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The Transform our Economy Group is a collaboration between Friends of the Earth Scotland, Scottish Environment LINK’s Economics Group, the Wellbeing Economy Alliance Scotland and Prof Camilla Toulmin. Together we’ve analysed Scotland’s recent National Strategy for Economic Transformation.

Read our full analysis here.

With climate change impacts being felt around the world and rising prices pushing more and more people into poverty, the need to redesign our economy to serve people and planet has never been clearer. 

Last year the Transform our Economy Alliance published 10 points that set how an economic strategy for Scotland can start to deliver wellbeing for all within environmental limits. 

Those 10 points were endorsed by 42 academic experts and organisations such as Poverty Alliance and Scottish Women’s Budget Group.

So how does ‘Delivering Economic Prosperity’, the Scottish Government’s National Strategy for Economic Transformation stack up against the 10 points? 

We conclude that the strategy has made partial progress against four of the ten points, but has not fully met any of them. You can read our detailed assessment here. This lack of progress is deeply disappointing, given the importance of the strategy for setting the direction of Scotland’s society, environment, and economy over the next 10 years. 

The disconnect between the priorities and ambition of the strategy and the scale of the challenges facing Scotland stems from a lack of an inclusive and wide-ranging participatory process for determining the strategy’s priorities. We hope that the delivery plans will be developed through a more inclusive process that can help to align the strategy more closely with the needs of people and planet. 

“The purpose of business is to “find profitable solutions to the problems of people and planet, not to profit from creating problems for either.”

Now is the Time for Purpose, Report of the Scottish Business Purpose Commission

We welcome the first report of the Scottish Business Purpose Commission – a joint initiative of SCDI and the Scottish Government – as an important step in the right direction. Businesses have a vital role to play in creating a Wellbeing Economy that is designed to deliver for everyone’s needs, and protect the health of our planet. But they can only do so if they put the purpose of serving their employees, communities, customers and natural environment at the heart of their business purpose, rather than focusing on short-term returns for shareholders. As the commission says, we need businesses in Scotland to be part of the solution, not part of the problem. 

It is time for businesses in Scotland to show real leadership in moving away from outdated business models and support an economy that works for people and planet. No matter where they are on this journey, all businesses must consider this, whether it is defining and communicating their purpose for the first time, developing comprehensive measures of their impacts on society and planet, or reforming their governance and ownership structures to give a stronger voice to employees, communities and the natural environment. 

The commission shows that Scotland is already full of inspiring examples of purposeful businesses and the key to success is to share the learning and experience from those examples. 

But the commission is also clear that conscientious businesses cannot do this by themselves. Purposeful businesses are not mainstream yet and our economy is still set up to favour those businesses that profit from creating, rather than solving, problems for people and planet. That set up is reflected in the competitive disadvantages, lack of support and limited access to investment for businesses that want to do the right thing. 

Governments at all levels need to step up to create the architecture that ensures that the right thing to do for people and planet becomes the right thing to do for business.

The recommendations by the commission represent an important step in that direction and we call on businesses, the UK Government, the Scottish Government and local governments to implement the recommendations of the commission in full. Governments need to support businesses on their journey by:

  1. Mainstreaming business purpose in business education 
  2. Incorporating purpose into all forms of government support for the private sector
  3. Building a favourable tax system for purposeful businesses.

But that can only succeed if there is a clear and shared understanding of what “business purpose” means in practice, what counts as contributing to the solutions that we need and what counts as profiting from the problems. This cannot be left to businesses to decide all by themselves, and the commission’s report offers little clarity. We need the UK and Scottish Governments to set a strong direction for businesses and to develop a coherent framework for measuring whether Scotland’s businesses are moving in that direction. We need effective ways of holding businesses accountable and prevent purpose-washing. Not all businesses take their responsibility for people and planet seriously as shown by recent examples (e.g P&O ferry, energy company profiteering from the cost of living crises and lobbying against climate change rules). 

To set that direction, we need a wider national discussion to create a shared understanding of the kind of businesses that can contribute to building a Wellbeing Economy and which ones cannot. This process needs to be led by governments but be inclusive and make sure that those with the least power in our current economy are heard. 

WEAll Scotland response to the Programme for Government in Scotland
Lukas Hardt and Katherine Trebeck; 28 September 2020

Earlier this month, the Scottish government published its Programme for Government, setting out its plans until the election for the Scottish parliament next year and explicitly committing to building a wellbeing economy in Scotland; an economy that is “fairer, greener, more prosperous”.

