Prosper Forum: First Minister's speech - 29 May 2025

Good morning. It’s a pleasure to be with you today to discuss how collectively we can deliver higher standards of living in Scotland, deliver better public services, fulfil our ambitions to journey to net zero and create economic opportunity for all here Scotland. And the theme of this conference, transforming Scotland for a prosperous future is a particularly important one given the challenges that our nation faces today and has faced over the last two decades.

Over the last two decades, we have essentially, as a country, wrestled with the implications of one challenging set of circumstances after another: the financial crash of 2008 and 2009, austerity, Brexit, the COVID pandemic, the war in Ukraine, the cost of living crisis and climate change. Any one of these would have had a shocking impact on our economic and social systems, but we have, essentially, as a society, faced a whole range of those factors and those challenges.

Tackling those global challenges is vital as part of the conversation that we have within this Forum and that we have within Scotland, particularly at this critical time. And everybody here has a perspective on those challenges and their implications, but also the knowledge and the skills and the imagination to contribute to the search for the solutions that we have to find as a country and as a society.

Gatherings like this are vital to build powerful connections within our society and there is, in my view, in Scotland no organisation better placed to draw together that conversation about these challenges than Prosper or, I suspect showing my age, the Scottish Council for Development and Industry (SCDI). I'll probably never be able to refer to it in any other way.

Going back to what Joanna said in her introduction, Prosper, SCDI, was formed in a moment of economic peril in the 1930s. What it has successfully done over its 90-year history, at different moments and different challenges within the economic and social development of Scotland, is bring people together to find common cause and common solutions.

Not to be part of what is often the frustration of debate about policy choices, a compartmentalised debate where the discussion is taking place in the public sector or in the private sector or in the third sector. Quite uniquely in Scotland, Prosper brings together voices, perspectives from the private, public and third sectors in a way that creates a forum in which many of these challenges can be reflected upon. 

I regularly sit speak to private sector audiences or public sector audiences or third sector audiences. I hear compartmentalised perspectives from each of those areas, and indeed within government I hear plenty of compartmentalised discussions about individual questions and challenges, in which the participants haven’t given a moment's thought to the implication of what they're putting to me for another sector of the economy or society.

But what Prosper does is it creates the type of forum that any country needs, which is to recognise that no challenge will ever be addressed in one equal compartment. If you look at all those challenges that I set out there - the financial crash, austerity, Brexit, COVID pandemic, the war in Ukraine, the cost of living crisis, climate change - none of these can possibly be sorted out or addressed in one equal compartment. They have to have collective and collaborative thinking to help us navigate our way through those challenges.

And that is the approach for 90 years that Prosper has taken and I'm profoundly grateful to the founders of the SCDI 90 years ago, and to the leaders of Prosper today, for maintaining that important opportunity for us to come together and to find common cause and to agree on collaborative discussions. Because at this year’s annual forum, there are significant issues that we have to wrestle with,  what I have described in e other comments as the emergence from an economic winter that we have experienced as a society.

Global norms are shifting in front of us. Sometimes they shift in a matter of hours in entirely different directions, as we've seen overnight with the court ruling in the United States, which changes dramatically the tariffs discussion and debate and of course, we have another chapter of that coming along very, very soon. I assure there will be another one after that, as it takes its course.

Goods and services are impacted, and we can see from the issues that have emerged from the tariffs intervention that the President of United States put forward in early April the immediate impact on key sectors of our economy as a consequence of those decisions.

Climate change is forcing us to change behaviours and actions and interventions. Conflict and forced migration are rising in our society, and we find our connected world at greater risk of pandemics and vital resource shortages and implications of resource challenges. We saw very directly and very immediately from the war in Ukraine when it started in 2022 the immediate effect of that on energy prices within our society.

That is a very challenging landscape that we cannot ignore, and it's for that reason that I brought forward the Programme for Government for the last year of this parliamentary term to give us the maximum opportunity to reflect on those challenges and to address those challenges, to identify the support we can bring to enable resilience and strength in the Scottish economy and Scottish society, but also to maximise our opportunity to make an impact on the public of Scotland and to resolve those issues to the greatest extent we possibly can. T

The international context changes the landscape of what we have got to deliver and what we've got to put in place. And government is alive to that, and are responding to that, and I know that all of the organisations that are here are able to respond to that as well.

