National Economic Forum 2022: First Minister's speech - 30 March 2022

Speech delivered by First Minister Nicola Sturgeon to the National Economic Forum 2022, Assembly Rooms Edinburgh, Wednesday 30 March 2022.

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Thank you. Thank you very much to Ivan McKee and to all of you for being here with us this morning. It is fantastic to look out and see a real live audience. Believe it or not it is 27 months – 27 long hard months – since we last had the national economic forum with a real, live audience.

So it is really good to be here and delighted to welcome so many of you in person. That said we also have a number of people joining us online today, so a warm welcome to those who are joining us virtually as well.

I think today’s session is very timely. As Ivan has just covered, at the beginning of this month, the Scottish Government published our new strategy for national economic transformation. And I’m going to say a word or two about that strategy shortly.

But firstly I think it is important to put it into some domestic, but also global context. It’s not an exaggeration to say that we are living through a genuinely critical, in our lifetimes I think, unprecedented period in history.

We are of course still emerging from a global pandemic, and that as all of us know, has required governments everywhere to do things that previously would have been completely unthinkable. And of course the experience of the pandemic over these past two years I think has led all of us to reflect on how we live our lives and what we truly value in our lives.

The pandemic of course is still with us. I think in recent weeks there are probably very few of us who have not been touched by this virus either directly ourselves or through somebody in our family contracting it which is a reminder of its continued presence and how infectious it is. Even although I’m pleased to say vaccines are providing most of us with very significant and very welcome protection against serious illness.

But it is still there. We’re still contending with it to some extent. Indeed, the reason or one of the reasons, I’m not able to stay with you after my remarks today is that I need to get back to the office to finalise decisions ahead of the latest Parliamentary update on Covid this afternoon.

But of course now, in addition to the pandemic, we see unfortunately and deeply regrettably, war in Europe, of a kind and nature that all of us I think hoped had been consigned to history.

Over and above that, we continue as a world to face a climate emergency.

And we are here in the UK still dealing with the significant difficulties – including very real recruitment difficulties - caused by Brexit.

And many of these different issues, any one of these issues would be challenging. The combination of these issues is adding up to a challenge, that as I said a moment ago, I think our lifetimes is unpresented. And all of these issues and challenges are combining to create a real cost of living crisis for households across the country. And I’m acutely aware, all of us are acutely aware, that the cost of doing business is rising too – Covid, energy costs and much more alongside that are all combining to cause significant stresses for businesses and sectors across the economy, in every part of the country.

I’m sure you’re all sitting there thinking that politicians talk about the challenges we face. But I do genuinely think that certainly in the entire course of my lifetime, there has never been a period when governments, businesses and individuals have faced such important and difficult challenges.

The other side of that though is just as important to reference. And that is throughout the past couple of years and now every single day, we see reminders – literally on a daily basis - of how much we can achieve in the face of these really big challenges. We’ve seen people’s capacity for compassion, ingenuity, resilience and adaptability.

We’ve seen that very powerfully right throughout the pandemic. It has highlighted, perhaps more than anything else in our lifetimes, that capacity for innovation and that adaptability of businesses, third sector organisations and others.

So within a period of days at the outset of the pandemic, many of you will have adapted to remote working. At the start of the pandemic, we had a situation where the majority of our PPE stocks were imported. Now today, thanks actually to the efforts of Ivan here, the majority of PPE used in Scotland is produced and manufactured here in Scotland. So we’ve completely recast vital important supply chains.

Employers the length and breadth of the country, and this has been evident in many of the conversations I’ve had over these past two years, have shown a real sense of social purpose. Concern for the safety of workers and customers – and wider wellbeing – has shone through the decisions that individual businesses have had to take.

So when we take all of this together – the scale of the challenges we face, and also that reminder of the great capacity for human resilience and ingenuity – I think we bring ourselves to a point of realisation that this is a crucial moment in history. One in which all governments need to ask big tough questions about our ambitions for the future. And all of us need to consider whether the solutions we are seeking to put in place are commensurate to the scale of the challenges we face. And do they match the desire that people across the country, and the globe, have for change.

Because if they don’t, we will be missing the opportunity and letting down people and businesses who have sacrificed so much over the past couple of years.

So no single government strategy can live up to all of that. But it is important for key strategies of any government to set the right direction, to set the right tone and put in place the right interventions.

The National Strategy for Economic Transformation seeks to do that. The title – that reference to “transformation” – isn’t an exaggeration. Because we recognise, at this pivotal moment in time, that just having small-scale improvements on their own, will not meet the needs of the moment.

So the strategy outlines 77 different actions for transforming the economy, within six key programmes - entrepreneurial people and culture; new market opportunities; productive businesses and regions; skilled workforce; a fairer and more equal society; and a culture of delivery.

