The Scottish Government

Business in the Parliament Conference

Speeches to Business in the Parliament Conference

Scottish Parliament, April 23, 2004

1. Speech by First Minister Jack Mcconnell

2. Speech by Deputy First Minister and Minister for Enterprise and Lifelong Learning Jim Wallace

1. First Minister

Introduction

Thank you, Presiding Officer.

I'm delighted to be here this morning and to be able to welcome such a wide range of representatives from the business community in Scotland. This conference will build upon the considerable dialogue which already takes place between Ministers and business but it also offers the opportunity of a new relationship between this Parliament and businesses - large and small. I hope it is the start of something really worthwhile.

Five years ago, we couldn't have had a conference like this one in Scotland.

I believe Devolution has created the conditions to deliver the renewal of our country. It has already led to a renewal in the relationship between government and the people of Scotland - and a renewal in the way we engage with people on the issues that matter most.

It's a sign of the grown up government that we now have in Scotland that we've been able to bring our parliamentarians and business people together in such a setting.

Pooling our knowledge and our expertise - making connections and generating the ideas that will help grow our economy.

But we have to make the most of the opportunity that today's conference gives us.

And, we have to ensure that we have a dialogue with a purpose.

With other ministers, I'm determined to make the most of this conference:

• as an opportunity for our parliamentarians and our business community to work together to find ways of delivering the strong and vibrant economy that we both want; and

• as an opportunity for us to recognise, and to raise the ambitions of our business leaders and our parliamentarians too.

Scotland may be a relatively small country, but there are times when we can use that to our advantage.

Being small means that we can bring our business leaders and politicians together to focus on enterprise and growth - in ways that just couldn't be managed in other countries.

But being small does not mean we think small. On the contrary now is the time to think big.

And it also means that we can be agile in our response - quickly putting our ideas into practice. Ensuring that they make a real difference for business, for our economy and for the people of Scotland.

Scotland's economic renewal

Economic growth must be our main priority, as devolved government, and as a Parliament.

The powers of devolution have given us a fantastic chance to give Scotland a strong competitive edge internationally using our skills, research and ability to innovate - and I'm determined that we make the most of Scotland's potential.

Scotland's people need opportunities - opportunities for good jobs, fulfilling careers, chances to achieve ambitions.

Economic growth is fundamental to the realisation of those opportunities - enriching life for everyone in our country - working for the benefit of the many, not just a few.

Generating a new prosperity that can be shared by all - delivering greater opportunities to more Scots, more consistently, in more parts of the country.

The political renewal that we've been driving in Scotland over the last five years is leading to a profound renewal in other aspects of Scottish life - socially, culturally and economically.

It's important that we see economic growth within this context - as part of our wider renewal as a country.

Thirty years ago, Scotland was a country that relied upon traditional heavy industries for its wealth - industries such as coal, steel and shipbuilding.

But, during the 70s and 80s in particular, we began to move away from dependence on that traditional industrial base.

And while there was some significant - and, I would argue, some unnecessary - pain along the way, we have been resilient enough and have made the transition successfully.

With devolution, we can harness and take forward that economic renewal. And we are doing what we can to encourage the kind of growth that we have seen in our biotechnology, microelectronics and financial services industries - industries where Scotland is now leading the world.

But our challenge now is to build on our successes.

To get the world's knowledge into our economy, and ensuring that we get our knowledge and products out to the world.

These aspirations are not unique in today's global economy. Many other countries across the world will adopt, indeed are adopting, similar strategies.

That's why our approach to economic growth will be crucial. We must be focused. We must be smart. And, we must build on our strengths to secure jobs and prosperity for future generations.

I Infrastructure

Government funds for business are important. Using investment subsidies to help Scottish business grow, and to promote research and development, is a role we must play.

But our approach is about much more than just enterprise support. It's about making sure that we have all the right components in place:

the infrastructure;
the skills and learning;
the enterprising culture; and, of course,
the people.