But despite all of those challenges, despite all of those issues that are creating the headwinds that make it ever more challenging to operate within this context, I firmly believe that nothing which is wrong with Scotland today cannot be fixed by what is right with Scotland today.

And from my experience, which if I could be so bold as to suggest is pretty significant in public life in Scotland, there are few quick and easy ways, despite what some of my political counterparts might say. But where I’m confident is that if we deploy the ingenuity and the cooperative spirit which is embodied by the discussion that has always taken place at this forum, and which I know will take place at this forum, we have the ability to prosper. I want to be clear about the willingness of my government to engage with everybody represented here, the broad cross-section of opinion that is represented here, to make sure that we seize the opportunities that are here for Scotland, that we address the challenges that are there and that we map out a strong and robust future.

Now I have set out a Government Programme which is built around four key and principal themes, which are applying discipline in the way the government’s agenda is being delivered. Those four themes are the eradication of child poverty, the pursuit of increased economic growth, the successful journey to net zero, and improving of public services, particularly in the performance of our National Health Service. And those themes are designed to give absolute clarity to stakeholders within the Scottish economy about where the government's interest lies, where our priorities lie, what we are doing to take the necessary steps to achieve those objectives.

But crucially, those four themes are set out not in a compartmentalised fashion, but to represent the interdependence of each of these themes. If we do not eradicate child poverty in our society, we will not have a sufficiently large and broad working age population available to fuel the economic growth that we need to fuel in our country, to enable us to invest in our public services and to live in the civilised society we have the privilege to live in today.

And if we don't have that working age population, and if we don't have the investment vehicles correct, we will not be able to make the transition to net zero, which is a moral obligation to our society to ensure that we are addressing the challenges that the planet faces as a consequence of the decisions and  the way in which we managed resources over the last couple of centuries.

So that programme is a very focused programme, but it's an indivisible program. It is a programme that links together some of the big questions of our society, which we have to address collectively and collaboratively to ensure that we have the ability to achieve success for the people of Scotland. Now Prosper’s approach in all of this has a great deal to contribute to that that agenda because Prosper’s approach to economic development is founded upon the ability, as you say, to turn ideas into reality.

And that's what I'm very much focused on: taking the aspirations of the type of country we want to live in and turning those into practical propositions that we can deliver. Prosper indicates that you want to create a purpose-led, sustainable economy that benefits all people and the planet. If I may say so, that perhaps sums up more crisply the agenda of my Government than my civil servants have managed.

But it does make a point powerfully that we want to have a purpose-led sustainable economy that benefits both people and the planet. That's what I'm trying to achieve.

I want to reflect a little. Joanna mentioned the forthcoming blueprint from Prosper and I want to reflect on some of the themes within that blueprint for the remainder of my contribution with you today. I'll give you some of my reflections on the headlines that have been shared with me.

So the blueprint is anchored around a step change in investment, a boost in economic productivity, creation of world-class low carbon industries, future-proofed education, skills and employment, accelerated tech innovation, inclusive, local and regional growth, and investment in infrastructure and public services.

Let me say that I feel that we are on a very similar page in the agenda that we're interested in taking forward. On a step change in investment, one of the points that I have sought to address since I became First Minister just over a year ago was the conclusions of the investment panel that were reported to my predecessors. The investment panel was led by Angus McPherson of Noble Grossart and it put together some really powerful challenges to about the need to ensure that we have a more cohesive approach to attracting investment in Scotland.

And I have to say, I read that report with growing concern about its contents, but so much so that I have then addressed issues within that report, so that we are in a position as a government to have a very clear proposition about the attraction of investment and how that investment can fuel economic growth in Scotland.

Our investment pipeline is led by Deputy First Minister Kate Forbes, who is putting an incredible zeal into making sure that our high-performing economic development agencies Scottish Enterprise, Highlands and Islands Enterprise and South of Scotland Enterprise are focused on that investment challenge, but they're also aided in their efforts by the work of the Scottish National Investment Bank, one of the sponsors of this conference today.

What we're increasingly now seeing is the emergence of investments in Scotland that have been made possible because of the ways out enterprise agencies are working with the Scottish National Investment Bank, are successfully de-risking investment opportunities and enabling those investments to take place. My point, in short, is that by bringing together the patient capital of the Scottish National Investment Bank with private investment, but in an environment in which de-risking has taken place to make that private investment more likely, Scotland is benefited from an increased level of investment.

