Writing in Holyrood, Universities Scotland convener and prominent economist Professor Anton Muscatelli reveals that the body is planning a “major intervention in the economic debate in Scotland”. 

In light of the recent turmoil in Scotland’s financial sector, the professor argues that the country cannot depend on any one sector for growth.  It must invest in innovation and develop a knowledge-based economy capable of adapting to change, he says.    

“Scotland cannot bank on a single (or small number of) industries to generate economic growth. Any industry has the potential to go into rapid decline, and our industrial policy cannot be focused on particular sectors. It has to be focused on creating the right conditions for knowledge-based industries to develop and thrive,” Muscatelli writes.  

“Even if the financial sector recovers, unless Scotland develops a capacity to grow new industries, to replace old industries with new ones, then Scotland’s long-run economic prospects look gloomy. A capacity to innovate would allow Scotland to develop a greater resilience to economic shocks.” 

The universities body, which represents principals and is soon to form part of an advisory group to Scottish ministers, has decided to take the initiative on this issue.  It is bringing together some of Scotland’s top economists in a high-profile campaign to illustrate to the public the importance of investing in high-level skills and innovation.      

“This message is so important now that Universities Scotland is working to develop a major intervention in the economic debate in Scotland,” Muscatelli explains. 

“Bringing forward Keynesian-style construction projects can play an important part in softening the impact of the downturn but they will do nothing much to prepare us for recovery once the downturn is over.  So we are bringing together some of Scotland’s leading economists to explain why our economic future rests so heavily on investing in skills and innovation.” 

The national campaign will begin early next year with a series of private briefings to key decision makers such as senior politicians, media groups and business leaders.  It will then broaden out to target higher education stakeholders such as students’ unions and academics’ trade unions.    

In the current global order, Scotland cannot compete with emerging economies on labour costs so it must concentrate on the advantage it does have, which is in advanced skills and technology, according to the professor.  It can only win in “a race to the top, never in a race to the bottom”. 

“In the long run, any economist will tell you that advanced economies will be under pressure to produce higher-value products and industries to remain competitive.  But the long-run is happening now and we need to prepare.

“Universities Scotland wants to make a positive impact on economic policy in these tough times and that is why we are pulling people together to explain what our next steps should be. 

“The short version?  A knowledge-intensive economy can no longer be something we talk about while banking on the bankers.”