And finding the most effective policies for these is easier and more successful when we are in dialogue with you and other businesses.

Business leaders have told me consistently that, for Scottish businesses to be successful, we would first have to get our connectivity right - and that we would have to reverse years of underinvestment in our infrastructure.

They were right of course. So we listened to what they had to say and we have acted.

Because of that, Scotland is now connected as never before:

• Business needed more direct flights into and out of Scotland, so we invested, with BAA, in new routes, and our Route Development Fund is making it easier than ever before for businesses to make connections from these to around the world.

• Although, we have some of the least congested roads in Europe, by 2006, we will be providing record investment of over £1 billion per year to improve our transport infrastructure even further. Ensuring that goods get to market quickly, and our people get to work safely and on time. Each year there are now more trains, new tracks and stations, better trunk roads and improved ferry services.

• And we are promoting affordable access to broadband connections across Scotland - increasing our broadband coverage by 40% in just a year and working with companies to go further, in rural Scotland in particular.

This kind of connectivity is clearly important to businesses in Scotland - and it will continue to be important if we are to remain competitive and ahead of the game.

But, there are other areas that are important too.

II. Skills and learning

Skills and learning will clearly have an important role in building the kind of sustainable economic growth we would like.

Compared to other countries, Scotland is already well ahead of the game:

• Proportionally, we have 1/3 more students in higher education than elsewhere in the UK - and, we graduate more students than most places in the western world

• Our universities are increasingly high profile on the world stage for turning ideas into commercial products - and spin-off companies from Scottish universities already produce patents and licence fee income at rates comparable to major economies like the US

• And we're now providing more opportunities for our young people to acquire the kind of knowledge and skills that businesses need - providing nearly 30,000 Modern Apprenticeships, helping our young people with better student bursaries and educational maintenance allowances, and crucially reintroducing worthwhile vocational options into the school curriculum.

Having a powerful research base and a skilled workforce are vital if we are compete economically - if we are to attract investment and take our knowledge and skills out into the world.

But, again, the real challenge will be in building on what we've already got to ensure that our research and skills remain relevant and in touch with what businesses need.

III. Enterprising culture

Infrastructure and skills will continue to dominate our investment, but there are two other issues I want to mention to start off today's discussions.

It's one thing providing our people with the knowledge and the skills - but we also have to encourage them to become more aspirational in their outlook, more confident in what they can achieve.

For too long Scotland has suffered from a dependency culture - depending on others to provide, and not taking responsibility for change. Leaving it to others to take the risks, while lacking the confidence to take those risks ourselves.

That attitude is reflected in Scotland's relatively low business start up rates - and it is an attitude that is beginning to change.

We have to encourage more and more Scots to take risks.

We have to give them the courage to fail and to get up and try again. Not to be held back by a fear of failure, a fear of what others think.

To do this, we have to get into our schools and to promote an enterprising attitude in our children and young people.

That's the thinking behind our Enterprise in Education strategy.

Through this strategy, we aim to deliver a cultural shift to a more enterprising Scotland.

Promoting a 'can do' attitude, and showing our children and young people that there is value in taking a more enterprising approach to life and to business.

With other ministers, I'm encouraged by the response that we've had from Scotland's business community to help us deliver our strategy - and, I'm encouraged too by the positive impact enterprise experiences are having on our young people.

These are early days yet, but the signs are that this approach will come to have a lasting effect - not just on individuals, but on our economy generally over the coming years.

IV. Population

Finally, I want to say a few words about reversing our population decline.

As most of you already know, our population is falling. And falling at a faster rate than anywhere else in Europe.

If left unchecked, this will have a serious impact on all aspects of Scottish life.

The facts of the matter are simple - we need a growing population for a growing economy.

I believe that we can do something about our population decline - we don't have to accept it as unavoidable.

I believe that we can persuade more people to stay - and that we can encourage Scots who have moved away to come back home.

And I believe that we can attract fresh talent to Scotland - from the rest of the UK from the EU and from further a-field too.