We see that in some of the offshore renewables investment by Haventus at Ardersier and at Nigg with Sumitomo – and recently I joined the Secretary of State for Scotland at Glasgow Airport in announcing investment funding that joined together the Scottish National Investment Bank, the UK Government's National Wealth Fund, investment from Scottish Enterprise and regional selective assistance to anchor in Scotland the company ZeroAvia, who are developing hydrogen cell technology, hydrogen fuel cell technology, which will enable low carbon aircraft flying in the future.

That's going to bring 350 jobs to the advance manufacturing sector at Inchinnan. That is only possible, I think, because we have successfully de-risked that investment by that private company. That's the model our investment panel asked us to try to pursue, and that's the model we are now pursuing.

So the step change in investment is necessary to make sure that we realise the economic opportunities that are required, and that will help us in the efforts that you challenge us on to boost economic productivity because those jobs that will come, for example from ZeroAvia, will be very sophisticated engineering and chemical engineering jobs that can come to Scotland.

They come at time when we need to find opportunities to replace some of the issues that will arise out of the end to refining at Grangemouth and the other issues that we face in journeying to net zero - all part of the work that we're taking forward on the creation of world-class low carbon industries. So my point in citing those examples is to illustrate that interconnection I’ve made about areas of government policy.

It is possible to pursue economic growth and deliver net zero at the same time. Scotland has essentially reduced our emissions by 50% since 1990, but our economy has grown 66% over that period. The data speaks for itself. It is perfectly possible to deliver economic growth and net zero if we get the choices correct in what we do, and that's what the work at Nigg, at Grangemouth on Project Willow, is all about - to identify and use technological opportunities that exists. The thinking that goes into that is critical.

Your blueprint calls for us to future-proof, education, skills and employment, and I come back here to the necessity of ensuring that we are always alert and alive to the changing requirements of our economy for the development of skills.

It's crucial that our colleges, our universities, our school communities are actively engaged with the business community and identify where all those opportunities come from and how they are addressed. We must have a constant challenge about the way in which we are delivering skills. The government is legislating to provide a sharpness to this proposition as we speak in Parliament, to enable us to have that connection between the needs of the economy and skills development in our society.

You call also in your blueprint for accelerated tech innovation, and one of the areas of policy were I think we are making quite a bit of headway is around the support to the innovation ecosystem within Scotland. I go back about a decade to the creation of Scottish Edge.

Scottish Edge was designed to put fuel into the start-up community in Scotland, and has succeeded in doing so. We have a much more dynamic start-up community in Scotland, but the government also saw a weakness in how we developed and supported those companies emerging.

Too many of those companies were not making the progress that was thought possible. Too many of them were essentially exiting Scotland to fuel their growth, so we had to enable the conditions of  growth to be met and that is where the Techscaler initiative comes in.

That is now flourishing in Scotland, supporting companies in their scale-up challenges and also providing a platform of opportunity for companies in Scotland to be able to rub shoulders with some of the ecosystems in the west coast of the United States and also in Singapore to essentially experience what it is like to be in a tech-fuelled environment, and for us to realise its benefits here in Scotland. But again, we are constantly working to establish how we want to accelerate that agenda.

On the call for inclusive local and regional growth, part of the challenge of modern government policy is to make sure that we are reaching every part of the country with our message and our support for innovation in the economy. Some of the decisions we are able to take, for example, in relation to development of offshore renewables have resulted in significant investment in projects around Scapa Flow, for example, in Orkney.

We are supporting the transition to renewable energy as a consequence of the investment the government is making. And the combination of city deals and growth deals around the country are designed to create a forum to bring together public and private sector players to create common local economic development agendas. The regional economic partnerships that we have around the country are designed to fuel that agenda.

And last thing, you call for us to support investment in infrastructure and public services. One of my priorities is to make sure the government is able to deliver the capital investment improvements that are necessary around the country.

Whether that is in the provision, for example, of the infrastructure that supports the development to low carbon transport use by investment in electric vehicle charging points around the country, where we've achieved our targets two years earlier than were anticipated, and we have a more robust network of charging infrastructure around the country although that will have to continue to grow as a more EV use takes its course.

