surf conference : the future for communities what could be the economic factors we need to be aware...
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SURF Conference : The Future for SURF Conference : The Future for CommunitiesCommunities
What could be the economic factors we What could be the economic factors we
need to be aware of ?need to be aware of ?
Ewan Mearns
Scottish Enterprise
The story so far ...
What kind of economy has been sustaining Scotland’s communities in the recent past ?
Changing Economic Structure
1950’s25 Shipyards
113 Coal mines
6 Steel works
0% world’s oil
Employment:
35% manufacturing
45% services
6% business services
2000’s 4 Shipyards
0 Coal mines
0 Steel works
3% of world’s oil
40% of EU’s PCs
Employment
15% manufacturing
75% services
21% business services
0
250,000
500,000
750,000
1,000,000
1,250,000
1,500,000
1,750,000
2,000,00019
82
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
Manufacturing and Service Sector Employment
Services
Manufacturing
Where do we work? % breakdown of jobs
0 5 10 15 20 25 30
Agriculture
Electronics
Financial Services
Transport/Comms
Other Services
Construction
Hotel & Catering
Manufact. (ex. Elect)
Business Services
Retail & Wholesale
Public Services
%
90
100
110
120130
140
150
160
1701
97
5
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
SCOTLAND UK
Growth in GDP (1975=100)
20%
ILO Unemployment Rates Scotland and Great Britain
3
4
5
6
7
8
9
May
-92
May
-93
May
-94
May
-95
May
-96
May
-97
May
-98
May
-99
May
-00
May
-01
%
Great Britain Scotland
A changing (but under-performing) economy ...
Relative transition from a traditional manufacturing to a service and knowledge-based economy
importance of foreign investors to manufacturing employment and productivity
Scottish GDP growth and productivity lagging behind UK (and competitors) … and gap widening
declining unemployment during 1990s
… but with encouraging signs of future growth
the emergence of new sectors of economic activity strong growth in service-sector jobs commercialisation of academic knowledge more young people entering FE/HE more recently, a stable macro-economic environment
New jobs and activities
Financial services Scotland 6th largest equity centre in Europe
Biotechnology home to 20% of UK biotech companies, employing 24,000
Optoelectronics employs 5,000 people, 60% output exported
Creative industries digital media, games, Edinburgh Festival injects £120m annually
0 1 2 3 4
Manu (ex. Elect)
Public Services
GDP
Electronics
Retail/Wholesale
Chemicals
Hotel/Catering
Construction
Other Services
Business Services
Financial Services
Growth in Scotland by Sector 2002-2006 (GDP %)
More people entering FE/HE
0100,000200,000300,000400,000500,000600,000700,000
1981/82 1985/86 1989/90 1993/94 1997/98
Total
HE
FE
The changing nature of ‘value’ in the economy
Increasing importance of ‘intangibles’ in creating value: software, services (with products), speed, ideas/creativity,
brands/trust, experience etc.
New ways of doing business mass customisation eg Dell, Dulux knowledge management eg Skandia innovative business models eg Egg, e-Bay, Dyson brands and values eg Intel, Nike experience eg Disney
A more global, networked economy
differential cost of labour the end of the ‘assembly plant’ era in Scotland
much closer ties between national economies vulnerability to economic shocks
a smaller, ‘connected’ world agglomeration effects
More demanding and prosperous consumers
Household income and expenditure
05
101520253035
1968 1978 1988 1998
%
0
20
40
60
80
100
120
Food & Fuel Leisure Real income (right axis)
Source: ONS
From mass production to mass customisation
People, skills and talent
Importance of ‘know how’ vs ‘know what’ in the knowledge-based economy
Future skills trends core skills : basic skills; communication skills; problem-solving,
planning and teamwork; IT skills occupations : managers; public sector professionals; elementary
caring and service occupations
Talent as key; diversity as driver
It’s not the strongest of the species that survive, nor the most intelligent but the ones most responsive to change
Charles Darwin
The rise of the creative class
Richard Florida says: innovation flourishes in places that attract creative people, places with the following attributes :
critical mass of cultural and natural assets open attitude to new and unconventional ideas and people cultural eco-system - many forms of creativity take root and flourish attract new and different kinds of people make rapid transmission of knowledge & ideas easy have low barriers to entry – economic, social, civic
creativity drives innovation
innovation is the key to sustained economic growth
'Prime' Working Age Population (20-34 years), 2000 to 2010
900
920
940
960
980
1,000
1,020
1,040
1,060
1,080
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
Year
Thousands
Scotland's Puture Population of Pensionable Age (% of total population)
16
17
18
19
20
21
22
2000 2001 2006 2011 2016 2021 2025
Foster a supportive environment for enterprise
more new and growing small businesses host to new/emerging activities eg social enterprise, digital
media more diversified local economies exploiting academic knowledge no low-tech industries, only low-tech companies new sources of value … not just high-tech importance of global connectivity