Scotland is home to a unique combination of assets with which to build a prosperous and wealthy nation.
Medium-sized European nations such as Norway, Denmark, and Sweden are among the most prosperous countries in the world, well ahead of the UK.
Scotland shares many similar economic features with these countries, highlighting the immense growth potential of Scotland.
There are 5 vital contributors to growth and development in a country. These include natural resources, a skilled population, access to trading markets, well-functioning products and sectors to trade with, and a supportive financial services system. Scotland possesses all of these in abundance, suggesting the country’s capability to boost its economic growth.
With independence, Scotland would have the ability to become a more prosperous nation, holding the power to create bespoke and sustainable economic growth strategies.
1) Prosperity Requires: Natural Resources
Scotland is a Resource-Rich Country. It has enviable levels of tidal, wind and wave energy, and has become a world leader in the development and deployment of renewable technologies. For example, Scotland holds the world’s leading wave and tidal test centre, the European Marine Energy Centre, in Orkney. Scotland also has several competitive advantages in offshore wind, such as:
- Established expertise and experience in offshore oil and gas
- A skilled offshore workforce
- Excellent port infrastructure
- A strong innovation hub
Scotland’s advantage is evident, holding 25% of Europe’s offshore wind and tidal resource. Due to such developments in offshore wind, the amount of renewable energy generated in Scotland increased by 6% between 2017 and 2018. This output of electricity is the equivalent of powering all homes in Scotland for more than 2.5 years. This increase was largely driven by offshore wind projects, off the country’s east coast, coming on line last year and the continued build-out of low-cost onshore projects.
Evidence of Scotland’s advancements within the renewable sector can be seen across the country with figures showing that between January and June 2019 wind turbines provided enough electricity to power the equivalent of 4.47 million homes for those 6 months. This electricity could power all the homes in Scotland and most of those in the North of England. This is a 113% increase since 2016, when wind turbines were able to supply the electrical needs of 87% of all Scottish households, equivalent to 2.1 million homes. Scotland’s technological capacity, as well as geographic location, makes the country an ideal centre for renewable energy.
Despite the headlines stating that renewable energy in the UK is flourishing, there has been a huge decrease in support from the UK Government and great confusion surrounding future investments. This has led to a “dramatic and worrying collapse” in green investment. In 2018, annual investment in clean energy was at its lowest point in a decade. This downward trend can be linked to decisions made by the government in 2015, particularly its withdrawal of support for onshore wind. With a group of MPs referring to onshore wind as “inefficient and intermittent”, the Conservative party made a manifesto pledge to remove subsidies from new onshore wind projects. This decision was made by Westminster without consulting either the industry or the Scottish Government first. This demonstrates Westminster’s power to ‘pull the plug’ on Scotland whenever they wish, despite the detriment to Scotland’s economy and future as a greener nation.
North Sea resources, if organised in a manner that benefitted the people of Scotland, rather than just companies would contribute to building an economically stronger nation. However, recent progress has been made. The SNP has pledged to create a Net-Zero that aims to generate £1bn to contribute to the North East’s economy. This will allow for oil and gas tax revenues to be ring-fenced in the fund and invested in the North East of Scotland.
Scotland is among the largest sea fishing nations in Europe, with Scottish fishing vessels landing around two-thirds of the total fish caught in the UK. Scotland has vast fishing stocks and is considered one of the richest seas in Europe, with 20% of the EU’s fish coming from Scottish waters. The country also has a vast amount of clean, fresh water and beautiful landscapes which contributes to its thriving tourism sector.
There are very few countries in the world with such a diverse range of valuable natural resources, and as a resource-rich country, Scotland has immense potential to boost its economic development.
2) Prosperity Requires: A Skilled Population
One of Scotland’s most valuable resources is its people. With successful universities (4 in the world’s top 200) and colleges, Scotland has a capable and educated population with boundless potential. Scotland has the most educated people in Europe, with 47% of the population, aged 25 to 64, having a university, college or vocational qualification. This is 4% above the UK and 15% above the EU average. Universities and colleges in Scotland produce high quality research and teaching. This has resulted in Scotland welcoming over 50,000 students from 180 different countries every year, demonstrating its desirable education system, top class universities, and excellent reputation.
