Why is this Purpose target important?
Increasing sustainable economic growth is important if we are to:
- Generate greater and more widely shared employment.
- Create more highly skilled and better paid jobs.
- Provide better quality goods and services and more opportunities for people.
- Support better and higher quality public services.
- Foster a self-sustaining and ambitious climate for entrepreneurs.
- Encourage economic activity and investment across Scotland.
- Bring a culture of confidence and personal empowerment to Scotland.
- Secure a high quality environment and a sustainable legacy.
What will influence this Purpose target?
In the long term, there are three means by which the sustainable rate of economic growth in Scotland can be accelerated and per capita income raised:
- Increasing the level of labour productivity and competitiveness.
- Increasing the participation rate and so the number of people actually working.
- Increasing Scotland's population and the supply of potential workers.
These can be mutually reinforcing. By making Scotland a more prosperous place to live and work, for example, we are more likely to attract highly skilled people to contribute to, and share in, that prosperity. Higher wages make work a more attractive proposition increasing participation in the workforce. Higher economic growth can increase the attractiveness of Scotland in a world where mobile businesses look to invest in successful places with a critical mass of knowledge, skills and connectivity.
Several of the levers to influence these targets lie at a UK rather than a Scottish level. However, where there is scope for the Scottish Government to intervene, action will be taken, so long as it can be justified on the basis of analysis and evidence, taking full account of identified market failures and legitimate equity concerns.
What is the Government's role?
If we are to deliver increasing economic growth, that is sustainable and equitable, we must focus on improving our productivity and competitiveness, our labour market participation and our population growth. To do this, we will take action in five Strategic Priorities that are internationally recognised to be critical to economic growth:
- Learning, skills and well-being.
- A supportive business environment.
- Development of infrastructure and place.
- Effective government.
- Equity across Scotland's people, communities and generations.
How are we performing?
For UK Target:
Annual Gross Domestic Product ( GDP) growth rates for Scotland and the UK are calculated on a rolling four quarters on four quarters basis. UK annual GDP growth has been higher than Scottish GDP growth at all points over the time period 1999Q4 to 2008Q2. From 2008Q1 and 2008Q2, annual GDP growth in Scotland fell from 1.9% to 1.8%, while the figure for the UK fell from 2.8% to 2.5%. Consequently the gap between Scottish and UK annual GDP growth rates decreased from 1 percentage point to 0.7 percentage points (note that growth rates are calculated using unrounded numbers, but are only presented to one decimal place).
Source: Scottish Government, Office of the Chief Economic Adviser
For Small EU Countries Target:
The small independent EU countries are defined as: Austria, Denmark, Finland, Ireland, Luxembourg, Portugal and Sweden. Annual Gross Domestic Product ( GDP) growth rates for Scotland and the Small EU Countries are calculated on a rolling four quarters on four quarters basis. Annual GDP growth over the period 1999Q4 to 2008Q2 in the small EU countries has generally exceeded Scottish annual GDP growth rates. From 2008Q1 and 2008Q2, annual GDP growth in Scotland fell from 1.9% to 1.8%, while the figure for small EU countries fell from 2.5% to 2.0%. Consequently the gap between Scottish and the small EU countries' annual GDP growth rates decreased from 0.6 percentage points to 0.2 percentage points.
Source: Scottish Government, Office of the Chief Economic Adviser, Organisation for Economic Co-operation and Development
Methodology
This evaluation is based on: any difference in the gap in annual growth rates within +/- 0.1 percentage points of the last quarter's figure suggests that the position is more likely to be maintaining than showing any change. A decrease in the gap of 0.1 percentage points or more suggests that the position is improving; whereas an increase in the gap of 0.1 percentage points or more suggests the position is worsening.
For information on general methodological approach, please click here.
Further Information
2007 Spending Review Technical Note
Statistics Topic Page