small independent EU countries are defined as: Austria, Denmark, Finland, Ireland, Luxembourg, Portugal and Sweden. Annual Gross Domestic Product ( GDP) growth rates for Scotland and the Small EU Countries are calculated on a rolling four quarters on four quarters basis.
Over the year to 2011Q2 GDP in Scotland rose by 1.1%, whilst GDP in the Small EU increased by 3.1% over the same period - resulting in a gap of 2.0 percentage points in favour of the Small EU. This compares to an annual increase in GDP to 2011Q1 of 1.4% in Scotland, and an annual rise of 3.2% in the Small EU - resulting in a 1.8 percentage point gap in favour of the Small EU. Therefore between 2011Q1 and 2011Q2 the gap in annual GDP growth - when presented to one decimal place - increased by 0.3 percentage points in favour of the Small EU.
Source: Scottish Government, OECD
View data on GDP
This evaluation is based on: any difference in the gap in annual growth rates within +/- 0.1 percentage points of the last quarter's figure suggests that the position is more likely to be maintaining than showing any change. A movement of 0.1 percentage points or more in Scotland's favour suggests that the position is improving, whereas a movement of 0.1 percentage points or more in the UK or Small EU's favour suggests that the position is worsening.
For information on general methodological approach, please click here.
Scotland Performs Technical Note
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