Hosts: Ivan McKee, Minister for Business, Trade, Tourism and Enterprise and Lorna Slater, Minister for Green Skills, Circular Economy and Biodiversity
Facilitators: Maggie McGinlay, Chief Executive, Energy Transition Zone Ltd
Scribe: Sarah Crompton-Donnelly
Discussion group overview
Rapid global decarbonisation will represent a profound change, far outwith the control of any government or sector. The transition to net zero is not just an environmental imperative but an economic opportunity - one where Scotland can lead and secure first-mover advantage.
Scotland is not alone in trying to crack this market, and so success will depend on intelligent choices of where Scotland has a genuine chance to compete now; where we start to build future strengths and the conditions for those to emerge and grow; and where we choose instead to work with global businesses and organisations to promote Scotland as a ‘demonstration economy’, creating green jobs through the roll-out and application of new net zero friendly technologies from wherever they emerge.
As the global economy accelerates towards a net zero future and artificial intelligence, genomics and other scientific advances change the way we live, new markets will be created and new industries will emerge.
The Lloyds Banking Group and Oxford Economics Green Growth Index ranks Scotland as the number one region in the UK for green growth potential and opportunity. This reflects Scotland’s existing green industrial base, which supports a growing number of green jobs and innovation activity, the take-up of relevant skills and training, and the development and use of renewable energy infrastructure.
Realising the much bigger potential that lies ahead requires a coherent and highly focused set of policies and interventions which accelerates the areas where Scotland has strategic and competitive advantage; seeks to influence global markets, regulatory environments and businesses to deliver our own broad domestic transition to Net Zero; and enables the development of new strengths by being agile and alive to further new industries that could emerge over the next decade.
Over the past decade, numerous pieces of analysis have demonstrated where Scotland’s genuine global strengths are - around energy, including renewables, high value manufacturing, photonics, life sciences, space, financial services, and food and drink innovation – as well as where we have substantial near future potential – including offshore wind, hydrogen and low carbon mobility - and natural capital, including the blue economy. In the coming decade, Scotland must harness these, finding the right blend of inward investment, supply chain stimulation, public funding and private financing.
One key opportunity is the ScotWind leasing round, announced in January 2022 by Crown Estate Scotland. Scottish Offshore Wind Energy Council is leading on the development of a Collaborative Framework to encourage the sector to come together and work collectively to support the delivery of the volume of offshore wind projects from ScotWind, with a focus on growing capability and expertise, particularly around the growth of floating offshore wind.
We expect the successful ScotWind projects to be actively engaging in the process from the outset, and commit to taking collective action not only to grow Scotland’s supply chain but also to help deliver the wider economic transformation potential from ScotWind, such as significant infrastructure investment and upgrade to ports and harbours, which in turn will attract inward investors.
Outside future opportunities, we will also help existing strengths to adapt. For example, financial services have both the potential to unlock substantial investment into the transition and to generate a new kind of job and supply chain in data analysis and the verification of nature and climate restoration. We will also support existing strengths to combine, for example Life sciences and Biotech, bringing together digital, space and sensors to support new food systems.
And finally, our transition to becoming a net zero economy needs to be fair and managed. The development of our Just Transition plans is already underway and will help to identify green industrial opportunities in all sectors and regions, and set priorities, whilst also making a meaningful contribution to tackling child poverty.
Scotland has the potential to build leading industries in areas where our human and natural capital and technology and research capabilities provide the basis of global competitive advantage. Government cannot do this alone, but it can and will enable it, through regulation, market stimulation, risk sharing and provoking and promoting future strengths.
NSET sets out 12 actions across three projects.
Project 5: build on Scotland’s strengths to win an ever greater share of domestic and international market opportunities
Key actions include:
- deliver on our export plan, which takes a targeted sector and country approach to raising Scotland international exports, including actions to scale up trade promotion and Scotland’s overseas reach and profile, and to ramp-up our support for firms’ export capacity
- promote Scotland as an innovative test bed for new technologies and markets and coordinate action across the public sector to leverage our spending power and the CivTech business incubation model
- provide public sector R&D grant support and finance to businesses to further increase Business Enterprise R&D spend in sectors with the greatest economic opportunity
- provide capital investment to support regional renewable hydrogen production hubs to make Scotland a leading nation in the production of reliable, competitive and sustainable hydrogen
- deliver on the ambitions of ScotWind and future renewable energy developments, including on developers’ commitments to invest at least £1bn in the Scottish supply chain for each GW of capacity
Project 6: support the development of Scottish supply chains, laying the foundations of a net zero industrial strategy
Key actions include:
- expand our Supply Chain Development Programme to improve the capacity, capability and development of Scottish supply chains, including identifying Scottish companies with the skills, capacity and capability to bid for, win and deliver contracts in key industries.
- adopt a cluster building approach to strengthen our position in new markets.
- review our strategic approach to public ownership so that public companies are managed, developed and initiated for the public good, and work collaboratively to provide support and advice to establish successful public companies.
Project 7: attract and deploy significant domestic and international private investment in Scotland
Key actions include:
- establish an investor panel, chaired by the First Minister, to attract investment to a pipeline of projects in Scotland that support our transition to net zero
- improve access to private capital for business investment and growth
- expand and enhance our Green Investment Prospectus and Green Markets Solutions Programme
- establish a values-led, high integrity market for responsible private investment in natural capital
Suggested discussion questions
- Scotland will not be able to lead in everything in this transition so where will we focus? Where are Scotland’s genuine global strengths?
- Government will not do this alone. What roles can government and industry take up together?
- how should we deploy public sector funds to best lever in private capital investment? What market making solutions should government consider?
- how can we harness Scotland’s just transition to net zero to create new good jobs across Scotland? What role does industry play in this?
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