Kate Forbes's 10-year economic strategy: Here's what is at its heart

There were immediate responses on social media, some of them a little exercised by the paucity of mentions of independence in the strategy. It is difficult to read much into that fact. In thinking about economic development, it barely matters whether Scotland is independent.

True, the government of an independent Scotland would have many additional powers which have been denied to the devolved administration. It will be much easier for Scotland to develop an industrial policy after independence. The planning to achieve the government’s ambitious net zero targets would also become much easier.

READ MORE: New Scottish independence polling puts Yes and No neck and neck

But choosing independence is primarily a political decision, and no economic strategy can justify it. The many political choices made in framing this economic strategy do not really involve the constitutional question, although the Scottish Government may have made some of those choices by thinking about how to build broad support for independence. Proposing large-scale changes in economic management, which would substantially extend the Scottish Government’s role, would be popular with some of the critics of the strategy but might well seem risky in that broader context.

No doubt the ministers overseeing the development of the strategy would receive that advice from the civil servants working on it. Remember that, ultimately, ministers decide. This strategy sets out what Kate Forbes, and Ivan McKee, believe will work well for Scotland in the next 10 years, starting from where we are now.

REAd MORE: First Minister Nicola Sturgeon defends Kate Forbes's economic strategy against critics

That is why the strategy is focused on the creation of new businesses, well-paid, highly productive jobs and reduced regional inequalities in income, wealth and opportunity, with many of the changes being supported through an openness to trade and investment. It is what ministers want.

The ministers have accepted many well-understood ideas about economic growth, concentrating on expanding the productive capacity of the economy rather than managing specific activities. So, there is no place for a national energy company in the strategy.

Instead, it concentrates on the role of the tradable sector in enabling economic transformation. The tradable sector includes manufacturing, but also services which can be provided across national boundaries.

In Scotland, banking and asset management are prominent among these services. We also include the oil and gas sector, and, of course, whisky production. While these are well-known areas of strengths of the Scottish economy, the strategy is motivated by concern that they are too few, so that the tradable sector is not large enough for Scotland to prosper. The strategy is therefore focused on managing the expansion of activity in this sector.

Sturgeon defended Kate Forbes's strategy earlier this month

We expect the tradable sector to be more productive than the non-traded sectors of the economy. Facing competition from around the world, it consists of businesses which tend to be more innovative, more capital intensive, employ highly skilled workers, and pay higher salaries than other businesses.

Looking around the world at countries which have been successful in recent years, it is easy to see why any government might conclude that there should be a large tradable sector. That desire has led to the emphasis on inward investment, entrepreneurship and new business formation in the strategy.

But what of growth? It is fashionable just now to talk about a post-growth society, and a circular economy. It may be that it is possible economic and social development will take a new path – but a post-growth society would be a substantial break from the experience of countries around the world in the last 200 years.

It is perhaps important to remember that we do not want economic growth and higher consumption because these are good in themselves. Scotland is a relatively wealthy country, with many organisations which contribute to societal wellbeing. That is not just another way of describing business success. Think of our education sector, which may have a critical role to play in fostering economic development, but whose primary role must be about enabling (young) people to discover who they are.

In the ongoing pandemic, we cannot forget that we are almost all reliant upon the National Health Service. It is not a business-led sector, but it is a substantial part of both the economy and society.

READ MORE: Kate Forbes and Mark Carney to join task force making Scotland a 'leading hub' for green finance

Our lives are enriched by our creative industries. Scotland’s many social organisations are integral to the fabric of the emerging wellbeing economy. Lastly, there is government, whose activities pervade all our lives.

It really does not matter that there is very little in the strategy going beyond conventional, rather than fashionable thinking, at least in European terms. This is a strategy for supporting the emergence of a new economy as inevitable changes take place. The ambitions underpinning the strategy are honourable.

Of course, as we have seen in the six years since the EU referendum, strategies have to be written assuming that there will be a reasonably stable environment– or else by anticipating the nature of change.

War in Ukraine and the isolation of Russia are going to have a more profound impact on the economic structure of European economies than anything that the Scottish Government can do. There is much more need of a green, circular economy than there was two weeks ago.