European Structural Funds: A smart, sustainable and inclusive Scotland in Europe

An overview of the 2007-2013 programmes and an introduction to the 2014-2020 programmes with case studies from both the European Social Fund and European Regional Development Fund.

2014-2020 Programme Themes: Smart, Sustainable, Inclusive

What Is Smart Growth?

Smart Growth shares the strategic aims of Scotland's Smart Specialisation Strategy - the Scottish Government's Economic Strategy - to increase labour market participation, business competitiveness and investment in research and development. Efforts are focused on achieving long-term and sustainable growth by increasing investment in Scotland's assets and resources - skills, research capacity, clusters and niche products and services, approaches to finance and investment and partnership structures.

The Smart Specialisation sectors are Creative Industries, Energy, Financial Services, Food and Drink, Life Sciences and Tourism.

Why do the funds target these sectors?

Scotland already possesses the resources required to achieve the country's growth potential. It is home to internationally renowned academic institutions capable of transferring invaluable knowledge to the Smart Specialisation Sectors and SMEs making up 99% of Scotland's business base. This knowledge transfer would equip the SMEs and sectors to build a stronger Scottish business base.



  • Urban Habitat Department was established, merging key departments into one.
  • Coordinates all the public services provided on a typical street in the city, from lighting to parking and road repairs


  • Addresses information gaps which existed between the departments prior to the merger.
  • Foreign investment in Catalonia up 16% from 2012-13, which 4095 new jobs created.

The Smart Specialisation sectors also have the capacity to drive business growth and Scotland's cities are ideally placed to act as testing grounds for new technology and Smart Growth projects.

Challenges to achieving Smart Growth

Scotland has resources and expertise to achieve its growth potential but there are challenges it needs to overcome to do this. These include:

  • A lack of effective links between academic institutions and businesses, preventing the flow of innovative ideas between academia and the commercial sectors to boost economic activity. Much of the issue stems from historically low levels of Scottish investment in research and development and a dominance in investment activity by foreign companies;
  • A lack of financial and business development support so that Scotland's SMEs can grow and excel in domestic and international business arenas;



  • E-symphony smart card: a parment card used to pay for road tolls, bus travel, taxis, metros and shopping.
  • Collects extensive traffic data.


  • Card processes up to 20 million individual transactions a day.
  • Extensive data capture allows routes to be altered so that journeys are more efficient and congestion levels are reduced
  • The resources and assets identified in the Smart Specialisation sectors are unevenly distributed across Scotland, limiting their impact;
  • Growth and development of technology connecting cities and investors.

Meeting the Challenges

Smart Growth is designed to overcome these challenges and produce sustainable economic growth by focusing ambitiously on innovation and development in four key areas - technology, academic centres, SMEs and Smart Specialisation sectors.

Strategic Interventions run by Lead Partners will focus on Financial Instruments, Developing Scotland's Workforce, Business Competitiveness, Innovation, Digital Infrastructure and Smart Cities.

Collectively these Strategic Interventions will ensure that Scottish businesses have the resources, skills and knowledge to grow, innovate and compete effectively across global markets.



  • Traffic lights that use sensors to 'think by themselves'


  • 40% reduction in vehicle waiting times;
  • 26% reduction in travel times;
  • 21% reduction in vehicle emissions;
  • increased business productivity due to more efficient and effective journeys to works



  • Electronic 'two-tag' tram system allowing customers to pay for tickets post messages and complaints online via Near Field Communication-enabled movile phones.


  • Increased citizen participation.

This new Smart Growth approach means that Scotland will be much more ambitious in the use of European Structural Funds. The heightened focus on the Smart Specialisation Strategy will ensure the funds are invested in Strategic Interventions focused on areas which are genuinely new and transformative, and capable of delivering the ambitions to achieve sustainable, long-term growth and increase employment.

Susan Tamburrini
Team Leader, Smart Growth

What Is Sustainable Growth?

Sustainable Growth contributes to the Scottish Government aim of a healthier and greener Scotland by providing funding for projects to increase sustainable economic activity and grow our low-carbon economy.

Scotland faces a number of challenges in achieving sustainable growth. For example, transport emissions have increased since 1990 and the number of people with health issues is growing. More positively, communities are investing in low carbon technologies, and exploring ways to increase energy efficiency. However they do not always have the support to achieve sufficient scale or long-term financial sustainability.

Support provided under Sustainable Growth will focus on four specific areas: increasing the proportion of journeys made by public transport, walking and cycling; promoting research, innovation in and the adoption of low-carbon technologies; moving Scotland towards a resource efficient 'circular' economy; and improving the quality, accessibility and quantity of green infrastructure in towns and cities.


Less you Waste,
Less you Pay


  • Smart bins capable of caluclating the weight of food and waste deposited. A swipe card is used to open the bin lid and a charge is applied to the user of the card depending on the amount of food waste.


  • A significant reduction in the level of food waste.


Reuse & reduce waste!


  • A chemical firm reusing the waste water from nearby communities.


  • A drastic reduction in the resources previously used to purify salt water - 65% less energy and a 500-tonne reduction in the amount of chemicals used.

