The fourth annual edition of the Scottish Productivity Index looks at key productivity indicators including business investment, job vacancies and sick leave to measure Scotland’s performance against other areas in the UK, as well as international competitors.
24 Aug 2023, 2 min read
Key takeaways
- Scotland’s productivity remained unchanged in 2021
- There's been a sharp increase in long-term ill health
- Business investment on the whole lags behind the UK, which itself is below its long-term trend
The 2022-2023 Scottish Productivity Index shows that Scotland lags in 11 of the 13 productivity indicators for which comparable data is available. Overall, productivity growth slowed recently. While labour productivity, in terms of output per hour worked, increased by 1.2 per cent in the UK, Scotland’s productivity remained unchanged in 2021.
In the short term, the Index reveals:
- 9 of the indicators, for which comparable data is available, show signs of improvement
- In particular, 4 out of the 5 indicators around business practice have improved, including business investment, R&D spend and innovation-active businesses
- In skills and training, as well as infrastructure and connectivity, all indicators have turned green, which shows promise
- There's been a sharp increase in long-term ill health
- While skills and training look positive, this hasn’t translated into higher productivity
The long term outlook remains challenging:
- 6 indicators, in particular, need focus
- Long term ill-health increased by 2.3% in under a year and is above the UK average of 25.8% at a time of record workplace vacancies
- While business practices have improved in the short-term, the long-term outlook is not on track for some firms
- Business investment on the whole lags behind the UK, which itself is below its long-term trend
- Exports, as a share of Scottish GDP, is a mixed picture. This trend is slightly downwards, and trading conditions remain complex. However, if the short-term improvements continue, the indicator is expected to turn positive.
The report shows Scotland is failing to make the most of its wealth of experience and high levels of educational attainment. The Government must capitalise on Scotland’s huge opportunity in the transition to net zero. To achieve this, Scotland’s highly educated workforce must be equipped with the right skills and training to deliver sustainable green growth in the race to net zero by 2045.
