Two Stories that reveal Scotland’s lack of strategy and vision

by | 17 Jul 2023

Both Ian Blackford's independent economy paper and the proposal for an energy interconnect to Norway display Scotland's apparent inability to think strategically - or demonstrate vision

I had been going to do a quick review of Ian Blackford’s new ‘economic plan for independence’ on Friday but honestly, there wasn’t enough there from which to fill a whole article. What I shall do instead is to combine it with another story from last week and try to draw out the common theme – Scotland lacks serious thinking or joined-up strategy.

But let’s start with the Blackford paper, produced with a former senior civil servant who is now in the corporate sector and an academic from a London university. Or let’s do that if you can find it, because it took me a little while.

This isn’t an SNP paper – it isn’t on the SNP website, the SNP didn’t put out a media release about it and there is no SNP logo on it anywhere. I had to get someone to send it to me. This may be me being dense, but I think the first thing this tells us is that the SNP has transitioned from being a centrally-controlled dictatorship to a sort of random network of freelancers.

As usual I skipped the Foreword and only browsed the appendices. This left only four pages of text to read – and half of that was platitudes. What is contained in it, if you boil it down to actions, is only really three things. First, a vague call for better collaboration in the energy sector. Second, a proposal for university spin-outs and clusters. And third, a new economic strategy committee. And that really is it.

Here’s the thing; I’m struggling to find any content in two of the three proposals and the third doesn’t seem credible to me. ‘More collaboration in energy’ meaning what? That could mean, well, anything. As best I can see it is a way of saying ‘don’t force energy companies to base supply chains in Scotland, just ask them very nicely’. But there is no meaningful information there.

The one that really did catch my eye was the spin-out/cluster model. This is the argument that we can build a STEM-based knowledge economy by commercialising university research and that will attract clusters of other high-tech businesses to start up or relocate. The reason it caught my eye is that I was centrally involved in developing that strategy in Scotland first time round.

I had not long started as head of strategy for Scotland’s universities, universities had been put in the same portfolio as enterprise rather than education, and we needed a way to get politicians who were mainly interested in economic issues also interested in universities. Hence we developed a strategy based on university research spin-outs and some economic development cluster theory.

This was primarily a strategic lobbying move rather than an economic policy one. It was how we sold our funding bids, and for ten years we were remarkably successful, unlocking hundreds of millions of pounds of funding and mainstreaming cluster theory and the work of the economist Richard Florida and his theory of a ‘creative class’.

And that’s it, that’s Ian Blackford’s vision for an independent Scotland – 15 year old policy that didn’t really work back then and another rebranding of a committee

The problem is that this was in the years 1999-2007 and that was over 15 years ago, there has been widespread critique of cluster theory since (and that was before home working was the norm), and if it didn’t really work then, we’d need more than a rerun to make it work this time.

(It is notable that the Fresh Talent Initiative, another product of early devolution but also dead for for 15 years also gets a mention, also with a call for a reboot.)

The bit of this paper which does contain detail is – another committee. In fact it is basically a call for the third rebranding of the Council of Economic Advisers in four years. Scotland has had the thing this paper is calling for for a long time now. The ‘difference’ here is that it is supposed to ‘think strategically’ about ‘everything’, which isn’t really a difference.

And that’s it, that’s Ian Blackford’s vision for an independent Scotland – 15 year old policy that didn’t really work back then and another rebranding of a committee.

So let’s jump to the second story. Last week it was revealed that a proposed energy interconnector between Scotland and Norway was scrapped because Norway realised it was being designed to inflate its domestic energy prices. The business model for the interconnector was that it would enable energy producers in either country to sell to whichever country had higher prices.

Think of it in these terms; it is gaining efficiency through expanding the market, but it is expanding the market in customers, not suppliers. Basically it would enable energy suppliers to swap one nation’s worth of customers for another’s according to which nation’s customers were in a weaker position in the face of monopoly exploitation.

If markets in producers are supposed to bring prices down, markets in consumers are explicitly designed to push them up. That’s why Norway pulled out. And that’s what it is so sad and pitiful that Scotland was still desperate to sign up, so desperate for any press release about green energy and international collaboration that it nods anything through.

Thank god that project fell apart; the last thing Scotland needs is more capacity for us to be exploited by private energy monopolies. But why did no-one in Scotland realise the long-term implication of this and why were no questions raised about how it was or was not in our interests?

It seems to me that both of these stories show the same broad problem – Scotland has a real blind spot in looking properly at the assets it has and how they all link up and then assembling that information into a vision of something better than we have. Instead we grasp at anything that looks like something we once did before.

We get low-quality, 20-year-old thinking reheated in a ‘let them eat this’ kind of way

Scotland doesn’t need an energy interconnect with Norway – we have loads of energy and so do they. We need to develop energy storage and a Green Hydrogen industry. But we’re not really doing either (the Scottish Government’s hydrogen strategy is still about the oil industry achieving the mythical Carbon Capture and Storage so it can make hydrogen from natural gas).

And Scotland’s economy does indeed have a great asset in its universities, but its most high-profile spin-outs (so far) have all been bought up because there is no strategy for retaining them and no industrial strategy to link them to advanced manufacturing and so on. We get a good idea (a piece of academic research), help the academic turn it into a toatie wee start-up – and then one of the big boys buys it and we repeat with next to no national benefit.

Laissez Faire economics, the neoliberal idea that if you just set the right market conditions, the free market will achieve the best possible outcome all by itself, does not have the credibility it once did. The reason is that the free flow of money is not the same as the free flow of ideas or good thinking.

If you have a business that needs a product and another business makes that product, the first business will buy that product. But if no-one else is making that product, the business needs to make long-term investment into research and development to fill that gap – and that is the one thing financialised businesses don’t do given their short-term time horizons.

And what if there is a giant opportunity but there is no business that exists ready to grab the opportunity? What happens in a market of absence? Don’t tell me that a small start-up can get grant funding in Scotland and scale rapidly to take advantage of that opportunity because it should be true but it isn’t.

And what when we have major social or economic need which is not being met through market forces (basically 90 per cent of the Green agenda)? What then?

The answer is that you need an industrial strategy. I’ve been writing this over and over again but so long as Ian Blackford thinks that paper is an acceptable contribution to Scottish economic debate in 2023 and so long as the Scottish Government runs wildly at any media opportunity however dubious the proposal behind it, I’ll need to keep writing it.

You can’t break through from where Scotland is now to where it needs to be based on more of what we’re currently doing. Surely that should be plain to see for everyone. Even the person most sceptical about independence would surely agree that Scotland is rich with massively under-exploited assets? So how do we put need and opportunity together?

That question really shouldn’t be hard to answer – what you need is strategic thinking, vision and a little courage. But these all seem in short supply at the upper echelons of Scottish society. And so instead we get low-quality, 20-year-old thinking reheated in a ‘let them eat this’ kind of way. And we all suffer as a result.

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