Actions supported will include the development of 'active hubs' to provide affordable bike hire and parking; 'low carbon transport hubs' providing reliable low-carbon refuelling services and linking small-scale renewable projects; and a 'National Smart Ticketing Scheme' to provide a modern, better integrated public transport network which uses a low-carbon rewards system.

Work will focus on developing low risk, low carbon technology investments to attract and build on private investment in low carbon in Scotland. Partnerships will be developed across delivery bodies so that there is a more strategic approach to investment. The aim is to create a Scottish economy where waste management and environmental harm is eliminated from the way goods and services are produced and consumed.


Turning waste into profit!


  • A sandwich company using previously discarded breadcursts to produce breadcrumbs sold to sausage companies.


  • Reduced waste disposal costs and increased company sales.


Increasing Energy


  • Gas boilers replaced with thermal water boilers.


  • A reduction of 87% in annual gas consumption - equivalent to the average amount of gas used by 30 detached houses.

Ambitious approach

To successfully deliver the aims of Sustainable Growth will require ambition by all partners. Supply chains will need to be rethought and flexible infrastructure will be required to meet changing needs.

The Sustainable Growth aspect of the programme will significantly scale-up pilot and development projects in Scotland and help to develop and raise awareness of green recreation opportunities.

This will include creating all-abilities access to green infrastructure, wildlife corridors to join up important sites and habitats, increasing the area of land available for allotments, community gardens and orchards and work to improve safe access to and transform vacant land into green spaces.

The programme will provide the impetus and focus for investment that enables Scotland to move towards a truly low-carbon, sustainable economy.

Jim Millard
Team Leader, Sustainable Growth


Using Natural Resources


  • Potzdamer Plaz, an office, entertainment and retail centre in Berlin has developed an elaborate system to retain storm water.


  • The storm water runs off the building and is collected in a pond. It is then reused for toilet flushing, irrigation and fire systems in the centre, minimising the burden on Berlin's water infrastructure.

What Is Inclusive Growth?

Inclusive Growth focuses on projects and activity designed to raise levels of employment, investing in skills and training, modernising the labour market and reducing poverty. This focus forms a core part of the EU 2020 Strategy and is also recognised by organisations including the Organisation for Economic Cooperation and Development and the World Bank.

Scotland still has relatively high levels of long-term unemployment and inactivity, particularly in terms of youth and long-term unemployment in South West Scotland. In addition, 16% of the Scottish population and 19% of Scottish children live in relative poverty, with high levels of in-work poverty. The issues and their severity vary across Scotland but sustainable employment, food and fuel poverty, child and social care, and financial inclusion are a constant problem when dealing with poverty alleviation. Around 68% of the European Social Fund allocation will be devoted to this area, targeting the people and places who are in the most need.

How will Inclusive Growth address these issues?

1. Promoting Labour Mobility

Youth Employment Initiative (YEI)

Targeting the very high levels of youth unemployment in South West Scotland, the YEI supports young people into employment, a formal and long-term traineeship or formal and long-term qualifications, depending on individual needs and abilities.


Social Integrative City


  • A neighbourhoods management programme was established in areas of the city with high unemployment and deprivation. The public services in each of the neighbourhoods were strengthened and work was done to create more effective links between them. The knowledge of local residents was used to create new strategies to tackle issues associated with deprivation from within the communities themselves.


  • Better interaction between agencies and services.
  • Services became more responsive and effective in delivering measures to deal with community problems.
  • Local people became more engaged and involved in work to improve the local environment and the communities they lived in.

Employability Support

Targeting those with multiple barriers to increase participation in the labour market. Support will include barrier removal, training, employer engagement and in-work training and support. This will be delivered both locally through employability pipelines and, at a national level, through a third sector employability fund.



The Client's Voice


  • Establishment of a new scheme distributing grants to unemployed people with a contractual agreement on how the money is used to get the individual back into work; The grants are flexible in terms of how they are used and tailored to the specific needs of each individual.


  • Lower unemployment levels throughout the Netherlands
  • High levels of support and buy-in from unemployed people keen to alter their situation.

2. Promoting Social Inclusion and Combating Poverty

Community Based Solutions

Supporting the most disadvantaged and fragile communities to identify and tackle issues affecting poverty at a local level, and with a specific focus on an asset-based planning approach.

Enhanced Pipelines

Support to complement pipelines for intensive barrier removal, targeting particular groups or issues including workless and/or low-income households and lone parents.

Financial Inclusion

Supplementing the financial inclusion offered through employability packages with more targeted assistance to provide intensive support for the most disadvantaged households in target areas.

Supporting Social Economy and Social Innovation

Using social enterprises and the thirds sector as vehicles to provide sustainable solutions, the programme will develop and grow the social economy through increased access to capital. In addition it will improve access to funding for pilot projects using new approaches to tackle poverty and stimulate and support new ideas.

Lorna Gregson-MacLeod
Team Leader, Inclusive Growth

For further information about European Structural Funds in Scotland please contact

Scottish Government
European Structural Funds
3rd Floor
Atlantic Quay
150 Broomielaw
G2 8LU

For the latest news and information follow us @scotgovESF


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