Knowledge Economy

Part of the debate – in the Scottish Parliament at 9:30 am on 23 March 2006.

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Photo of Jim Mather Jim Mather Scottish National Party 9:30, 23 March 2006

I make two points in response: first, we must work with what we have; and secondly, we must aspire to have something better. I am sure that anyone outside the Parliament would tell the minister that Scottish Enterprise could perform infinitely better than it does on its current trajectory. It seems to be not only making a poor contribution to economic growth but offering a poor role model.

Members should make no mistake: any attempt to create a knowledge economy without tax powers simply will not work, especially given that the starting point for Scotland is way off the pace. In 2001, the centre for advanced studies at Cardiff University produced a report on readiness for the knowledge economy, which showed that Aberdeen, where the oil industry is located, was in 14th place out of 145 UK cities and regions. That was the best that Scotland could do: Edinburgh was in 21st place; Glasgow, the former first city of the empire was in 54th place; Highland was in 128th place; my area was in 143rd place; Orkney—the constituency of the former Deputy First Minister and Minister for Enterprise and Lifelong Learning—was in 144th place; and the Western Isles were in 145th place.

More recently, the "World Knowledge Competitiveness Index 2005", which is produced by George Washington University, the University of Sheffield and Aston University showed that Scotland is still off the pace and is being overtaken. Scotland ranked 83rd out of 125 regions, whereas Sweden was in 8th position and Finland was in 20th position. Scotland has also suffered a dramatic fall in the rankings for Government expenditure on research and development, dropping from 44th place in 2004 to 82nd place in 2005.

It is obvious that we have much to learn. I am delighted that lessons are being learned from Finland and that stakeholders realise the importance of the Finnish model. However, given that we do not have tax powers, we must do more in the meantime. I am delighted that the Government will support the SNP amendment, because it relates to what W Edwards Deming, who turned round the Japanese economy, called "profound knowledge".

We cannot pick and mix. Even a commitment to perpetual improvement that will involve all stakeholders is nowhere near adequate if the strategy is peppered with major weaknesses such as the lack of an overarching, worthy aim—for example, to get more people of working age in Scotland into work—or the lack of statistical control, which is the crux of the matter. The evidence of Finland's huge success is statistical and the country has the capacity to demonstrate that its performance is consistent and predictable. For example, in Finland there is less than 5 per cent variation in student performance among schools, which is a remarkable achievement.

If we continue on the trajectory that the minister set out, there will be lower retention of talent, because the people whom we teach will go to work in other economies. That will lead to a lower retention of wealth.