We welcome that commitment. And lot of the measures go in a promising direction.

For example, the government recognises that rebuilding the economy after COVID needs to simultaneously contribute to climate change mitigation and other environmental goals. The promised investment in energy efficient buildings, green sectors, tree planting and peatland restoration is important and to be welcomed, even if it still falls short of the scale necessary.

There are nods to the importance of social enterprises, community wealth building and the 20-minute neighbourhood. Some money is provided for cycling infrastructure. The emerging Scottish National Investment Bank could be used to provide the long-term investment we need for a just and green transition. The Youth Guarantee could be a great way to provide meaningful, well-paid job opportunities (although it could also become another way to subsidise poverty wages). Adopting the UN Convention on the Rights of the Child into Scots law gives society real power to hold the government to account.

But, despite the promising direction, the Programme for Government doesn’t live up to the ambition of a wellbeing economy. Building a wellbeing economy is about transforming our economic system so that it delivers social justice on a healthy planet, the first time round. That last phrase is important, because the Programme for Government, and much of our social policy debate in Scotland, is still too much about cleaning up and redistributing after the fact.

What do we mean by that? Our current socio-economic model is failing because it tries to deliver good lives, but does so by taking the long way round. The approach can be described in three steps1:

  1. Get the economy to grow bigger, but don’t fret too much about the damage to people or the environment that this does.
  2. Second, sequester a chunk out of this economy via taxes.
  3. Third, channel some of this money into helping people and the planet to cope with step number 1.

The limits of this approach are clear – it implicitly concedes to damage and harm being done to people and planet by stage 1; such damage is now so great that actions in Step 3 cannot keep up, so people and planet are inadequately repaired; and in a world of finite resources and ever-more apparent limits to growth, the risks of step 1 are mounting.

Unfortunately, the main thrust of the Programme for Government seems largely confined to such a model. Step 1 policies include the £100 million “Green Jobs Fund” or the “Inward Investment Plan” aimed to boost GDP. Yes, the government is now putting a strong green slant on such policies, which is good, but fundamentally such policies are still about stimulating more growth within the current system. That won’t work.

On the other end, the government needs to spend heavily on Step 3 policies to patch up social inequalities and environmental damage.

Consider the high-profile announcement of a Scottish Child Payment and Child Winter Heating Assistance; or the Tenant’s Hardship Loan facility, which will help tenants, but is only shifting their debt from landlords to the government; or the £150 million of additional funding quietly earmarked for additional flood protection measures (and, while you’re at it, compare the latter amount to the Green Jobs Fund – telling isn’t it?). Such policies are good and important if we are to take care of people in the face of an economic system that generates inequality, financial insecurity and poverty and climate chaos.

But the real tragedy is that they are necessary in the first place.

Heralding redistribution as progress and patting ourselves on the back for helping people survive and cope with the current system is a sad reflection of how low our ambitions are.

A wellbeing economy is about attending to root causes – looking upstream. Designing the nature and configuration of the economy so it enables people to live good lives first time around rather than allowing so much damage to be done – often in some outdated and misguided pursuit of growth – and then thinking we’ve done well when we patch up that damage. A wellbeing economy agenda asks more of the economy. It starts from the premise we can no longer be content to patch and heal and repair – we need to construct the economic system in a way that delivers social justice on a healthy planet. From the outset.

Building a wellbeing economy requires changing the rules of the game and redesigning our institutions, our infrastructure and our laws. It means embracing the potential of pre-distribution rather than re-distribution and measuring our progress in a way that is better aligned with what is really needed. We already have lots of ideas on how to do this.

Some of what is needed is already being done in Scotland – just too tentatively. Take support for alternative business models that put people and planet before profits, such as worker-owned cooperatives or social enterprises. There are good steps towards community wealth building to keep wealth in the place where it is created and reform of land ownership rules (and that of other assets). The National Performance Framework is starting to broaden goals away from simply GDP growth – but hasn’t yet knocked GDP off its ill-deserved pedestal.

While the Scottish government’s powers are limited, it could use planning and procurement and business support much more proactively to cultivate the sort of business activities required for a wellbeing economy. Radical transformative action can be done in small steps. It is time that it takes its own rhetoric on the wellbeing economy seriously and initiates transformative change.


[1]Trebeck, K., and Williams, J., 2019. The economics of arrival: Ideas for a grown up economy. Policy Press, Bristol, p. 86