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Scottish Business Monitor Q2 2023: Scottish Government’s Relationship with the Business Community

Earlier this month, we published our latest Scottish Business Monitor (SBM), produced in partnership
with Addleshaw Goddard, for Q2 2023.

The survey sampled 400 firms in July and August from across the Scottish economy.
As usual, we asked firms about how economic conditions are affecting them and their outlook
over the next year. However, against the backdrop of the Scottish Government’s ‘New Deal for
Business’, we felt that it was important to find out the business community’s current opinion on
their relationship with the Scottish Government. Therefore, we asked Scottish firms the following
three questions –

  • To what extent do you agree or disagree with the following statements?
    1. The Scottish Government understands the business environment in Scotland.
    2. The Scottish Government engages effectively with my sector if it is considering
      policies that may affect my business.
    3. If I wish, I know an effective route to influence Scottish Government policy if new
      announcements are likely to affect my business.

Only 9% of surveyed firms agreed or strongly agreed that the Scottish Government understands
the business environment in Scotland, compared to 64% of businesses that disagreed or strongly
disagreed, equating to a net balance1 of -55.

Additionally, 8% of businesses agreed or strongly agreed that the Scottish Government engages
effectively with their sector, with a net balance of -59. And finally, a slightly better, 19% of surveyed
firms agreed or strongly agreed that they know an effective route to influence Scottish Government
policy, with a net balance of -21.

Our analysis also finds that larger firms typically disagree more than smaller firms when it comes to
whether the Scottish Government understands the business environment in Scotland or engages
effectively with their sector. We also find that hospitality, other services, wholesale, and construction
are among those who disagree more with the first two questions.

Despite these latest results from our Scottish Business Monitor being disappointing for the Scottish
Government, they provide a baseline that allows for progress to be monitored. The Fraser of Allander
Institute will ask businesses these three questions once a year, providing the Scottish Government
and business community with an annual update on how the New Deal for Business is going.

Authors

Adam is an Economist Fellow at the FAI who works closely with FAI partners and specialises in business analysis. Adam's research typically involves an assessment of business strategies and policies on economic, societal and environmental impacts. Adam also leads the FAI's quarterly Scottish Business Monitor.

Find out more about Adam.

Mairi is the Director of the Fraser of Allander Institute. Previously, she was the Deputy Chief Executive of the Scottish Fiscal Commission and the Head of National Accounts at the Scottish Government and has over a decade of experience working in different areas of statistics and analysis.

Ciara is an Associate Economist at the Fraser of Allander Institute.

Part of Collection

The quarterly Fraser of Allander Scottish Business Monitor, in partnership with Addleshaw Goddard, provides a snapshot of activity and business sentiment in the Scottish economy.