National Economic Forum 2022: Finance and Economy Secretary speech - 30 March 2022

Closing speech delivered by Finance and Economy Secretary Kate Forbes to the National Economic Forum 2022, Assembly Rooms Edinburgh, Wednesday 30 March 2022

Good morning. It’s wonderful to look out on real people, but also a warm welcome to those that are joining us virtually. And thanks too for those informative and helpful questions which push us to think, to be more ambitious and to be clear in what we are trying to achieve.

I said briefly in my opening answer that it’s a brave person who tries to write a 10-year economic strategy at a time like now. Anybody writing a 10-year strategy three years ago would probably have ripped it up already.

And that’s why the Strategy seeks to be high level and flexible whilst at the same time being clear about what the most effective and achievable programmes are to try and transform our economy.

And I wanted to use my remarks as we close this session to answer three pretty simple questions.

The first is where we’re trying to get to – what kind of country we’re trying to build.

Secondly, who’s going to build it? And thirdly how are we going to build it? And it’s as simple as that.

And I know these are questions that we’ve all been considering and grappling with over the course of COVID. I’ve certainly been involved in numerous conversations, often with some of you in the room, about those three questions.

But I think ultimately those are the three questions that require an answer as we, yes, emerge from COVID. As we continue to grapple with some of the challenges that the First Minister set out. And most importantly, above all else, for those of us with ambition for Scotland. Those of us who are ambitious for Scotland’s economic prosperity to outperform the last decade, for us to tackle some of the structural inequalities that have in some cases been exacerbated by COVID and for all of us who ultimately care about Scotland being internationally competitive.

Not just in core economic terms but also in resolving some of the big challenges that every country around the world is grappling with, whether that is Net Zero or whether it’s some of the structural inequalities.

And so therefore, unpacking those three questions - what is our ambition, who’s going to take us there and how are we going to get there - are the three questions at the heart of the Economic Strategy. Those are the three questions that I think all of us have a stake in answering. The Strategy sets out the kind of country that we want to be and what we want to achieve. We want to be recognised as a nation of entrepreneurs and innovators.

Why? Because at a time of challenge. At a time of crisis, it will be the entrepreneurs and the innovators that see a way through these unprecedented times. We want to be a country that embraces the opportunities of new technologies. Why? Well because if we don’t we lag behind. We don’t just want to pioneer – invent – the new technologies. We also want to see businesses, sectors and industries adopting these.

Just before joining you, I spoke at another conference this morning – the Scottish AI Summit – where apparently I was told we had 200 people in the room and 500 people online, and international speakers who all wanted to talk about what Scotland is doing when it comes to AI. And that’s hugely exciting but the question is how do we embed that approach to digital data and AI so we do, truly, lead the way?

So we want to be a country that is known for its innovation and entrepreneurship. We want to be known as a country that embraces the opportunities of new technology. We want to be a country that boosts productivity. Why? Well again, that’s where we can identify a significant gap between our potential and our current performance as an economy. That is of course a key metric when it comes to not just economic growth but also wellbeing, and that productivity needs to be improved, not just within the highest performing sectors or regions but needs to ensure that we don’t leave any regions behind.

And we want to also focus on the innovations that will make the biggest difference, not just here but internationally. We could have written a Strategy that name-dropped every sector, every opportunity. What we did was focus on the areas with the biggest potential to transform our economy.

You look at countries around the world, small medium and large, governments that have developed economic strategies in collaboration with business and with other parts of the Third and the public sector, and what sets out those countries that have developed and delivered economic prosperity, is that they know what they’re about. They know how to and where to enhance their reputations. They know what to focus on. And in Scotland we have many strengths. It’s about building on those strengths and really harnessing the potential that we have in our country.

And of course, underpinning the Strategy is detailed analysis. The really interesting part is the 133-page analytics paper which is well worth a read. That underpins the approach that we’ve taken, so it’s not just based on rhetoric and ambition.

So that’s our ambition. How do we get there?

I think for me, the title of this conference, the title that I would have liked to have for the Strategy, is that it’s a national endeavour. We all have a stake in that economic prosperity and ambition. Government cannot do it in isolation of business. And business needs a clear approach from Government as to what we’re trying to achieve. We need to work closely with the Third Sector, with trade unions and so on to ensure we develop it.

