Economic strategy is a start but questions remain - Liz McAreavey

The long-awaited National Strategy for Economic Transformation has finally been published by the Scottish Government, setting out its priorities for the decade ahead.

Liz McAreavey is Chief Executive of Edinburgh Chamber of Commerce

Containing more than 70 actions across five key priority programmes it seeks to deliver a fairer and more sustainable economy for Scotland. Few in business would argue the desire to create a better, stronger, more resilient and fairer future for the people of Scotland. Indeed, many of our businesses are well-down that route already.

And it was encouraging to note that the governance structure planned for delivery of this new strategy will be co-led by business and will have immediate Ministerial access. A clear sign that Government has been listening to the business community, that there needs to be a more effective public private collaborative model. A serious reset of relationships.

So let’s be optimistic - the Strategy is a start. But, as always, the devil will be in the detail and despite the programme of actions many questions are unanswered, many circles still need to be squared.

The Strategy seeks to prioritise entrepreneurial activity, help create new markets and industries, increase productivity and innovation, create an appropriately skilled workforce, and deliver an economy based on wellbeing and fair work, reducing poverty, and improving health.

Without doubt there will be some tensions as we unwrap this. In its focus on new markets and industries, the Strategy stresses the need to win “an ever-greater share of domestic and international opportunities.” Experience and research show us that we are 60 times more likely to trade internationally with destinations that have direct air routes. As a nation with no international land borders, physical connectivity is essential. Relationships need to be built, culture and soft diplomacy play their part and new markets can be opened up. But how does this sit with most net zero strategies telling us to ‘fly less’? We have seen Edinburgh lose a huge number of direct international air routes because of the pandemic. We need these back – both for trade and tourism.

And we know that while Edinburgh International Airport has made enormous strides in making its own operation net zero, clearly the business of planes flying in and out is not. We need an aviation strategy that supports our airport as it invests in rebuilding international links – one that seeks to

create a bridge from where we are now, to where we want to be in terms of climate action. It is simply unrealistic to just switch off international air travel. Technology will deliver the transition, we just haven’t invented it yet. But we will.

We also need to ensure that sectors are not “left behind” as the Strategy seeks to drive towards a high-skilled, high-value future. If we are to build on our strengths then Edinburgh, as an international city, must protect its assets. And that must include our unique festivals, culture and visitor economy which not only supports so many jobs but is a melting pot of creativity supporting wellbeing and contributes huge benefits for our local citizens and economy. Government has a vital role and an inescapable responsibility to support the just transition.

As we seek to rebuild our economy as greener and fairer, we need to acknowledge the challenges businesses face. Rising National Insurance costs, soaring inflation, supply chain issues, staffing difficulties in many sectors despite rising wage levels, Brexit-imposed barriers to international trade and in Edinburgh alone, an additional £0.5 BILLION of business debt taken out during the pandemic.

All of that means our policy-makers must create a positive and supportive economic environment in which the Strategy’s aims can progress. Along with the list of aspirations, we need action and innovative thinking from Government on business taxation, how it incentivises innovation and research, how it helps business, removing unnecessary red tape and expense.

Many large businesses are well on the road to delivering our net zero future. Our SMEs however, are willing but facing many barriers. We need to harness knowledge exchange and ensure all businesses can invest appropriately in technology and in our people if we are to achieve our ambitions of creating a world leading green economy. We can only do this if we work together both collectively as a business community and collaboratively with government. The momentum is definitely growing.

Liz McAreavey is chief executive of Edinburgh Chamber of Commerce​​​​​​​​​​