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Developing a Smart, Successful Developing a Smart, Successful ScotlandScotland
Charlie Woods - Scottish Enterprise
World Bank SeminarRiga - 8 June 2004
Introduction
Scotland – backgroundStrategic Challenges ‘Smart, Successful Scotland’Strategy into action
Scotland
Aberdeen
EdinburghGlasgow
Dundee
Inverness
Area 79,000 sq kmPopulation 5mn
GDP €115bnEmployment 73%
Output
Output
GDP per head 2002 ($ppp)
0
10,000
20,000
30,000
40,000
50,000
60,000
Turk
ey
Mexic
o
Pola
nd
Slo
vak R
epublic
Hungary
Czech R
epublic
Kore
a
Gre
ece
Port
ugal
New
Zeala
nd
Spain
OE
CD
Italy
Germ
any
Fin
land
Scotla
nd
Japan
Fra
nce
Sw
eden
Belg
ium
Unite
d K
ingdom
Austr
alia
Icela
nd
Austr
ia
Neth
erlands
Denm
ark
Canada
Sw
itzerland
Irela
nd
Norw
ay
Unite
d S
tate
s
Luxem
bourg
Agriculture2% Manufacturing
20%
Other production5%
Construction6%
Wholesale & Retail11%
Hotels & Restaurants4%
Transport & Comms7%
Financial & Business Services20%
Public Services20%
Other Services5%
Output
Food, Drink & tobacco17%
Textiles, Footw are & Clothing5%
Chemicals, petroleum products etc
14%
Engineering & Metals24%
Electronics etc23%
Other Maunfacturing17%
Share of GDP
Output
-35 -30 -25 -20 -15 -10 -5 0 5 10 15
Textiles
Other Man.
Health, Social
Transport equip.
Food & Drink
Mechanical Eng.
Paper & printing
Metals
Agriculture
Hotels & Restaurants
Public services
Construction
Education
Business Services
Utilities
Transport
Mining
Other services
Wholesale & Retail
Chemicals
Financial Services
Elec. Eng.
GDP annual average % change: Scotland
1995-2000 2000-2002
Manufactured Exports
0
2000
4000
6000
8000
10000
12000
14000
£mn
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
European Union Rest of World
0
2000
4000
6000
8000
10000
12000
£mn
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Electronics Other
Source: SCDI
Manufactured Exports
Share of Exports Q3 2002
Food, Drink & tobacco11%
Textiles, Footw are & Clothing3%
Chemicals, petroleum products etc
14%
Engineering & Metals18%
Electronics etc46%
Other Maunfacturing8%
Research potential
Number of 'selected staff' in subjects averaging more than 4.5 in 2001 RAE
0 50 100 150 200 250 300 350 400 450
Biological Sciences
Hospital-based clinical
Computer Science
Physics
History
Law
Veterinary Science
Mathematics
English
Clinical Lab Sciences
Electrical and Electronic Eng.
Accountancy
Theology
French
Art, Architecture, Design
Social w ork
Anthropology
Mineral and Mining Eng.
Linguistics
Mid east/African studies
new technologies new international
markets/partners more sophisticated
consumers pace of change global upturn
Opportunities
some world class firms key industries
existing and emerging research base graduate output international reputation international cities rural environment identity/size
Strengths output growth domestic demand productivity business starts growth/global firms business R&D skills demand excluded communities
and individuals
Weaknesses
price competition emerging competitors obsolete skills population change
decline/ageing global uncertainty
Threats
Key strategic issues for Scotland
‘Cumulative Causation’even more potent in the knowledge economy
0
1
2
3
4
5
6
%
-40
-20
0
20
40
60
80
London East England South East Scotland North East Wales
Net movement of graduates as a proportion of graduate output (1997-2000)
0
0.5
1
1.5
2
2.5
3
EastEngland
South EastEngland
England North East Scotland Wales
R&D Spend as % of GDP (1999)
University Business
New Company Incorporations
0
2
4
6
8
10
12
14
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
0
50
100
150
200
250
Scotland (left) Enland & Wales (right)
0
0.5
1
1.5
2
2.5
3
Switz. Sweden USA UK Neth. Finland Denmark Japan Scotland France Germany
Global Companies per million population (Business Week 1000)
-15
-10
-5
0
5
10
15
20
percentdifference
from UK average
Regional productivity gap, 1999
Income
Migration
HQs
R&D
New starts
Productivity
Business R&D
200
250
300
350
400
450
500
550
1994 1995 1996 1997 1998 1999 2000 2001
£mn (
2000
price
s)
2
2.5
3
3.5
4
4.5
Scotland as % of UK
Innovation 0
5
10
15
20
25
London South EastEngland
East England North East Scotland Wales
Proportion of Working Age population by Highest Qualification (2001)
Degree No qualification
Skills
Global ConnectionsGlobal Connections•greater digital connectivity•increased global involvement •a globally attractive location•more people choosing to live and work in Scotland
Growing BusinessGrowing Business• greater entrepreneurial dynamism and creativity•more e-business•increased commercialisation of research and innovation•global success in key sectors
Learning & SkillsLearning & Skills•improve the operation of the labour market•the best start for all young people•narrow the unemployment gap•improve demand for high quality in-work training
Smart, Successful Scotland
Overall ObjectiveStandard of Living (GDP/head)
Growing Business Global Connections Learning and SkillsHigh growth firms (starts) Broadband cost/coverage Employment rateBusinesses trading online Companies Exporting 16-19 not in emp/ed/trn