I go back to my frequent refrain that for a country of 5 million people, a relatively small country, we need everybody to be empowered to participate, and everybody to share in the successes that we have. It is truly a national endeavour that has taken us through the enormous challenges of COVID and almost out the other side. It will be a national endeavour that takes us through the next decisive decade of technological changes of demographic challenges and of the transition to Net Zero.

It’s not going to be easy and anybody that pretends otherwise is deceiving themselves. It is a challenging time to be setting out a course for the next 10 years but we do need to lift our sights and lift our eyes beyond the horizon. We are operating in a world which doesn’t stand still. In countries around the world there are conferences like this happening, with bright minds putting their heads together to consider how to ensure that that country, that economy, has the competitive advantage going into the next decisive decade.

In Scotland we have an opportunity to not just compete with ourselves – it’s not a question of Inverness versus Glasgow, or Glasgow versus Edinburgh, or Scotland versus England or indeed any other form of competition. It is about Scotland as a nation competing on a global stage and ensuring our sectors and industries are not just outperforming the last decade, but outperforming similar sectors and industries across the world.

So when it comes to the who, as a government we commit to providing clear and decisive leadership. But we cannot, and we wouldn’t pretend to, be able to deliver those objectives in the strategy alone. We need to ensure that your voices are heard at the heart of government and that is then followed by action. We need to ensure we redesign services from the perspective of their users and whilst big talk about delivery might not capture the headlines, it is the delivery that is absolutely critical.

Somebody said to me – and I think they’re actually in the room, when consulting on the Economic Strategy that an excellent strategy that you don’t deliver is of less significance to me than an ok strategy that you do deliver. Our focus is to ensure we have an excellent strategy that we DO deliver. And hopefully we will see some of the benefits coming through.

That takes me to the third area, which is the how. Having set out ambition, being clear about roles and responsibilities, the next step is actually to unpack the actions. While 77 actions sounds a lot, ultimately this is about 6 programmes that we need to deliver. And underpinning that are clear steps we need to take to get there.

The breakout groups will focus on these in more detail.

The first breakout group is built around our Entrepreneurial People and Culture programme. We know from our analysis that Scotland lags behind comparable economies on start-ups, business survival rate, and high growth businesses. And that is what spurs us on to establish Scotland as a world-class entrepreneurial nation.

To create one of Europe’s finest infrastructures for the creation and scaling of high growth start-ups. And we will adapt apprenticeship schemes, embed entrepreneurship into the post-16 school curriculum and appoint a Chief Entrepreneurship Officer.

And as I said already we will embed entrepreneurship in the Young Person’s Guarantee - cultivating the business leaders of tomorrow by introducing them at an early age to first-rate start-up techniques and experiences and presenting business start-up as an aspirational, realistic and deeply fulfilling career choice.

I’ve been quite persuaded on this in meetings with the Swedish ambassador and representatives of Sweden’s business community who told me that, going into high schools in Sweden, young people, teenagers, don’t just aspire to be the latest celebrity or the latest actor. They aspire to start up, fail, start up again, scale a business and grow a business.

The focus of the second programme is on New Market Opportunities. Evidence suggests that Scotland has not always maximised the economic opportunities available, including attracting the necessary private investment.

That is why we will focus on strengthening Scotland’s position and events like Dubai EXPO that Ivan McKee was at just last week – because he gets all the best gigs - and COP26 have given us a platform to showcase to the world Scottish expertise in areas like space, health and wellbeing, and Net Zero Transition.

We have refocused our network of overseas energy trade specialists to renewable energy, and we are adjusting our export promotion efforts to increase the proportion of low carbon exports from Scotland.

To capitalise on our reputation as a pioneer in the race to Net Zero, and to reap the benefits of that transition, the First Minister will also chair an investor panel

We also want to work with business to boost research and development into new opportunities, to develop supply chains where there are so many opportunities, particularly, for SMEs and also to see Scotland become a test bed for new technologies.

We know from our data that if Scotland’s productivity matched the productivity of the OECD top quartile, annual wages would be 10% higher. This is why the third programme of action is focused on boosting productivity and innovation.