The Scottish business community has been extremely supportive of our fresh talent initiative - and we are grateful for that. Scottish businesses have picked up on the fact what we are doing the right thing by Scotland.

You know that there must be a flow to and from Scotland of people, ideas and talents.

You know that, with the right talent in place, Scotland can become globally competitive.

And you know that we need new talent to drive forward our future economic performance - to secure our growth and well-being as a country.

Conclusion

In the first five years of devolution, we've already had a major impact on Scotland's long term economic future.

If you haven't already noticed, there are now jobs again in Scotland:

• there are fewer people unemployed now than at any time since I was at school

• long term youth unemployment has all but been eliminated

• and there are more jobs in Scotland than for a generation

And these are remarkable achievements - but they shouldn't give rise to complacency.

Our challenge over the next five years is to ensure that we have the solid foundations for a new era of growth and prosperity.

As I've said, it's not just about supporting enterprise - it's about much more than that.

Scotland's future economic performance will depend on us having the right components in place to perform on the international stage - the infrastructure; the skills and learning; the enterprising culture; and the people.

It will depend on us building on the strengths that we already have in our infrastructure and our skills and learning - and in developing new ways to attract fresh talent and to promote a more enterprising culture.

And it will depend on us forging a whole new relationship between our politicians and our business leaders.

Working together with a common purpose.

Working together to develop ideas and to maximise the drivers for growth.

Working together to give Scotland the edge in today's and tomorrow's knowledge economy.

And, if I can finish on this point. Working together to celebrate our country and its successes - large and small. Working together to challenge the culture of criticism, negativity and blame. Working together to promote Scotland abroad, congratulate those who do the right thing and working together to show young Scots that ambition and pride are important.

Thank you.

2. Deputy First Minister and Minister for Enterprise and Lifelong Learning

I want to begin by echoing the words of welcome from Presiding Officer andFirst Minister, and also to thank Iain and Andy for their insightful and constructive contributions.

Today is an important and, in many senses, a unique event - certainly inScotland, though the concept is well-established elsewhere, most notably in theUnited States. I would also wish to record my appreciation of the contribution made by Alex Neil in the development of the idea of today's conference.

And let me be clear - right at the outset - today is certainly not an end in itself, but rather part of an ongoing process. We value the dialogue and engagement we have with business and want to develop it further. Building a shared understanding of the issues that do and will affect business - and, even more importantly, finding ways to work together to resolve these issues and achieve the shared objective of growing Scotland's economy.

Scotland's business andScotland's government want the same things - a strong vibrant economy - a strong vibrant and inclusive society - in a confident, modern and dynamicScotland.

Aims of the Conference

We have already heard much in this morning's speeches which I think provides food for thought for the breakout sessions. As I said last night, however, today is about hearing from you - from those directly engaged in running businesses of all sizes, in all sectors and in all parts of the country.

Before we go off to begin the work of the breakout groups, I would like to briefly offer my thoughts on what I believe can and should be achieved by today's event and through the work we take forward as a consequence.

Firstly, I don't think anyone should underestimate the value we attach to the contact we have with business organisations and individual businesses. This is certainly imperative for us as Ministers, but I certainly can vouch for the importance such contact has for individual MSPs and, indeed, for the Parliament as an institution.

Let me state for the record that I entirely reject the assertion that there is a fundamental disconnect between politicians and business in Scotland, but I am well aware of the constant challenge to remain engaged and find innovative and creative ways to broaden and deepen the dialogue we have. In that respect, I hope today's event will help this process - perhaps spawning other, regional or local events as well as encouraging others to see the value in becoming involved in future initiatives of this sort.

Catalan business experience of devolution

By way of illustration, by the summer, Ministers will have put out for consultation proposals on reforming the planning system, addressing the issue of pricing and charging for water and wastewater and developing a strategy for securing indigenous wealth, jobs and opportunities from so-called 'green' industries.

