Productivity progress but Scotland starts a lap behind the competition

Overall picture:

• Right now: 9 out of 15 key indicators show Scotland falling behind other parts of the UK or international competitors
• But progress is being made in some areas¹:
  • In the short-term: 5 key indicators show improvements in productivity
  • In the long-term: 9 key indicators reflect improvements in productivity

With Scotland experiencing a decades-long challenge to boost productivity levels, CBI Scotland and KPMG have launched the first edition of the annual Scottish Productivity Index to help accelerate solutions to this complex problem.

Applying the mantra of ‘what gets measured gets managed’, the index unpacks productivity into 15 underlying indicators that track Scottish performance, based around four broad areas: business practices, skills and training, health and wellbeing and infrastructure and connectivity.

The Index contains a number of straight-forward recommendations for government and business, making the case that improving productivity needs joined-up action.

Recommendations to boost Scotland’s productivity include:

• Establish a ‘Productivity Data Bank’ for Scotland to provide access to and improve productivity tracking data across the public and private sectors
• Set a target for 100% of the workforce to have basic digital skills by 2025 – with government and business working together to ensure everyone can benefit from the digital economy
• Recognise the importance of workforce mental health – with companies investing in mental health strategies and government ensuring mental health services are prioritised, properly resourced and made readily available
• Companies should map existing workforce skills and training provision with employees to enhance on-the-job coaching and make the workforce ready for the future
• Prioritise investment in management and leadership skills – ensuring they’re rooted in great people practices and build capabilities across the business

Read all 24 recommendations for business and government.

Tracy Black, CBI Scotland Director, said:

“We’re proud to launch the first edition of the Scottish Productivity Index, something we think can bring fresh insights and urgency to the debate about how to get Scotland’s economy firing once again. Brexit aside, boosting weak productivity has been the main focus of CBI Scotland’s work over the past few years.

“While these findings show that Scotland starts some way behind when it comes to certain productivity measures, we also know that progress is being made. I’m confident that by benchmarking progress in this way, we can find solutions to deliver the step-change Scotland desperately needs.

“It’s only by really honing-in on what productivity means, unpacking it for government and business audiences, and using the latest insights and analysis to chart progress that we stand a real chance of addressing a stubbornly persistent issue and deliver more jobs, higher wages and future prosperity across the whole country.”

Jenny Stewart, Chair of the Business Advisory Group, KPMG Partner and Head of Infrastructure, Government and Healthcare in Scotland, said:

“Amid growing geopolitical and economic uncertainty, improving productivity is fundamental to how much we earn; how fast our wages grow; and how much of a contribution every individual in Scotland pays in taxes to support good quality public services and a vibrant, sustainable economy.

“Tackling the productivity challenge could unlock thousands of pounds in higher annual earnings for the average worker and create a more competitive country that can thrive in the international marketplace. Our report highlights some of the challenges we face right now, but it also identifies a number of key, straight forward actions that we can all take to unlock future growth. Now, more than ever, we need to address productivity in Scotland, and build a more, successful, prosperous and inclusive nation.”