7. THE RATIONALE FOR ENGAGING THE DIASPORA
7.1 Scotland and Ireland will require different diaspora strategies simply because the conditions which motivate them to engage their respective diaspora populations are different. Scotland's turn to its diaspora stems from debates in the early 2000s about impending skill shortages. The growth of skill shortages through time in any economy can be said to derive from one of three sources: a growth of that economy relative to the working age population; a decline of the working age population relative to the economy; or a growing mismatch in the skills inherent in the labour market relative to the skills required by the economy. A relatively poorly performing economy at the periphery of Europe, Scotland's skill shortages could not in truth be attributed to the success of its economy. Instead, attention was given first, and foremost to the impact of the absolute decline of the country's working age population; and secondly the nation's limited ability to serve as an incubator for members of what, following Richard Florida 19 was referred to as the 'creative class'.
7.2 In the early 2000s it was believed that the Scottish population was in decline and that Scotland occupied premier position in the European league table of shrinking populations. There was a fear that Scotland's population could dip below 5 million. The contribution of Scotland's demographic trends to emerging skill shortages derived from the problem of falling birth rates and an ageing population structure. Scotland feared that it could not meet replacement demand that would occur in the labour market (existing jobs that will need to be filled due to retirements) 20. Secondly, Scotland began to take an interest in Richard Florida's ideas regarding the importance of the creative class to economic growth and saw a need to prospect for a larger share of creative members of society. Independently of the absolute shortage of skills that would derive from unmet replacement demand, the shortage of pools of creative talent in the economy was in itself a problem.
7.3 Increasingly the attractiveness of Scotland to immigrants and fortifying positive net migration was the diagnosis and The Fresh Talent Scotland Initiative and the Relocation Advisory Service were the principal products. Scotland was to proactively attract students, business people, other workers, entrepreneurs, and Scottish expatriates. Fostering return migration then, to deal with the country's low birth rates, projected demographic shrinking, skill shortages, and absence of creative talent, emerged de facto as its primary relation to its diaspora. Expatriates already had a sense of connection to Scotland and could be more easily lured back by the magnets of good educational and career opportunities, a cosmopolitan and tolerant multi-cultural ethos, a vibrant night time economy and series of consumption opportunities, and by the desire to bring up families and care for parents in their old age.
7.4 It has now become apparent that Scotland's population is stable if not growing slightly, that fertility levels have risen, and that no significant skill shortages exist, albeit that the country suffers from relatively low levels of self-employment and entrepreneurial activity and could benefit from labour market expansion in these areas 21. Against this backdrop, a new set of rationales for engaging with the diaspora has developed, rationales which have been prompted in part by the publication of the Scottish Government's new Economic Strategy in 2007 and its International Framework22. Three aspects of this strategy have important consequences for the framing of diaspora strategy 23:
7.5 Demographic - There remains a belief that population growth will be an important stimulus to the economic development of Scotland and as such that the promotion of population growth remains a key policy concern. Scotland has set itself the target of matching the average European EU ( EU15) population growth over the period from 2007 to 2017. Beyond natural increase, it is estimated that to meet this target Scotland will require an annual net migration balance of +22,000. Encouraging return migration represents one way to work towards this target.
7.6 Economic - In the period 1975 to 2005 the average annual GDP growth rate in Scotland was 1.8%, lower than the UK average of 2.3%, and significantly lower than the Irish rate of 5.2% 24. As a consequence the Scottish Government has set itself the targets of raising Scotland's GDP growth rate to the UK level by 2011, and matching the GDP growth rate of the small independent EU countries by 2017. In so far as diasporic populations can help Scottish businesses compete in the world market and help broker transnational capital investment into Scotland, the diaspora can help the Scottish economy to become 'smarter' and 'wealthier'.
7.7 Cultural - The Scottish National Party is currently in power in Scotland and the nation is in the throes of debate over the extent to which full independence or continued Union with the rest of the United Kingdom will best serve its interests into the future. It is presumed that a strong cultural identity and sense of national confidence will be important if Scotland is to match both the demographic and economic growth rates achieved by small independent European States. To conceive of Scotland as a globally networked population of 40 million people is arguably a more powerful way to think. It is clear that a strong cultural attachment to Scotland is a prerequisite for all other efforts to engage diasporic groups and as noted throughout this report there is a debate to be had as to whether such an attachment can be secured best as an independent nation or as a member of the United Kingdom.
