Industry, Policy, and the Scottish Economy

Industry, Policy, and the Scottish Economy

Industry, Policy, and the Scottish Economy

Industry, Policy, and the Scottish Economy

Excerpt

Like most Western economies, the Scottish economy has undergone radical structural change during the last thirty years. It has also suffered severe dislocation as a result of various external shocks, most notably the rise in the price of oil in 1973. Such shocks have tended to strengthen the momentum of structural adjustment. Indeed, the process of change may accelerate in the future as the developing nations, particularly the newly industrialised countries (NICs), force a fundamental shift in the inter national division of labour. It can no longer be assumed that a select group of Western countries will continue to dominate the production of manufactured goods. Scotland has been a member of this group, though its role has tended to decline. Once pre-eminent in steelmaking and ship- building, manufacturing production in Scotland now accounts for only 0.7 per cent of total OECD production. Scotland is thus a peripheral member of a group of industrialised countries whose comparative advantage in the production of manufactures has been considerably eroded. The restoration of this comparative advantage through the discovery of new directions for Scottish enterprise is the fundamental problem to which industrial policy in Scotland should be addressed.

This chapter is not concerned with the formulation of such policy, however. Subsequent chapters will deal with policy in some considerable detail. Rather, it is here intended to describe and analyse some of the major changes in Scotland's industrial performance which have taken place in the recent past and to project these tentatively into the future. This chapter should thus be seen as providing a backdrop to the more detailed discussion of industrial policy which will follow.

There are two main sections in the chapter, one concerned with assessing past trends, the other with making projections. In the initial part of the first section a brief summary of the symptoms of Scotland's industrial decline is set out. This discussion begins with a consideration of general indicators of welfare and economic performance. This is followed by a description of trends in international trade which have contributed to the current state of the Scottish economy. Another major influence on Scotland's recent economic history is the shift in emphasis away from the . . .

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