Transcript Ewan Mearns` Powerpoint Presentation

SURF Conference : The Future for
Communities
What could be the economic factors we
need to be aware of ?
Ewan Mearns
Scottish Enterprise
The story so far ...
What kind of economy has been sustaining
Scotland’s communities in the recent past ?
Changing Economic Structure
1950’s
2000’s
 25 Shipyards
 4 Shipyards
 113 Coal mines
 0 Coal mines
 6 Steel works
 0 Steel works
 0% world’s oil
 3% of world’s oil
 Employment:
 40% of EU’s PCs
 35% manufacturing
 Employment
 45% services
15% manufacturing
 6% business services
75% services
 21% business services
Manufacturing and Service Sector Employment
2,000,000
1,750,000
1,500,000
1,250,000
Services
1,000,000
750,000
500,000
250,000
Manufacturing
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
0
Where do we work? % breakdown of jobs
Public Services
Retail & Wholesale
Business Services
Manufact. (ex. Elect)
Hotel & Catering
Construction
Other Services
Transport/Comms
Financial Services
Electronics
%
Agriculture
0
5
10
15
20
25
30
Growth in GDP (1975=100)
170
160
150
140
130
120
110
100
90
SCOTLAND
UK
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1981
1979
1977
1975
20%
Productivity in 2000 (UK=100)
USA
G7
France
Germany
UK
Scotland
Japan
0
50
100
150
ILO Unemployment Rates Scotland and Great Britain
%
9
8
7
6
5
4
Great Britain
Scotland
May-01
May-00
May-99
May-98
May-97
May-96
May-95
May-94
May-93
May-92
3
A changing (but under-performing) economy ...
 Relative transition from a traditional manufacturing to a service
and knowledge-based economy
 importance of foreign investors to manufacturing employment and
productivity
 Scottish GDP growth and productivity lagging behind UK (and
competitors) … and gap widening
 declining unemployment during 1990s
… but with encouraging signs of future growth
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the emergence of new sectors of economic activity
strong growth in service-sector jobs
commercialisation of academic knowledge
more young people entering FE/HE
more recently, a stable macro-economic environment
New jobs and activities
 Financial services
 Scotland 6th largest equity centre in Europe
 Biotechnology
 home to 20% of UK biotech companies, employing 24,000
 Optoelectronics
 employs 5,000 people, 60% output exported
 Creative industries
 digital media, games, Edinburgh Festival injects £120m annually
Growth in Scotland by Sector 2002-2006 (GDP %)
Financial Services
Business Services
Other Services
Construction
Hotel/Catering
Chemicals
Retail/Wholesale
Electronics
GDP
Public Services
Manu (ex. Elect)
0
1
2
3
4
More people entering FE/HE
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
1981/82 1985/86 1989/90 1993/94 1997/98
Total
HE
FE
Some drivers of future economic change
The changing nature of ‘value’ in the economy
 Increasing importance of ‘intangibles’ in creating value:
 software, services (with products), speed, ideas/creativity,
brands/trust, experience etc.
 New ways of doing business
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mass customisation eg Dell, Dulux
knowledge management eg Skandia
innovative business models eg Egg, e-Bay, Dyson
brands and values eg Intel, Nike
experience eg Disney
A more global, networked economy
 differential cost of labour
 the end of the ‘assembly plant’ era in Scotland
 much closer ties between national economies
 vulnerability to economic shocks
 a smaller, ‘connected’ world
 agglomeration effects
More demanding and prosperous consumers
%
Household income and expenditure
35
30
25
20
15
10
5
0
120
100
80
60
40
20
0
1968
Food & Fuel
1978
Leisure
1988
1998
Real income (right axis)
Source: ONS
From mass production to mass customisation
People, skills and talent
 Importance of ‘know how’ vs ‘know what’ in the knowledgebased economy
 Future skills trends
 core skills : basic skills; communication skills; problem-solving,
planning and teamwork; IT skills
 occupations : managers; public sector professionals;
elementary caring and service occupations
 Talent as key; diversity as driver
It’s not the strongest of the species that survive, nor the most
intelligent but the ones most responsive to change
Charles Darwin
The rise of the creative class
 Richard Florida says: innovation flourishes in places that
attract creative people, places with the following attributes :
 critical mass of cultural and natural assets
 open attitude to new and unconventional ideas and people
 cultural eco-system - many forms of creativity take root and
flourish
 attract new and different kinds of people
 make rapid transmission of knowledge & ideas easy
 have low barriers to entry – economic, social, civic
creativity drives innovation
innovation is the key to sustained economic growth
'Prime' Working Age Population (20-34 years),
2000 to 2010
Thousands
1,080
1,060
1,040
1,020
1,000
980
960
940
920
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
Year
2000
900
Scotland's Puture Population of Pensionable
Age (% of total population)
22
21
20
19
18
17
16
2000 2001 2006 2011 2016 2021 2025
How can Scotland’s communities become more
successful in the future economy ?
Foster a supportive environment for enterprise
 more new and growing small businesses
 host to new/emerging activities eg social enterprise, digital
media
 more diversified local economies
 exploiting academic knowledge
 no low-tech industries, only low-tech companies
 new sources of value … not just high-tech
 importance of global connectivity
Be home to diverse and adaptable people
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openness, willingness to change
attracting, retaining - and losing - a diverse range of people
new ideas and influences
making the most of our human capital
enthusiasm for learning - across all ages