7.8 Ireland is a country that has undergone enormous transformations since the start of the 1990s. Up to that point, Ireland was a poor nation on the periphery of Europe characterised by a weak economy and high emigration. During the 1980s, Ireland was in severe recession. Inflation and unemployment rates were high (unemployment was over 18% in 1985) and in 1987, Irish GDP was 63% of the EU average making it the second poorest country in the EU behind Portugal 25. Unsurprisingly, the dire economic situation led to widespread emigration. Between 1981 and 1985, net out-migration was on average 15,000 people each year, rising to 35,000 per year between 1986 and 1989. Crucially this emigration included large numbers of young, well-educated people seeking a better life overseas, with 70% of all emigrants under the age of twenty-five 26.
7.9 In contrast, from 1994 until the last couple of years Ireland has been the fastest growing and highest performing economy in Europe with year-on-year GDP growth often double or more its European neighbours, and wealth levels in terms of average income amongst the highest of any developed nation. In 2003, the OECD estimated that in terms of GDP per capita, based on Purchasing Power Parities ( PPS), Ireland was ranked 4 th in the world 27. Accompanying the economic boom was a growth in the labour force and a fall in unemployment. Between 1992 and 2004 the number of workers increased by 755,000 from 1.165m to 1.920m. Unemployment dropped from 15% in 1993 to stabilise around 4% by 2000. While many would argue that Ireland's economy is relatively robust, the situation is undoubtedly in a period of change with Ireland's economy now in recession and unemployment growing rapidly to its highest level since 1997.
7.10 These dramatic changes to the economy led to equally dramatic adjustments to the demography of the country. Between 1996 and 2006 the population of the state grew by 16.8% to 4.23m. Births exceeded deaths by almost 140,000 between 1996 and 2002 leading to a strong natural increase in population 28. Emigration fell steadily during the 1990s, accompanied by a rapid growth of immigrants so that the country became a net-importer of people after 1996. Up to 2004 and the arrival of large numbers of migrants from accession-state countries, approximately half of all in-migrants were Irish-born returnees. According to the 2006 census there were 419,733 people living in Ireland who were born outside the state, including a large number of East Europeans (163,227), Asian (46,952) and Africans (35,326). The Central Statistics Office reported that immigrants represented 9.93% of total population (4,239,848) in 2006. This was almost certainly a large undercount given the number of active PPS numbers and in-migration has continued in the intervening time especially from the EU accession countries (particularly Poland and Lithuania). Given the present economic downturn there is anecdotal evidence that some of these immigrants are now leaving the country, but as yet the scale of that out-migration is unknown.
7.11 In 2002, as a reflection of the country's new found wealth, Ireland's Task Force on Policies towards Emigration, drawing on a full scale mapping of the Irish diaspora 29, recommended extending certain welfare rights to overseas populations, especially vulnerable groups (the elderly, the sick, the poor and prisoners) who left Ireland in the 1950s and the 1980s to move to British cities. Cast as recompense for the failure of Irish domestic economic policy in the 1950s and the 1980s and in gratitude for the significant flows of remittance monies which these migrant groups repatriated, a raft of welfare and citizen advice schemes were introduced, including the appointment of overseas welfare officers in British cities. In the past five years, Ireland's policy towards its diaspora has been motivated by a concern about what the country might give the diaspora back. Nevertheless there have recently emerged two additional rationales for reinvigorating connections with the diaspora.
7.12 Cultural - There is growing concern that the strength of diasporic attachment and affiliation to Ireland might be waning and that a certain level of disenchantment exists. As noted above, this can be read as one of the consequences of the peace process in Northern Ireland, the fact that the rise of the Celtic Tiger has undermined the logic of supporting the country and wider secular trends within society in regions of settlement. As a consequence priority is now being given, not least in the country's Cultural Policy to the nurturing of the social and cultural life of the diaspora and its continued enthusiasm for matters Irish.
7.13 Economic - Ireland's success has been down to its capacity to compete successfully in the global economy. The first and most widely recognised tactic has been built around attracting foreign investment and to a limited degree embedding it into the local economy - the global goes local. The second, and more surprising tactic given Irish economic history, is the emergence of a local network of indigenous firms that have become increasingly integrated into international business and technology flows and have been highly successful in international markets - the local goes global. There is growing recognition that diasporic networks have a role to play in increasing the density of the webs of connection which exist between domestic capital and transnational capital. As a consequence, Enterprise Ireland in particular is increasingly seeking ways of establishing diaspora business networks or diaspora knowledge networks in different locations, of different sizes, and in different sectors of the economy.
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