I'm sure I speak for most of the MSPs in this Chamber when I say that few are the meetings I have had with businesses - of whatever size or sector - where the issue of planning delays and water charges have not been raised. Whatever the particular views of those contributing to such consultations, the policy-making process is undoubtedly enhanced through the detailed contributions made by people such as you - whether directly or as part of contributions from your representative organisations. I hope that today helps to reinforce that point.

And, in a broader sense, I hope that today will help demonstrate the breadth of issues that have a direct bearing on economic development - on our ability to achieve our objective of growingScotland's economy. As I'm sure the discussions groups will bear out, economic development encompasses anything that increases the wealth-creating capacity of our society.

For example:

·It includes building on the substantial investment made in further and higher education - ensuring our competitive advantage is maintained;

·It includes delivering enterprise in primary and secondary education, imbuing in young people positive confident attitudes, good core and employability skills, an understanding of business and entrepreneurship, and a thirst for lifelong learning

·It includes investing in our transport and electronic infrastructure, through roll out of our £1 billion transport investment and stimulation of broadband coverage and take up;

·It includes promoting public health and the health of the workforce, which will have a direct bearing on productivity

·It includes delivering safer communities for people to live in, and for businesses to operate in.

·It includes working to reduce the legislative burden on business and red tape (the Executive is sponsoring 2 Open Days for business in May with Custom & Excise and the Inland Revenue - one in Glasgow and another in Nairn).

·It includes growing our existing businesses - supporting them through key growth stages and in exploring and developing overseas markets - as well as supporting new start ups.

·It includes encouraging and supporting responsible risk taking and an entrepreneurial culture; raising our R&D levels and innovating to develop new markets and technologies and boosting research capacity and innovation (through a range of programmes including Intermediary Technology Institutes).

From this brief, illustrative list it can be seen that there are few parts of government inScotlandthat will not have some contribution to make to our economic development. I hope that today - and through the discussion groups - we can develop thinking on how best we bring to bear all the levers at our disposal in helping to grow Scotland's economy.

Clearly it is business that creates wealth - not governments. The challenge for us as a government and Parliament, however, is to provide the right conditions for growth and direct public sector support and intervention where it can be most effective. Public sector intervention should aim to tackle the causes rather than just the consequences of market failure. As some of you will know, we are currently refreshing our enterprise strategy, A Smart, SuccessfulScotland. My final hope for today is that we are able to have a full and frank discussion about all these issues - identifying the lessons to be learned and the new challenges to be met.

And I make a commitment to you now that as we take forward the re-freshing of Smart Successful Scotland, these views will be taken into consideration. Moreover, the Annual Business Forums planned for each subsequent year of this Parliamentary session will present an opportunity for continued engagement and to update and monitor the key actions identified today.

Conclusion

It is perhaps self-evident, but I believe worth re-stating just why it is that growing the economy is our top priority - why the discussions we are having today are so important. Sustained and sustainable economic growth is about more than just statistical indicators pointing in the right direction. Growth has a very human side. Growth brings jobs. Growth brings fulfilment to individuals and communities. It has the ability to inspire people to meet their full potential - to revitalise people and the areas in which they live.

This cannot and should not be underestimated - a strong, growing, vibrant, inclusive economy is crucial for all Scots, for their families, for their communities, for their financial and social wellbeing, and at all at all stages of their lives, study or work. This should not be underestimated. That is why it is - quite properly - our top priority, encompassing all aspects of the work we do.

Given the importance of the task, it is perhaps only fair that we offer you coffee before inviting you to move into the discussion groups! Our event managers will have notified you of your proposed colour coded group and are on hand to direct you to the right room.

The groups - which will focus on key themes from Smart Successful Scotland - will be chaired (firmly but fairly) but representatives of the main Scottish business organisations. We have asked a number of broad questions to help the discussion in each group - and a panel in each group will help lead off the discussion. I hope that this will facilitate a good, open debate and I look forward to hearing the outcomes from your discussions this afternoon.

Thank you again for your time and your commitment for what I hope will be a rewarding and stimulating exercise for all involved.