Download the report

A Mission-Oriented Industrial Strategy for Scotland: Framing Paper | policy report no. 2024/10.

Authors:

• Mariana Mazzucato : Founding Director and Professor in the Economics of Innovation and Public Value | UCL Institute for Innovation and Public Purpose (IIPP)
• Laurie Macfarlane : Co-Director | Future Economy Scotland / Policy Fellow | UCL Institute for Innovation and Public Purpose

Summary:

The research, jointly published by the UCL Institute for Innovation and Public Purpose (IIPP) and Future Economy Scotland, assesses the key challenges Scotland’s economy faces, and sets out a roadmap for an ambitious industrial strategy that aligns social and environmental priorities with economic goals.

While Scotland’s economy has many strengths, we find that a chronic problem of low investment has undermined living standards, productivity growth, and innovation. Meanwhile, the huge economic opportunities associated with Scotland’s net zero transition have been hampered by a weak industrial base and a lack of investment.

As other countries across the world implement ambitious industrial strategies, Scotland cannot afford to rely on “reheating old orthodoxies”. Instead, the report calls on the Scottish Government to embrace a ‘mission-oriented’ approach to industrial strategy – replacing traditional, sector-focused strategies with cross-sectoral ‘missions’ that address major societal challenges. The focus of Scotland’s new industrial strategy should be on “system-wide transformation”, rather than supporting a small number of sectors.

The report recommends that the Scottish Government:

• Moves away from acting simply as ‘lender of last resort’ bailing out struggling firms, and instead embraces an ‘investor of first resort’ role – investing proactively to nurture new technological and industrial landscapes
• Promotes greater coordination between policies such as procurement, subsidies and innovation funding, as well as institutions such as Scottish Enterprise and the Scottish National Investment Bank
• Creates a new ‘social contract’ between government and business by attaching conditions on private sector access to state funding, and taking equity stakes in major projects
• Strengthens capabilities within Scotland’s public sector to reduce reliance on private consultancy firms
• Creates new governance models to break government silos and drive a mission-oriented industrial strategy across the Scottish Government

The framework also features a cross-cutting focus on skills, infrastructure and the foundational economy, with Scotland’s Fair Work agenda being embedded throughout – including meaningful input from trade unions, impacted communities and business.

Reference:

Mazzucato, M., Macfarlane, L. (2024). A Mission-Oriented Industrial Strategy for Scotland: Framing Paper. UCL Institute for Innovation and Public Purpose. IIPP Policy Report No.10. Available at: https://www.ucl.ac.uk/bartlett/public-purpose/policy-report-2024-10.