Rugby, haircare and the Enterprise and Skills Agencies Review
8 February 2017
Unless I was dreaming, what I saw at Murrayfield last Saturday provided evidence that Scotland can change for the better – can become more efficient, more co-ordinated and more competitive; and hence achieve better outcomes. What makes sense for our rugby team should make sense for our economy as well. Scotland can achieve greater productivity, stronger growth and enhanced welfare across our economy.
Vern Cotter and the Enterprise and Skills Agencies Review
Vern Cotter has brought to Scottish rugby a clear strategy AND developed a team capable of implementing that strategy; of working coherently together and hence achieving success. For our economy the desired outcome of the continuing review of our enterprise and skills agencies (see Mike Foulis' "The rules of haircare") should be the strategic context and the ‘team’ the relevant agencies working effectively together, within that agreed strategic context, to the advantage of the nation as a whole.
I am not sure that I have the strength of will to carry this analogy much further – and am also aware that next Sunday in Paris all could change once more! So let me turn to what I seek from the review.
The key is establishing a clear and effective link between those who determine the evolving strategy (the new Scotland-wide statutory board) and those who implement the activities related to enterprise and skills which are intended to support the achievement of the strategy’s ends. This has to involve a strong two-way process. Those in the agencies have to think carefully about the desired outcomes at the macro level and debate with those charged at the strategic end what policies and programmes should be deployed. Those working on the strategy have to listen to those at the sharper end, and adjust their thinking to learn from the latter’s experience and expertise.
A six-month enquiry on ‘increasing productivity in Scotland‘
Personally I would kick the whole new approach off with a concentrated 6 month examination of how Scotland can achieve greater productivity and hence stronger growth and enhanced welfare. I am told Scotland’s productivity rose by 4.4% in the past decade – stronger than the UK. But 4.4% in a decade is still an appalling performance record as compared to (a) what was achieved pre-2008 and (b) what our key external competitors have continued to achieve. The target should be productivity growth of 2% per annum rather than less than one half of one per cent.
We know the questions only too well. What can be done to encourage greater business investment? How to enhance the productive use of innovative ideas and capabilities? What skills are needed for the years ahead and how best are these developed? How to make Scottish companies more ambitious and more outward-looking? What can be done to enhance the creativity and flexibility of management, so best use is made of all talents?
Bringing together the best and best informed minds from business, the enterprise and skills agencies, Government, the unions and the economics profession for a short burst of creative thinking must be a means of adding value. None of my questions are new. Many of the right answers are already known. We need the right agenda, the right agencies to implement and the right means of co-ordinating while allowing the sharp-enders to get on with the key tasks.
Nationally consistent AND regionally responsive
Mike Foulis has questioned whether we can be ‘simultaneously … more nationally consistent and less nationally consistent’ as he takes to be implied by the review’s first stage report. I would suggest that what does make sense is to have a coherent national approach, but to allow for differences in implementation at local levels, because circumstances differ.
I do fear we may risk a form of ‘balkanisation’ of our enterprise following creation of a South of Scotland agency alongside SE and HIE, with separately run City Deals for each Scottish city. That is a risk unless the new over-arching board ensures that the agreed strategic approach is the template within which each agency works – but with account taken of local conditions, local strengths and weaknesses. That is the inter-action I would seek between strategic thinkers and local achievers, but with clear authority vested at the statutory board level. That is how we square Mr Foulis’s circle.
Use what we have, retain what we’ve got and share resources effectively
Within this context my strong preference would be for what is now SDI (Scottish Development International) to remain a part of Scottish Enterprise. Many companies in Scotland gain from input from SE and SDI as part of one coherent whole. To split off SDI would mean yet another agency and yet one further risk of lack of co-ordination and loss of synergistic benefits. To an extent the same applies to the concept of a separate agency for the South of Scotland. That risk can be managed by ensuring that the agency for the south is based there, with dedicated resources and a growing understanding of what makes sense to encourage enterprise there, BUT with key specialist inputs being made available on some inter-agency basis by SE and SDI. Diseconomies of scale and scope must be minimised.
Not just one over-arching Board; we need strong agency Boards to oversee implementation
One final thought is that the establishment of one over-arching statutory board should not mean that each individual agency is left in some sort of board-free limbo, answerable only to a distant statutory board which will be busy focussing on its priorities of establishing and reviewing economic strategy and overseeing its effective implementation. Each agency will need a strong board to work with its Chief Executive and oversee performance and delivery of key programmes. That board should also help to provide the guidance up to the statutory board that must be a key part of the two-way flow of views based on positive and negative experience.
Strong central oversight and free-thinking agencies
In sum, post review we can have both strong central oversight and free-thinking agencies to implement. But the key will be establishing the full strategy – preferably after the proposed intensive review of drivers of productivity – and then working to achieve the best delivery by all involved. Resources will remain scarce but there must be scope for real improvements in our economic performance. Then perhaps we can win at least the economic 4 nations.
Tags: Jeremy Peat
 I should note that possible conflicts of interest. I was a board member of Scottish Enterprise from 2010-2016 and chair of SE’s Economic Policy Committee; and also Vice Chair of the (then) Scottish Higher Education Funding Council from c.1999-2005. Both SE and SFC (the successor body to SHEFC) are key elements of the review I discuss in this blog.
 Our key competitors have produced by Thursday lunchtime what it takes us a full working week to produce.