These actions and programmes have not been developed by government on our own. They are the result of extensive consultation – indeed partnership - with businesses, trade unions, the third sector and the wider public sector. Business leaders, for example, make up a significant proportion of the advisory committee.

You will be, I am sure, relieved to hear that I’m not going to talk you through all 77 of the actions in the strategy this morning.

But I do want to highlight two key elements of the strategy – firstly its ambition, but secondly, and perhaps more importantly because ambition doesn’t get translated into reality without this, its focus on delivery. Which as Ivan said a moment ago absolutely key.

But firstly, the ambition. The strategy sets out our vision for a fairer and greener country, as well as a wealthier one. And recognises that all of these things are inter-linked. It acknowledges that achieving all of that, given the challenges we face, does involve a fundamental reshaping of the economy.

The pandemic, after all, has both exacerbated and exposed some deep inequalities in our society.

We know these are harmful for the wellbeing of individuals, but also harmful to the economy as a whole. So actions to tackle poverty – such as the delivery plan to tackle Child Poverty that was published last week – are actually a core part of our strategy to build a better, more resilient economy.

But the pandemic has also highlighted some key areas of opportunity for the future - in terms of how we work, and also in terms of accessing new markets.

I’ve already referenced the transformation of our supply chains in PPE, as just one relatively small but important example of that.

Another relates to a visit I made just at the start of this week to the Valneva vaccine manufacturing facility in Livingston.

Scottish Enterprise has just recently confirmed an investment in that site which will safeguard more than 250 jobs. But also crucially support expansion of the site that is currently there.  It will enable it to manufacture its Covid vaccine, which is different to the vaccines currently in use and will help to give us resilience in terms of vaccines in future. But it will also support that site in developing vaccines for Lyme disease and the Chikungunya virus.   

These are the first vaccines in the world for these diseases. Therefore, a really good example of the international reach of our life sciences sector here in Scotland. A sector that is so important to our economy now but also to our ambitions for the future.

The economic strategy also recognises the urgency of the climate crisis.

It sees that the move to net zero is a moral imperative for us here in Scotland and countries across the globe. But it also recognises the massive economic opportunity that we have in making that transition.

That opportunity was highlighted powerfully in Glasgow at the end of last year, when COP26 convened there. We were able to use that as a real showcase of everything Scotland is doing already to pioneer net zero technologies.

So it’s really important for us now take advantage of the international platform that COP26 gave us. I’ll be personally chairing a panel to attract more investment into Scotland for projects that will directly support that transition to net zero.

Perhaps the most striking recent example of the opportunities that this transition offers us, is the ScotWind auction process led by Crown Estates Scotland.

In total, companies have offered to generate up to 25 GW of power, at 17 offshore wind sites.

To put that in some context: our planning assumption for offshore wind is 10 GW. So we have companies that collectively are massively exceeding that planning assumption. It gives us challenges in terms of the consenting process but the opportunities that come from that massively outweigh those challenges.

And that is important obviously for increasing the security of our energy supply as we make the transition to net zero, and amongst the other things that the war in Ukraine has reminded us of, is the importance of having a strong and resilient energy supply.

But in addition to that, this really has underlined the scale of the economic opportunity that our renewable energy resources offer for us.

That’s not just offshore wind energy. It includes hydrogen energy as well. The ScotWind bids will help us further in our ambitions to develop hydrogen.

And all of this will give us the opportunity to secure and to grow a supply chain in energy. In fact, the estimates are that for every gigawatt of energy produced for ScotWind, there will be £1 billion of investment in supply chain opportunities.

That’s really important because one of the things that I readily acknowledge, and I think it’s important that we do acknowledge this, is that we haven’t been as good as we should have been in the past at harnessing the economic benefits of our energy resources.

For example, in the development of onshore wind. So we must get better at that. And the whole ScotWind process can represent a real turning point for us on that.

Maggie McGinlay, from the Energy Transition Zone in Aberdeen is leading a workshop later this morning on this. Indeed when I visited the Zone last month, it was to give confirmation that the anchor tenant there would be the national innovation centre for floating wind.

All of this underlines this really vital, mass scale opportunity we have. From what is a moral imperative for us here as it is for countries across the world.

And it’s possibly worth just reflecting at this particular moment in our energy transition on the early history of oil and gas in Scotland.

Because there was a point in the early 1970s – which I should stress I don’t remember directly but I have read lots about it – a point back then when everybody understood the potential of the oil and gas industry but it was still at a stage when the jobs and infrastructure weren’t fully in place. I think with offshore wind that’s the stage we’re at right now. We don’t yet have the infrastructure and all of the jobs in place, but we absolutely see the potential and we know what we have got to do to make sure that it becomes the massive employer and generator of economic activity that oil and gas is and has been over the past four decades and more.

