The Scottish Government has a target for Scotland to be in the top quartile of OECD countries for productivity.
For an advanced economy like Scotland, increasing productivity is generally considered to be the most sustainable way of improving living standards in the long term. In recent years, Scottish productivity has been catching up with that in the UK.
But even then, based upon the latest data, Scottish productivity remains over 20% below the top quartile of OECD countries. So how can productivity be improved and what is the role of skills and education?
In this note, we discuss these issues and use the Scottish Policy Foundation’s model to highlight some of the trade-offs that can arise when seeking to boost levels of productivity through investment in education and skills. The Scottish Policy Foundation is keen to support proposals that come forward with new policy ideas to boost Scotland’s skills base and contribute to faster productivity growth over the long-run.