Business R&D Graduates in workforce Unemployment GapLabour productivity Working age net migration In work training
Long term aspiration - top quartile OECD Top quartile 2nd Quartile 3rd Quartile 4th Quartile
Themes and Priorities
Measurement Framework
Scottish economy performance gap summary(distance from average of OECD* top quartile)
0 10 20 30 40 50 60 70 80 90 100
Employees in training
Working age EET
Unemployment 15-24 yr olds
Employment rate
Net migration
Graduates in labour force
Exports as % GDP
Cost of broadband (UK)
Productivity
Business R&D
On-line trading
High growth starts
GDP/Head= Scotland
= gap
38,000
144,000
115,000
99,000
£7,000
14,000
133,700
£930mn
£4.25/hr
140 Euros
£1,985mn
209,000
27,000
%
* or nearest available comparator
Absolute size of gap
The Scottish Enterprise Network
Purpose: a strong economy - sustainable economic growth
Pursuing national priorities - sensitive to local needs and opportunities Addressing ‘market failure’
Focussed on the customer
Working with partners
A catalyst for more/better/faster investment Finance/knowledge/connections
Projects integrated for maximum impact
Growing Business: Priorities and Projects
Stimulating commercially successful innovation e.g. Intermediary Technology Institutes (Energy, Life Sciences, Techmedia),
Proof of Concept, Enterprise Fellowships, R&D incentive Realising high growth potential in companies
e.g. account/client management, Co-investment fund, investment readiness, high growth start up unit, advanced e-business
Stimulating greater entrepreneurial activity e.g. Business Gateway
Industry focus for integrating action Energy, Biotech, Microelectronics, Tourism, Financial Services, Food &
Drink, Forest products, Creative Industries
Headline progress measures 2004/05 Business starts 9,000 - 10,000 High growth starts 150 - 200 Account managed improvements 340 - 400 Knowledge transfer 100 - 120
2004/05 budget £125 - 135mn
Growing BusinessGrowing Business• greater entrepreneurial dynamism and creativity•more e-business•increased commercialisation of research and innovation•global success in key sectors
Global Connections: Priorities and Projects
Supporting and attracting global businesses e.g. ‘knowledge-in/knowledge-out’, Scottish Development International,
Global Companies Development programme Global business infrastructure
e.g. ‘Broadband for Scotland’, Route Development Fund Major strategic place development
e.g. Investment plan (Clyde Regeneration, ‘St Andrews World Class’ etc) Attracting and retaining talented people
e.g. Talent Scotland, ‘Fresh Talent’
Headline progress measures 2004/05 Business Internationalisation 720 - 850 High value Inward Investment 1,000 -1,300
2004/05 budget £125 - 135mn
Global ConnectionsGlobal Connections•greater digital connectivity•increased global involvement •a globally attractive location•more people choosing to live and work in Scotland
Learning & Skills: Priorities and Projects:
Realising workforce potential Young People - MAs, Skillseekers, Get Ready for Work, career education Adults - MAs, Training for Work, PACE, career education Business - BLAs, IiP, industry skill plans
Reducing information failures in the labour market e.g. All age careers planning and support, Future Skills Scotland
Stimulating an enterprise culture e.g. Enterprise in Education
Headline progress measures 2004/05 Career planning 175,000 - 190,000 Occupational Training 41,000 - 46,000 Positive Outcomes from training 16,000 - 19,000 SME workforce development 2,300 - 2,600
2004/05 budget £185 - 195mn
Learning & SkillsLearning & Skills•improve the operation of the labour market•the best start for all young people•narrow the unemployment gap•improve demand for high quality in-work training
Cross cutting priorities
Sustainable Development increased resource productivity new ‘green’ business opportunities
Social Justice stimulating employment opportunities close to under-performing areas helping people close to the labour market access opportunities
Rural Development ‘mainstream’ programmes tailored to market failures and unrealised
potential in rural areas Transport
economic intelligence for transport investment incentives to ‘prove’ new routes
Equal opportunities addressing unrealised economic potential e.g. business
starts by women
Making the connections
‘BioDundee’
Colleges Biotech Consortium
Life Sciences ITIProof of Concept Fund (36% Biotech)
Global ConnectionsGlobal Connections•greater digital connectivity•increased global involvement •a globally attractive location•more people choosing to live and work in Scotland
Growing BusinessGrowing Business• greater entrepreneurial dynamism and creativity•more e-business•increased commercialisation of research and innovation•global success in key sectors
Learning & SkillsLearning & Skills•improve the operation of the labour market•the best start for all young people•narrow the unemployment gap•improve demand for high quality in-work training