However, with Brexit, there is a risk that studying in Scotland will not be as attractive to international students that contribute immensely to Scotland’s economy.
Investment in education is a long-term investment in the wealth of a country, which Scotland has a strong foundation to build on as an independent nation in the EU.
3) Prosperity Requires: Access to Trading Markets
Scotland is well placed for trade. It has a strong trading relationship with countries across the world, especially the United States, with an estimated £5.5 billion of exports from Scotland in 2017.
Most of Scotland’s exports (60%) go to the rest of the UK. This is due to the fact that successive UK governments since Margaret Thatcher have sought to maintain a strong pound to support the financial services sector (mainly based in London). This has forced Scottish business to trade more with the other UK nations as other countries have not been as able to afford Scotland’s exports. Consequently, many Scottish-based manufacturing businesses were put out of business and those that survived were forced to focus on UK trade rather than establishing trading partnerships across the world. However, Scotland holds great potential, with extensive services and access to trading markets, to increase international trade and rapidly expand its exports to the European Union (assuming membership) beyond its 40% (of international exports).
In terms of trade with the USA, the EU and with the rest of the UK, an independent Scotland, with membership of the EU single market, would be in a strong position for further future expansion. An independent Scotland would have the opportunity to maintain a good partnership with its neighbours, however, decrease their dependency on the UK by increasing international exports.
4) Prosperity Requires: Excellent Sectoral Clusters and Products
In the 21st century, Scotland will compete on quality within the global economy. Countries such as China and India and other comparatively low wage economies will produce the cheapest goods. Therefore, Scotland must focus on output that cannot be reproduced. Fortunately, Scotland already has a substantial number of globally renowned sectors and products that are popular in the global market.
Scotland’s strengths in areas such as whisky, life sciences (biological and medical), research and development, renewable energy projects, electronics, textile design and the games industry are competitive advantages in growth sectors. Improvements within these fields have created economic benefits such as Scotland’s Gaming industry which grew by 27 per cent in 2016-17, with direct and indirect revenues of more than £170 million. The Edinburgh-based, Rockstar North, also succeeded in making their game, Grand Theft Auto, one of the best-selling video games ever.
An independent Scotland has the ability to expand on this and boost industries in Scotland by creating an environment where small and medium sized businesses can prosper.
5) Prosperity Requires: Extensive Financial Service Systems
Scotland has many institutions that can handle large scale financial projects, expansions and investments. Outside of London and the South East of England, Scotland is recognised internationally as the most important financial centre in the UK.
The financial sector makes a positive contribution to Scotland’s economy as a whole. This is accomplished through its direct economic impact from financial services and also its employment. Currently, the finance and professional services employ 161,000 professionals, and 290,000 students are studying for future careers in this sector.
With the Brexit deadline approaching and the campaign for a second independence referendum underway, an independent Scotland within the EU is becoming an attractive hub for financial services, as many businesses may need to relocate from London. With the attractiveness of the location, cultural similarities, language, existing highly devoted skill sets, lower costs of living and wages, and the fact that office rents are massively cheaper in Glasgow city centre than in the city in London, it is unsurprising that Scotland is becoming more and more popular amongst financial and business services.
Although Business for Scotland acknowledges the importance of a financial sector, it would be important for an independent Scotland to also consider prioritising other sectors, such as manufacturing. That way, the Sterling will not be kept too high to solely support the finance sector.
Prosperity Needs Independence
Scotland is almost unique in the developed world, holding all the ingredients that contribute towards the creation of wealth, without actually fully enjoying the benefits of it. Other medium sized European countries have used their strengths to become prosperous and successful countries. Scotland has this opportunity too.
Yet, Scotland still lacks the final factor for economic success: self-governance.
Independence would allow for decisions on trade, industry, social security, defence and immigration to be made in Scotland’s interest.
Westminster isn’t working, and this has become more apparent with the chaos surrounding Brexit. With independence, Scotland will have the powers to improve the economy and create more jobs for the benefit of Scotland and the people of Scotland. That is why Scotland would thrive as an independent nation.