SCOTLAND must step up efforts to boost lagging productivity rates to help accelerate the recovery of the country’s economy from the slump triggered by the Covid-19 coronavirus crisis, business leaders have said.
Tracy Black, Confederation of British Industry Scotland director, said: “By addressing long-term productivity challenges, we can start to build a sustainable recovery from Covid-19 and also look ahead to the kind of economy we want for Scotland. It should be led by high tech, sustainable growth, and green infrastructure with a highly skilled, well-paid and flexible workforce that’s ready to compete with the best.”
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Ms Black was speaking at the launch of the latest annual productivity index report, produced by CBI Scotland and accountancy giant KPMG. This found Scotland trailed other parts of the UK or international competitors on 10 of 15 key indicators, compared with nine of 15 in the 2019 report.
The authors said the priorities for the Scottish Government should include prioritising the mental health backlog in the health system and developing joined up green transport and infrastructure plans with the UK Government.
Businesses must identify opportunities for investment and innovation to improve their performance. They need to engage with and support government schemes to help young people develop careers while ensuring all employees develop the skills needed for success in the digital age.
Catherine Burnet, KPMG UK’s senior partner in Scotland, said: “While the country grapples with the Covid-19 pandemic, underlying challenges and complexities can often be pushed down the agenda.”
However, Ms Burnet said businesses in Scotland had risen well to the challenges posed by Covid-19 and shown their flexibility and ability innovate in the process.
The Fraser of Allander Institute at the University of Strathclyde provided insights that informed the productivity index report.
Mairi Spowage, deputy director of the institute, said the indicators monitored in the report could be used to monitor progress regarding productivity and to identify areas requiring action.
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Noting the Scottish economy was locked in a persistent battle with fragile growth before the coronavirus crisis, she added: “ The best way to address that issue, and ultimately unlock Scotland’s economic potential, is to utilise the broad range of fiscal and policy levers available to promote widespread productivity gains.”
The productivity index indicators include business research and development spend as a percentage of gross domestic product.
The latest percentage reading in Scotland on that measure, 0.83 compared with 1.13 for the UK.
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