First Minister Alex Salmond
National Economic Forum
Inaugural Meeting
Wednesday, February 6, 2008
________________
It is a great honour - and indeed a pleasure - to be able to open this first meeting of the National Economic Forum.
I should first say that I and my Ministerial team here today - John Swinney, Fiona Hyslop, Jim Mather and Mike Russell - are delighted that this Forum is bringing together leaders from across Scotland's economy - in business, in the trade unions, in local government, in the voluntary sector and academia.
Many of you will know that before my career in politics I worked for several years as an economist - first in government and then in the private sector, for the Royal Bank of Scotland.
And while my role has certainly changed since becoming a parliamentarian twenty years ago - my basic philosophy has not. Today, in government, I believe more than ever that our success will be measured - and indeed defined - by the economic decisions that we take.
That is why the central Purpose of this Government is to increase the sustainable rate of economic growth in Scotland. That Purpose permeates each and every policy decision that we take as an administration - now and in the coming years.
And that is why - with the National Economic Forum and the Council of Economic Advisers - we have set up entirely new structures to debate and advise on the development of the Scottish economy.
I will go on to say more about the specific role that this Forum will have in shaping Scotland's economic policy - and indeed our economy - in the coming years.
But first let us consider briefly the enormous economic potential of this country, and the ambition that we seek to achieve.
Scotland 's economic potential
When we launched the Economic Strategy in November, John Swinney and I set out clear economic goals:
- to match the UK growth rate by 2011
- by 2017, to raise our performance to match that our dynamic neighbours in the Arc of Prosperity
- at the same time, to maintain our strong performance in labour market participation
- by 2017, to improve - in absolute and relative terms - the economic position of those in the three lowest income deciles
These are ambitious goals. These are clear goals, against which this Government will be held to account. But these are also entirely realistic and achievable goals.
To those who would argue that economic transformation cannot be achieved in Scotland, I would say: look at our history - the lessons are clear.
The Scottish economy has undergone several major transformations since the Industrial Revolution.
From the eighteenth century, as a relative laggard with a narrow industrial base.
To the global powerhouse of innovation and industry in the nineteenth century - and probably the richest nation per capita on earth.
And latterly, for most of the twentieth century, an economic underachiever - steadily caught and overtaken by our neighbours in Ireland and the Nordic countries.
So the question is not whether economic transformation is possible in Scotland. The modern global economy - with its huge and growing flows of trade, investment and knowledge - and its new poles of growth and development - ensures that economic change in Scotland is a certainty.
The real question is whether we have the ambition - and the right economic strategy - to succeed.
This Government is certain that we do. And together with you, we are determined to succeed.
National Economic Forum and the economic strategy
So let me set out clearly where we look to the National Economic Forum to deliver for Scotland - where you have a unique and vital contribution.
The Government Economic Strategy was clear about the scale of our economic potential. And it was equally upfront that government alone cannot meet the challenge.
For that, we require a strong partnership among all the key players - the businesses represented here today. Trade unions and your members. Organisations across the voluntary sector. And central and local government.
That is why we have created this Forum - to bring you together and to hear from you on the realities and the opportunities facing Scotland's economy.
And let me highlight two particular areas where we value your input. In a sense, these two issue go right to the heart of the Government's Economic Strategy. They are first, human capital - that is, the skills, knowledge and potential of our people. And second, comparative advantage - strong and competitive industries that will secure Scotland's place in the global economy.
To succeed in the global economy a nation must perform well in both aspects. The lesson from Scotland's recent performance is that a well educated workforce alone is not sufficient. Too many of our talented young people leave Scotland in search of high value jobs and opportunities that are not available here.
So we must build a skilled, educated and flexible workforce in Scotland. And we must ensure that the economy generates the high value jobs which will allow our people to maximise their productive potential.
That is the underpinning of our economic strategy. Let me relate it very clearly to the work of this Forum - and to your discussions today.
The first debate today, on a smarter Scotland, will be chaired by Fiona Hyslop. What will be particularly valuable are your views on where our schools, colleges and universities are delivering for the Scottish economy - and where we can do more.
In short, is the Scottish economy on track to produce a world class labour force? And how can we make sure that we stay on track?
Following this debate, John Swinney will lead discussions on building a wealthier and fairer Scotland. This debate will raise several important questions. And let me highlight one in particular - how can we maximise the growth potential of sectors of comparative advantage?
In other words, how will we ensure that the Scottish economy can continue to move up the value chain and generate strong, sustainable economic growth?
Those are two sets of issues where your input is vital. And as firms competing in global markets, as employers, as educators, as trade unions - no one is better placed to consider the realities of Scotland's place in the global economy. The prospects for the Scottish workforce. And the potential that you see for our future.
Let me be clear about how we will use the advice and the ideas from this Forum.
We do not expect you to have cracked every question by lunchtime today. These are complex and long-term challenges.
We will study very carefully the issues that you raise - today and in subsequent meetings. We will consider where the Scottish Government can take action.
And John Swinney and I will take your conclusions straight to the Council of Economic Advisers - to ensure that there is an unbreakable link between our economic vision, our overall strategy, and the real opportunities for the Scottish economy.
Recent progress by the Scottish Government
Having set out the great value that we attach to the National Economic Forum, allow me to touch briefly on the business of government.
I said earlier that each of the decisions that this Government takes is guided by our economic Purpose. Let me explain.
Many of you here will be following discussions on the Budget. We face a crucial vote later today. John Swinney and I would love to be able to outline the final shape of the Budget. But we are not yet in a position to do so!
I can say this, however. The new investments that the Scottish Government is proposing - in education, in transport, in social enterprise and in cutting rates for small business - are all made with the aim of increasing sustainable growth in Scotland.
And in addition to these new measures, John Swinney is working on a new tool - a carbon assessment framework - that will enable the Scottish Government to assess the full economic impact of future measures that we propose.
I expect Mike Russell will want to say more about this in the debate on a greener Scotland.
And just last week, we unveiled an ambitious package of reforms to deliver simpler and more effective government in Scotland.
I know that some have described these reforms as a bonfire. Others as a towering inferno. I prefer for now to describe it as a good going blaze!
The point of these reforms is not just to make the work of government simpler for Ministers. It is in fact mainly about making government easier to deal with - for business, for citizens and for the third sector.
When I presented these reforms to Parliament I noted that if simpler, more effective government could raise the productivity of Scotland's private sector by just 1 per cent, the increased benefit to Scotland's economy would be around £800 million.
Conclusion
So we are not only taking right decisions on the economy - the Scottish Government is reforming itself.
To deliver better public services. And to be a better partner in the economy.
And, with the launch of the National Economic Forum today, we are making clear our determination to reach out across the Scottish economy to build a consensus on what we can achieve as a nation - and how we get there.
This Forum and its partner, the Council of Economic Advisers, are designed to anchor economics at the heart of this Government. They are vital means to achieving our economic purpose and deliver for the people of Scotland.
Your work and your contribution is vital for Scotland's economic success. So I would like to thank each of you for your commitment to this Forum.
And personally - and on behalf of all my Ministers - I look forward to a long and successful partnership.
Thank you.