By John Macintosh, Partner and Head of Tax for Deloitte in Scotland
Deloitte is very proud to be supporting the Fraser of Allander Institute’s Economic Commentary. Economics has seldom been more relevant as businesses face an ever changing landscape, not only in Scotland but further afield. Our partnership with the Fraser of Allander will help us to access regular, factual and independent analysis of Scotland’s economy, enabling us to advise Scotland’s business community about the actions they need to consider in uncertain times.
September’s Commentary demonstrates that Scotland has shown resilience in the first half of 2017 despite ongoing political and economic uncertainty. However, this upturn must be considered in the context of the last two years, which saw less favourable conditions. Nevertheless growth is forecast for 2018 (1.4%) and, in the latest Commentary, the 2019 forecast has been revised upwards to 1.7%. While there are challenges facing our economy, these forecasts recognise it’s potential.
At the heart of this potential is Scotland’s rich history of innovation, and its ability to adapt, change, invent and re-invent. Innovation is a word which is often heard these days, and there are countless examples of where genuine innovation has already played an important role in the development of our most economically important sectors. It should also help raise productivity, which is vital to our long term economic success.
We’ve seen it in financial services, as the sector moves further towards the adoption of technology in its practices. Fintech has the potential to completely transform the Scottish financial landscape, with Edinburgh acting as a UK and worldwide hub. We’ve seen many of these businesses first-hand in our own Digital Studio, where we’re working to help companies of all sizes make better use of digital technologies, turning their innovations into commercial reality.
In energy and resources, centres such as the Oil and Gas Technology Centre (OGTC) have emerged to promote innovation within the industry. The OGTC is focused on developing new technologies which will play an important role in maximising economic recovery from the UK continental shelf, while anchoring the supply chain in the North East of Scotland.
It’s also instilled in family businesses, which have made innovation part of their culture. As highlighted in the recent Scottish Family Business Top 100 report, they’re part of the engine room of the Scottish economy, contributing significantly to employment, economic output and to the communities in which they find themselves.
Increasing the awareness of how people and businesses can play an important role in contributing to Scotland, not just economically, but culturally, is also vital. Our One Million Futures campaign is an example of this in practice. The five-year, UK-wide initiative will see Deloitte work with 54 charities, schools, and social enterprises to help improve the lives of one million people, breaking down barriers to education and employment.
Scotland remains an attractive place to do business, and it is, without question, still an economically rich nation. We need to continue to foster an environment which allows companies to grow, innovate and enter new markets, ensuring Scotland remains a key location for international investment.
The months ahead will see economic policy in Scotland being debated, and it’s important that this discussion isn’t just held within the walls of government and parliament. The participation of the business community in this debate is absolutely critical. As the lifeblood of the Scottish economy, businesses have a pivotal job to do in Scotland’s resurgence.