That’s important in all parts of the country but of course it is particularly important in the north east, where right now so many jobs and so much economic activity is supported by oil and gas.

I’ve spent a bit of time this morning on the net zero transition, because it is one of the most important examples of what we need to do as we make the transformation, that the economic strategy sets out. But it’s important to emphasise also that the strategy talks about the need to continue to support other key sectors of our economy– for example financial services, food and drink, and tourism. All very important sectors of our economy now, with potential for significant growth and development in the future,

So helping these sectors to grow, to themselves make the transition to net zero, and to find new markets is a key part of everything that the strategy encapsulates.

All of this work of course will be supported by other strands of the economic strategy. At a time of rising costs, the hard focus in the strategy on productivity is more important now than it has ever been.

And of course as we seek new market opportunities, it is a real imperative to ensure that people have the skills they need – not just for the jobs of today, but for the jobs of the future. So initiatives of the kind set out last week – to support the skills academy at the Michelin Innovation Park in Dundee – are really important. That academy will provide training and opportunities for the mechanics and the engineers who will help us to deliver the transition to net zero.

We will also – and this is something that businesses emphasised as the strategy was being developed, do more to create a culture of entrepreneurship. It’s something that Scotland has been renowned for down the generations that we need to renew now for the future.

That starts in our schools, and carries through to the investment and support that we make available to companies as they start up and then hopefully scale up.

The Logan Review highlighted the importance of this in the tech sector - one reason why we have established a Tech Ecosystem Fund.

But actually, as all of you know all too well, entrepreneurship matters in all sectors, and in all types and sizes of organisation. It is as important in the public and the third sectors as it is in the private sector. By encouraging, supporting and celebrating entrepreneurship, we will help deliver greater prosperity in individual communities across the country.

These fundamental ambitions – to create a wealthier country, but one that is also fairer and greener, and lives up to the obligations we have for the future of our planet– I know will be shared by everyone in the room.

But one of the things that we know, and we are repeatedly told rightly by businesses, is that having the ambition is not good enough on its own. That’s why the strategy has such a key focus on delivery.

I know and I experience this in audiences and in discussions I have in all sectors and in all parts of the country, there is a degree of scepticism, and that’s putting it mildly, and let me say healthy scepticism, of government strategy documents. Because there are plenty of them, there are shelves in St Andrew’s House heaving under the weight of them.

Government strategy documents in and of themselves don’t achieve anything. It’s what we do to deliver the ambitions in them that matters. That is why the focus in this strategy on delivery is so important.

We have, in the Scottish Government, established a team dedicated to driving delivery of it, and crucially to monitoring progress. Detailed delivery plans will be finalised by the end of August.

I will chair a Ministerial Economic Delivery Group - recognising that the economy is actually everybody’s business, from health to education to housing and we need to make sure that at the heart of government there is that joined up focus on all of this.

We are establishing a Delivery Board for the strategy, Kate Forbes will co-chair it with a senior figure from business. There will be representatives from trade unions on that delivery board as well.

One of the innovations that I’m particularly enthused by actually is this next one I’m going to mention. We’ve heard a lot from, and I seem to have spent more time over the past two years with Chief Medical Officers than I have with members of my own family for reasons that will be obvious to everybody. But we intend to appoint a Chief Entrepreneurship Officer in the Scottish Government, somebody who will have a business background and who can bring to the heart of government that focus on enterprise and entrepreneurial spirit that is so important to the delivery of all aspects of this strategy.

So all of that focus on delivery is crucial and I hope it gives a degree of confidence that this is not just another government strategy it is about genuinely transforming how we do things in order that we cannot just meet the obligations that lie ahead of us in these really difficult times. But meet those obligations in a way that harnesses all of the economic benefit that we know is there to be grasped.

So thank you for your contribution to it. I know many of you in this room will have made a direct contribution. And thank you to those of you who I know will make a contribution in the future.

These discussions at national economic forums are a key part in ensuring that we have the right perspective and are taking forward the right actions.

I’m grateful for the opportunity to be with you briefly today to share some of these thoughts. To go through key elements of the strategy and to thank you for everything that you have been doing over these past two years through this incredibly challenging period for all of us.

I’m going to finish where I started. The combination of events we are living through right now is genuinely in our lifetimes unprecedented. It is challenging, we are facing an inflationary cost of living and set of pressures in the months to come that will be unlike anything families, individuals and businesses have faced in recent times.

There are no shortage of things to feel challenged, and at times I’m sure for many people working in businesses across the country, overwhelmed by. But we also know that working together, harnessing all of the experienced skills and talents we have in this country, as we have demonstrated over the pandemic, we can achieve great things.

That’s what we’ve got to focus on as we transform the economy and therefore the living standards and the opportunities for people across our country.

Thank you very much for listening and I hope you enjoy the rest of the morning.

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