Or whether that's about some of the achievement of infrastructure projects. We've just been very close to completing the electrification of the rail line between Glasgow and East Kilbride to enable a further stage in the decarbonisation of transport networks to be undertaken.

All of these projects will take their course, and we have to secure that constancy on infrastructure projects, although one point that I would make is that the delivery of infrastructure projects is becoming increasingly challenging as a consequence of the permanent level of construction inflation has afflicted us since the war in Ukraine started. That has put enormous pressures on the affordability of public sector projects as a consequence of the rise in construction prices and costs.

In relation to public services, my focus, unreservedly, is on making sure that our public services meet the needs of the public. Work to getting waiting times down in the health service occupies a huge proportion of my time. To enable that to be achieved, we have to improve performance of our education system, and we're seeing levels of literacy and numeracy growing to higher levels in our schools and attainment gap on measures of literacy and numeracy closing. All of that was part of investing in the future of our country by having valuable and essential public services.

So I hope those reflections on the themes of your Blueprint 2025 give you some assurance that the government is on the same wavelength as Prosper, that we are working to address the legitimate and critical priorities of the public, and that we can address the aspirations and the hopes of everybody who are here today.

And there's one other aspect I want to add into discussions, which I think is a central issue for us all to wrestle with, because it requires clear and empathic leadership, and this question, this issue, will have a clear and emphatic leadership for me as First Minister. That's on the question around the size of our working-age population because I view this as a critical threat that is facing our country. Our working-age population is shrinking and we need that population to grow.

There are two things we have to do in that respect. One is that we've got to make sure that we are engaging as many of our people as we can our society. So the government's employability schemes are built to succeed in making sure that people who are currently economically inactivity are able to join the labour force and make a contribution to the economy.

We have got to make sure our schools, our colleges, our universities, are operating in a fashion so that our population is able to leave schools, colleges and universities, and make their economic contribution. We've got to make sure that is successful.

But even if we succeed to the greatest extent possible, we must be supported by the second element, which is migration and I am profoundly concerned by the direction of travel that has been taken over migration, the debate about immigration in the United Kingdom is going entirely in the wrong direction, in my opinion.  We have to recognise, and I made this point to the Prime Minister when I met him on Friday, that the changing dynamics of our labour market and the need for us to encourage migration, to support the fulfilment of our working age population, has to be recognised in the approach that is taken to migration in the United Kingdom.

Now last week, in the light of the publication of the UK Government's paper on immigration, I convened a discussion in St Andrew's House of representatives of the food and drink sector, social care, the National Health Service, education, construction and engineering, to hear from them first-hand what was their perspective on migration and what were the implications if some of the proposals to be enacted.

The social care sector told me that 26% of their workforce is of international origin. If those individuals are not able to make a contribution to our social care system, then I'm afraid I don’t know how we will deliver a social care system in Scotland. These are the blunt practical realities of what we face.

And that's where I can see a significant economic threat to our prosperity if we do not have a more mature approach to immigration than is currently the debate in the United Kingdom. This is a deadly serious issue for all of us because the organisations - public, private sector, third sector - that you all lead and represent will be unable to fulfil your requirements.

And in that respect, I will give very clear leadership on this question because I see a strategic economic threat to Scotland where we have in place a whole range of economic interventions that I think will best meet the need of people in Scotland.

And I'd like you to engage constructively with us on how we advance these issues. There are solutions that can be developed. There's plenty of countries around the world that have found ways of navigating their way through the very stormy waters that innovation creates for all of us.

But if we don’t do that we will not be able to realise the economic opportunities that I think exist for Scotland, and those economic opportunities are very significant. We are blessed as a country with enormous energy resources that we are now able to capture as part of the renewable revolution. We have an approach to cooperation with the European Union, which is better than what we had a couple of weeks ago, which opens up the opportunity for energy exchange with the European Union.

We have a population which is ingenious, creative and talented, and we need to make sure we have investment in skills and technology that enable that to thrive. And if we do all of that and allow that investment in the infrastructure of our country, I think we can design a future that enables us to achieve those objectives of eradicating child poverty, of boosting economic growth, of making the journey to net zero and of making sure we have public services that meet the needs of the public. That is my focus and I look forward to discussing it with Prosper today and in the years to come.