2020 will be a year of further debate over the future of the Scottish economy, as by the latest analysis from the Fraser of Allander Institute.
While the result of last week’s General Election has provided clarity on the UK’s political outlook, questions on Scotland’s constitutional future remain.
This comes at a time of ongoing weak economic performance. The latest analysis by the Institute shows that the UK economy stagnated over the three months to October, with low business investment remaining a key drag on growth.
Despite this, there are positive trends to acknowledge: unemployment levels remain at historic lows at 3.8% in the UK and 4% in Scotland, while earnings are rising given the tight labour market. Furthermore, during the election all political parties promised to significantly increase public investment and this should have a positive economic impact in the years ahead.
Looking to the future, it is crucial that Scotland’s businesses work in collaboration with educators and policymakers to ensure that people develop the skills that are vital in the face of advancing technology, AI and robotic capabilities. These were key takeaways from Deloitte’s Power Up survey issued in 20181, and are still relevant today, particularly when the opportunities afforded by the roll-out of 5G technology are considered.
By enabling every machine and tool to become connected, 5G will, for example, allow factories to go wireless, enabling the reinvention of processes and business models. These were the key trends identified in Deloitte’s most recent predictions for UK Technology, Media and Telecommunications2 in 2020. 5G will also allow new ways of working such as fast and reliable remote control that will make it possible to operate machinery from a safe or comfortable place. That could be tractors or drones on farms, diggers on remote construction sites, or inspection cameras along huge power lines. In a sparsely populated country like Scotland, there should be significant potential benefits.
Moving into 2020 we will be faced with many challenges. However with, a strong commitment to increase public spending and the Scottish economy continuing to show signs of resilience as it returns to growth, we should be in a better position to tackle some of the big issues. Businesses will need to prepare for exiting the EU at the end of the transition period on 31 December 2020. Looking further ahead, it will also be important that businesses collaborate with educators and policy makers, to create a coordinated approach to capitalise on potential opportunities, increase investment and support the creation of skilled jobs for all demographics working in Scotland.
Read the latest report here.