Donald JR MacRae

Lloyds TSB Scotland12th April 2005

Scotland’s Business Growth

Enterprise and Culture CommitteeThe Scottish Parliament

Scotland - The Gap?

Source: Measuring Scotland’s Progress Towards Smart, Successful Scotland 2004.

4 3 2 1

Scotland’s Quartile Position in OECD Countries 2002No. of

Comparators

30

181121

26

9

2930

30

29

2815

Overall Progress GDP per head

Growing Businesses New business starts per 10k head pop.

% of businesses trading on-line

Business R&D as % of GDP

Relative productivity levels

Global Connections Cost & coverage of broadband

% employers exporting

Graduates as % of workforce

Net migration as % population

Skills & Learning Employment rate

% of 16-19 year old NEET*

% in employment undertaking training

* Not in education, employment or training.

0

40

80

120

160

200

240Lu

xem

bour

g

USA

Norw

ay

Eire

Switz

erla

nd

Cana

daDe

nmar

k

Net

herl

ands

Aus

tria

Icel

and

Aust

ralia UK

Belg

ium

Swed

enFr

ance

Japa

n

Finl

and

SCO

TLA

ND

Ger

man

y

Italy

OEC

DSp

ain

New

Zea

land

Kore

a

Gre

ece

Port

ugal

Cze

ch R

epub

lic

Hung

ary

Slov

ak R

epub

licPo

land

Turk

ey

Index: OECD = 100GDP per Capita - 2002 PPPs

Source: OECD (2004), DTI: Regional Competitiveness & State of the Regions (May 2004).

Note: Scotland estimated at 94.6% of UK.

high income high middle income group low middle income group group 101-120 51-100 over 120

International Comparisons of GDP Growth 1973 - 2001

5.2

3.33.0 2.8 2.8 2.6

2.3 2.2 2.1 2.0 1.8 1.6

Irela

nd

Nor

way

Can

ada

Uni

ted

Stat

es

Japa

n

Finl

and

Italy

Fran

ce UK

Ger

man

y

Swed

en

Scot

land

Country

Growth, per cent

Source: Goudie (2003).

Key Drivers of Productivity Improvement

• Human capital

• Physical capital

• Innovation

• Enterprise

• Competitiveness

Population Trends: Scotland and UK, 1951-2011

Source: Scottish Executive (2000).

UK

Scotland

Index:1995 = 100

Scotland’s Birthrate in a European Context

1.241.251.291.29

1.421.50

1.571.651.691.691.731.74

1.901.90

ItalySpain

GermanyGreece

Portugal

ScotlandSweden

BelgiumEngland

NetherlandsFinland

Denmark

FranceIreland

Total Fertility Rate* 2001

Source: Turner, A., Reflections on the Allander Series. (2004).

* Children per woman

Assumed Annual Long Term Migration by AgeScotland 2006-2007 onwards

4,000

3,000

2,000

1,000

0

-1,000

-2,000

-3,000

Persons

0-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65 & overYears of Age

Source: Experian Business Strategies, March 2005.

GDP per Hour Worked 2001

132.9119.9 118.1

100.0 95.787.2

France USA Germany UK Scotland Japan

Index: UK = 100

Source: Scottish Economic Report November 2004.

% working age population in employment OECD

% 16-19 year oldsNEET* OECD

% 20-24 year oldswith at least NVQ 3 UK

% young people with adequate skills (PISA) OECD

% working age populationin education, training UKor employment

Scotland - Skills and Learning

Indicator Quartile Position Comparators

4 3 2 1

Source: Measuring Smart Successful Scotland (2004). Training and Employment Unit, University of Glasgow.

* Not in education, employment or training.

Business R & D Expenditure

as % Output 1990-98

0.62

1.351.45

1.77

1.98

USA Germany France UK Scotland*

%

Source: Crafts and O’Mahony (2001) and DTI (2001).

*1995 - 99

Source: Global Entrepreneurship Monitor, Scotland 2003.

New Business Activity

Scotland

United Kingdom

Ireland

Aggregate Government Expenditure

0

10

20

30

40

50

60

Scotland UK

Source: Goudie (2002). Scottish Executive, GERS 2002-2003.

78-

79 79-

80 80-

81 81-

82 82-

83 83-

84 84-

85 85-

86 86-

87 87-

88 88-

89 89-

90 90-

91 91-

92 92-

93 93-

94 94-

95 95-

96 96-

97 97-

98 98-

99 99-

00 00-

01 01-

02 02-

03

% share in GDP, 1978-79 to 2002-03

Aggregate Government Expenditure % Share GDP 2003

58

56

55

52

51

51

51

50

49

49

49

48

47

47

43

40

35

Sweden

Denmark

France

SCOTLAND 2004**

Belgium

Austria

Finland

SCOTLAND 2002-03*

Italy

Germany

Netherlands

Portugal

Greece

Luxembourg

UK

Spain

Ireland

Source: Verhulst et al. (2005). *GERS 2002-2003; **Author’s calculation

Scotland - The Gap?

Source: Measuring Scotland’s Progress Towards Smart, Successful Scotland 2004.

4 3 2 1

Scotland’s Quartile Position in OECD Countries 2002No. of

Comparators

30

181121

26

9

2930

30

29

2815

Overall Progress GDP per head

Growing Businesses New business starts per 10k head pop.

% of businesses trading on-line

Business R&D as % of GDP

Relative productivity levels

Global Connections Cost & coverage of broadband

% employers exporting

Graduates as % of workforce

Net migration as % population

Skills & Learning Employment rate

% of 16-19 year old NEET*

% in employment undertaking training

* Not in education, employment or training.