Building a new economic model for Scotland 

Posted: 09 December 2022, in Blog

The state of the economy is of practical importance to all of us, including Scotland’s social entrepreneurs.

Indeed social enterprises are already attempting to build a better, more sustainable, economic model, as part of an emerging, wider movement. 

This “wellbeing economy” approach should be of interest to everyone, as it’s about supporting locally owned businesses, fairer working lives and a strong natural environment. 

The Scottish Government recently published proposals for the economy of an independent Scotland. 

Building a new Scotland: A stronger economy with independence is the third publication in the Building a New Scotland series which aims to “give people the information they need before an independence referendum takes place”. 

While Social Enterprise Scotland is politically neutral, including on the question of Scotland’s constitutional status, it’s certainly interesting to explore the types of better economic models that we might build. 

The current SNP government has long held the view that Scotland could become more like a Scandinavian style model in terms of our economy. 

The paper pledges to “build an inclusive, fair, wellbeing economy that works for everyone in Scotland”, where “greater prosperity and greater fairness” complement each other. 

This includes proposals for cheaper, more secure energy for households, workplace rights, European citizenship and energy efficient homes. 

There are a lot of commitments around increased trade, exports, investment, better productivity and infrastructure investment. 

There’s also a statement about a “partnership approach between business, unions, government, and others at the heart of economic policy-making”, that we would expect to include the social enterprise community and the third sector. 

A rejection of the UK economic model, branded as “low growth and low productivity, stagnant wages, and high inequality” is in there, alongside a rejection of trickle-down economics. 

An emphasis on Scotland’s successful industries is mentioned, such as renewable energy, food and drink, digital technology, finance, life sciences and a skilled and educated workforce. 

The policy paper states that: “The 21st century economy will require structural shifts of a scale that only government can shape…This new economic thinking informs both the Scottish Government’s commitment to a Wellbeing Economy and the proposals in this publication.” 

Certainly, as mentioned, the wellbeing economy approach is a natural fit for social enterprises, as they are already building this inclusive and democratic approach in local communities. 

There are commitments to a green, circular economy, as well as a new “Building a New Scotland Fund” of up to £20 billion, a one-off spending on infrastructure projects. It would use oil and gas revenues for the first decade for a transition to net zero and environmental sustainability, inclusive growth and building resilient and sustainable places. 

In terms of fair work there’s a commitment to a single minimum wage, with age restrictions removed, and an interesting point about business models, where Scotland would “benefit from reformed models of corporate governance that evidence shows improve profitability”. 

In addition, there are commitments to look at trade union reform, enforcement of workplace standards, the gender pay gap and holiday pay, among other significant measures like embedding social purpose in every business and worker representatives on company boards. 

There are strong commitments to supporting more co-operatives and worker buyouts of companies that are up for sale or under threat plus community ownership in renewable energy, including community co-operatives. 

The paper is a good starting point for debate about Scotland’s future economy under independence, if and when that happens. However, we do also need to urgently look at what more we might achieve right here and right now, with existing powers.  

For example, the role of Co-operative Development Scotland is currently being looked at, as well as government commitments to see how we might increase the number of social enterprises. There is also far much more that can be done around land and procurement reform. 

Scotland’s constitutional future is a debate that will continue, as The Scottish Government seeks to hold an independence referendum in the near future.  

Certainly, Scotland’s social entrepreneurs hold different views about the union or independence or indeed any further devolution of powers. Social Enterprise Scotland will continue to allow our members to get their voices heard in the debate. 

Whatever decisions are made, we strongly believe that social enterprises have a key role to play in developing a genuine wellbeing economy, where people and planet are the priority.  

This means using practical approaches like Community Wealth Building, with a longer-term aim to truly embed democracy in our economy. 

Duncan Thorp, Policy and Public Affairs Manager, Social Enterprise Scotland