Scottish Government

Why is this Purpose target important?

Productivity is a measure of how well an economy uses resources to produce output and is a fundamental determinant of international competitiveness and living standards.

Productivity is generally measured as the amount of output (goods and services) produced in an economy adjusted for the amount of labour (i.e. the number of workers or hours worked) used to produce that level of output. However, the Government Economic Strategy also emphasises that a focus on resource efficiency will help ensure that the Scottish economy remains competitive in globally challenging times, and provide opportunities for a new source of long-term competitive advantage.

Over the long-term, improvements in productivity performance will increase the competitiveness of an economy and make the largest contribution to increases in overall economic growth rates. Improving Scotland's productivity performance is therefore central to the Government Economic Strategy.

What will influence this Purpose target?

International evidence identifies a range of drivers that influence productivity performance, including:

• Investment in Infrastructure
• Resource Efficiency
• A skilled, educated and adaptable workforce
• Innovation, Commercialisation and Research and Development (R&D)
• Enterprise
• Effective and efficient public services
• A competitive business environment

What is the Government's role?

In line with these drivers, the Government Economic Strategy sets out a range of actions to support improvements in Scotland's Productivity Performance, including:

• Helping firms to compete in international markets
• Encouraging leadership development and effective skills utilisation
• Supporting resource efficiency and the transition to a low carbon economy
• Investing in Scotland's transport and digital infrastructure
• Supporting innovation and commercialisation
• Ensuring education is responsive and aligned to demand
• Improving health and well-being
• Effectively utilising Scotland's public resources
• Providing effective and accessible enterprise support

How are we performing?

The evaluation is based on the change in the gap between productivity levels in Scotland and the lowest ranked country in the top quartile. Germany has been the lowest ranked country in the top quartile since 2006. In 2011 Scotland was ranked 17^th (out of 32 countries) for productivity levels amongst OECD countries,  placing Scotland at the top of the third quartile.

In 2010, Scottish Productivity levels were 84.6% of levels in Germany, whilst in 2011 Productivity levels in Scotland were 84.5% of levels in Germany. Therefore the gap between Scotland and Germany (the lowest ranked country in the top quartile) increased from 15.4% to 15.5% between 2010 and 2011 – although when presented to one decimal place the change in the gap between 2010 and 2011 was 0.0 percentage points.

Note - performance against this indicator has been updated following the publication of revised estimates of Regional Productivity statistics by the Office for National Statistics on 28^th February 2013. More information can be found at: http://www.ons.gov.uk/ons/guide-method/method-quality/specific/economy/productivity-measures/labour-productivity/information-note.doc

Source: Organisation for Economic Co-operation and Development, Office for National Statistics

The data for this chart is available at the bottom of the page

Source: Organisation for Economic Co-operation and Development, Office for National Statistics

Criteria for recent change

This evaluation is based on: any difference in the gap within +/- 1 percentage points of last year's figure suggests that the position is more likely to be maintaining than showing any change. A decrease in the gap of 1 percentage point or more suggests that the position is improving; whereas an increase in the gap of 1 percentage point or more suggests the position is worsening. The change in levels are calculated using unrounded numbers, but are only presented to 1 decimal place.

Further Information

For information on general methodological approach, please click here.

Scotland Performs Technical Note

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