1. Background and Policy Aim
In 2021, the SNP Manifesto made a commitment to delivering a new National Strategy for Economic Transformation (NSET) in the first six months of the current parliamentary session.
The Scottish Government established a new Advisory Council for Economic Transformation, including industry representatives, trade unions, academics and economist, to shape the strategy. It also engaged extensively with a wide range of stakeholders across Scotland, including through a semi-formal, 9-week consultation that received over 260 responses.
This engagement has helped to shape and inform NSET's vision and ambition, as well as the transformational Programmes of Action that will be developed and implemented over the next 10 years.
Our vision for 2032 is for Scotland to be a wellbeing economy, thriving across economic, social and environmental dimensions. Scotland's economy will significantly outperform the last decade, both in terms of economic performance and tackling structural economic inequalities.
We recognise our people must be at the heart of an economy that works for all and where everybody, in every community and in every region of the country, shares in our prosperity. Our ambition is for Scotland to become:
- Fairer: Ensuring that work pays for everyone through better wages and fair work, reducing poverty and improving life chances.
- Wealthier: Driving an increase in productivity by building an internationally competitive economy founded on entrepreneurship and innovation.
- Greener: Demonstrating global leadership in delivering a just transition to a net zero, nature-positive economy and rebuilding natural capital.
A successful economy is critical to achieving our ambitions for Scotland. Success means a strong economy where good, secure and well-paid jobs and growing businesses have driven a significant reduction in poverty and, in particular, child poverty.
This strategy supports delivery of the outcomes described in our National Performance Framework; it builds on our Programme for Government and our Covid Recovery Strategy; and it will set the context for future Spending Reviews and capital investment plans in the years ahead.
Tackling the underlying causes of inequality in our society and providing economic opportunity is vital in order to improve life chances.
Despite our wealth, too many households continue to live in poverty as a result of structural inequalities. Significantly reducing poverty will boost our economy but achieving it requires better wages and fair work. Our aim is to ensure that work provides a sustainable standard of living and a genuine route out of poverty. If we address poverty this will in turn boost productivity. For example, if Scotland's productivity matched that of the OECD top quartile, average annual wages would be almost 10% higher.
Transformational Programmes of Action
The analysis of the evidence has identified the following interconnected policy Programmes of Action to shift the economic dial and deliver our vision. They tackle the long term structural challenges, build on our economic strengths and position Scotland to maximise the greatest economic opportunities of the next ten years in a way that will transform the very fundamentals of how our economy works.
- Entrepreneurial People and Culture: Establish Scotland as a world-class entrepreneurial nation founded on a culture that encourages, promotes and celebrates entrepreneurial activity in every sector of our economy;
- New Market Opportunities: Strengthen Scotland's position in new markets and industries generating new, well-paid jobs from the just transition to net zero;
- Productive Businesses and Regions: Make Scotland's businesses, industries, regions and communities and public services more productive and innovative;
- Skilled Workforce: Ensure that people have the skills they need at every stage of life to have rewarding careers and meet the demands of an ever changing economy and society, and that employers invest in the skilled employees they need to grow their businesses; and
- Fairer and More Equal Society: Reorient our economy towards wellbeing and fair work, to deliver higher rates of employment and wage growth, to significantly reduce structural poverty, particularly child poverty, and improve health, cultural and social outcomes for disadvantaged families and communities.
We will deliver these Programmes of Action through a sixth programme on delivery which will introduce a new streamlined delivery model where all participants are clear about their roles and accept accountability for their actions:
- A Culture of Delivery: To ensure we successfully deliver the interconnected programmes of action set out above and transform the way in which the Government and business listen to, support and work with each other.
The NSET will be delivered over the next ten years, with regular monitoring of progress and assessment of impact (see chapter 2 for further information).
We are looking beyond GDP growth and taking a broader view of what it means to be a successful country to pursue a fairer, wealthier and greener economy, with wellbeing at its heart. Scotland is already leading the way on this work and we have made wellbeing an explicit part of our national purpose as a country, underpinning our National Performance Framework.
We recognise the importance of ensuring that our economic transformation helps to tackle inequality, advances equality, and improves the quality of life for people experiencing the most disadvantage in Scotland. Therefore, the development of NSET has been underpinned by extensive analysis of evidence and it will be implemented in a way that responds to the experiences of people right across our society.
Ensuring that Scotland's economic transformation benefits all parts of Scotland and all people in our society will require actions across a range of policy areas, including decisions on spending. The recommendations submitted to the Scottish Government from the Equality Budget Advisory Group (EBAG) in its report 'Equality Budget Advisory Group: Recommendations for Equality and Human Rights Budgeting 2021-2026 ask for increased transparency and participation in the budget process, improved Scottish Government staff capability to collect and use equality and human rights evidence in the development of policies and budget decisions, and creation of further mechanisms to promote the importance of and provide greater accountability for equality and human rights in the development of the budget. We have committed to further embedding equality and human rights within the budgeting process and are exploring practical options to do so. We will provide a response to the EBAG in Spring 2022.
Our delivery plans will be linked to the forthcoming Scottish Government Resource Spending Review (RSR) and the RSR will also include equality impact assessments.
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