Nurturing competitive, ambitious and productive businesses is at the heart of everything that we want to achieve with this Strategy. These are the firms that are already and will continue to create jobs, help communities to thrive, and contribute to the development of a vibrant and inclusive Scottish economy. 

We have many excellent examples of innovative and dynamic businesses but we want to shift the dial further. And there are clearly some important changes that need to be made, and those will be informed by our Productivity Ambassadors and the adoption of new technologies using our new Digital Productivity Fund.

Right here in Edinburgh we have some of the most advanced and sought after digital innovation in the world, building on the city’s existing global reputation for excellence in life sciences and the arts.  And in rural areas like my own constituency of Skye, Lochaber and Badenoch there are huge opportunities in space tech. We know there is great potential in our natural assets too when it comes to both our land and sea. 

People need to be at the heart of those opportunities.

We want to also encourage people in our city centres to return. Our city centres are not just empty spaces and buildings, as we have seen so strikingly during the pandemic. We want to continue to work with business that have been impacted over the pandemic, to see customers return to their stores and offices.

Now if the first three programmes that I’ve outlined are going to succeed we know we need to work with business to deliver on the fourth programme – of developing a skilled workforce. We heard earlier about the collaborative working in action with the Michelin Scotland Innovation Parc Skills Academy in Dundee, which was the second announcement I made after being in Aberdeen to announce the BioHub.

The second one was announcing funding for the Skills Academy in Dundee. There existing skills and knowledge from the city’s college and universities are working together with industry, to deliver new skills, for new technologies. I had the privilege of meeting some of the young people that are learning these skills, not just the skills businesses need right now, but in the years to come.

It’s only through achieving our aims across all of these other four other programmes, that we will achieve our fifth programme of a fairer and more equal society. Last week we published ‘Best Start, Bright Futures’, a renewed plan to tackle child poverty - which is a national mission for Scotland, and it is integrated in our Economic Strategy.

Work offers a sustainable route out of poverty for many families and it has a strong and critically important role to play in a balanced approach to tackling poverty so helping families to increase incomes from employment and earnings is essential.

It is also important at a time when we all are well versed in challenges facing businesses and the public sector when it comes to labour shortages. It is important that we lead the way so as part of our commitment to deliver on this fifth programme of action, we will require payment of the real Living Wage and channels for effective workers’ voices, for all Scottish Government grants from this summer.

Deep seated inequalities demand that we raise standards, to tackle in-work poverty, enable progression and wage growth, and to address structural inequalities.

So as I said at the beginning of my remarks, as I close, I go back to those three questions that I posed. We have sought to answer those three questions in the Strategy. We have done so with consultation, through input, through rigorous data analysis.

Where do we want to be in 10 years? What are the subjects we will be discussing at the National Economic Forum in 10 years? What will we be celebrating because of decisions that we took in the immediate aftermath of the pandemic? Where do we want to get to?

Secondly, who’s going to get us there? And I guess, the short answer is you and me. It’s government working with the businesses and sectors represented here. the Third Sector and trade union voices. We ultimately are going to be the ones that make a difference.

Thirdly in order to do that we need to have clear steps. Clear actions that need to be taken. That’s what we have sought to do in the Strategy by unpacking those six programmes of action. The real test will be in delivering them, in monitoring progress and ensuring we do shift the dial as we have set out. Transforming the economy is going to require dynamic thinking.

We can’t rely on the old norms which have passed away over the course of the pandemic. We will provide clear and decisive leadership, through the Strategy, as a government. But ultimately we need to work together, unashamedly harnessing the expertise, the insight across Scotland to bring forward the bold ideas that will transform the economy.

And so as we move into the break-out sessions now, these groups are an opportunity to consider the key themes through the lens of delivery, drilling down into the how, rather than the why or the what.

We could all write pages, libraries, on the challenges facing business, the Third Sector and beyond. But I’m far more interested in delivering the actions, that doesn’t see challenge as a hurdle but recognises throughout history Scotland has excelled in the face of challenge, because Scotland has excelled when we need to be innovative, entrepreneurial and think differently.

We’re a small country of 5 million people, but we have some of the greatest thinkers, businesses and workers. And we have an opportunity to pioneer the solutions that won’t just serve our people, but hopefully the world.

So on that note, I look forward to seeing some of you in the break-out group that I will be chairing. Thanks.

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