Scotland’s inclusive economic performance

The Scottish Government’s National Performance Framework (NPF) was refreshed in June 2018, with the aim to provide ‘a focus and direction for policy action across the public sector as a whole’. The NPF sets out a vision for Scotland (of inclusive and sustainable economic growth) and an associated measurement framework. The NPF is structured around 11 outcomes and a set of 81 indicators that measure outcome progress, with an overall Purpose and set of Values. This paper outlines Scotland’s performance for a number of NPF and other measures that are key drivers of productivity and inclusive economic growth. Scotland’s performance is compared where possible to other economies, and the size of any performance gap, for example to the top quartile of economies, is estimated.

Publicly available data from official data sources such as the ONS, the Scottish Government, Eurostat and the OECD has been collated and analysed.

Scotland has many economic strengths and assets that provide a basis for future inclusive economic growth and creating more quality job, such as a highly educated population, world class research and knowledge and a buoyant risk capital market. And Scotland is a highly attractive location for investment. However, productivity performance continues to be mid-table, meaning that Scotland is less competitive than many other economies. Although Scotland has a number of highly productive and competitive businesses and sectors, there is evidence of overall weak business dynamism and growth culture, reflected in relatively low levels of innovation, exporting and capital investment. Compared to many other countries, Scotland does not have enough businesses, and not enough of them growing, impacting on productivity performance. Improving productivity will help raise wages and reduce income inequality, particularly in low productivity sectors such as tourism, food manufacturing and construction, and lead to better quality jobs and wages for workers in Scotland. Scotland needs to stimulate more entrepreneurship, business dynamism and growth ambition, and to ensure talent and assets are fully utilised across all regions.

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