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How productivity could deliver inclusive growth in Scotland

How productivity could deliver inclusive growth in Scotland

How productivity could deliver inclusive growth in Scotland

Rachel Statham and Russell Gunson

June 2019

IPPR Scotland is IPPR’s dedicated think tank for Scotland. We are cross-party, progressive, and neutral on the question of Scotland’s independence. IPPR Scotland is dedicated to supporting and improving public policy in Scotland, working tirelessly to achieve a progressive Scotland. IPPR, the Institute for Public Policy Research, is the UK’s leading progressive think tank. We are an independent charitable organisation with our main offices in London. IPPR North, IPPR’s dedicated think tank for the North of England, operates out of offices in Manchester and Newcastle, and IPPR Scotland is based in Edinburgh. IPPR’s purpose is to conduct and promote research into, and the education of the public in, the economic, social and political sciences, science and technology, the voluntary sector and social enterprise, public services, and industry and commerce.

Summary:

Across the UK, productivity rates have been close to flat since the financial crash in 2008, with a resultant stagnation in living standards and economic growth. How to restart productivity growth, and how to solve the ‘productivity puzzle’, has been foremost in policymakers’ minds at the UK level, and with devolution of new tax powers, a crucial policy objective in Scotland too. In 2015, the Scottish government refreshed its economic strategy, placing inclusive growth as a key aim at the centre of its strategy. Inclusive growth is the idea of delivering stronger economic growth that in and of itself narrows inequalities, rather than relying solely on government intervention to redistribute the proceeds of growth. Rather than being blind to the shape and direction of economic growth, inclusive growth is an attempt to shape growth to deliver the social outcomes we wish to see. Given the importance of productivity to the strength of the economy, it will be important to consider how productivity growth in Scotland could maximise our ability to reduce inequalities, boost tax.

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