Commonwealth Games Business Conference
22 July 2014
It’s a pleasure to be welcome you all to this Commonwealth Games Business Conference. The Scottish government is delighted to host this event, in partnership with the UK government.
Glasgow University is a fitting venue. Its 25,000 students include more than 800 from Commonwealth nations outside the UK. They’re among the 9,000 Commonwealth students at Scottish universities. We are delighted they have chosen to study in Scotland, just as we are delighted to welcome the delegates of this conference, and to greet athletes and spectators from around the world for these Glasgow Commonwealth Games.
This University is also part of a tradition of educational excellence which has deep roots in Scottish society. Glasgow was founded in 1451. By the end of the 16th century, Scotland had five universities at a time when the rest of these islands had two. Now, Glasgow is one of five Scottish universities in the world’s top 200 – that’s more, per head of population, than any other country on the planet.
Scotland wasn’t just a pioneer of university education. In the 16th and 17th centuries, we became the first society to introduce universal free school education.
There are two things about that. First, one of the things we’re proud of, in Scotland, is that we invented so many things. Our inventions include the condensed steam engine, the telephone, the fax machine, the television, the MRI scanner, penicillin – all the way through to Dolly the sheep, the world’s first cloned mammal!
An American historian, Arthur Herman, asserted that Scotland’s record of invention was such, that we actually invented the modern world. Of course we would be far too modest to make that claim ourselves – although that doesn’t stop us repeating it!
And the reason for that history of innovation is our first and most important invention – universal free education. Because we had more people who were able to invent – we produced more inventions.
That tradition continues. The University of Glasgow plays a lead role in the innovation centre we’ve established for stratified medicine at the Southern General Hospital, less than three miles from here,
The centre examines data on how patients with different genetic make-ups respond to different treatments. By helping to find remedies for chronic conditions - such as cancer, diabetes and cardiovascular illnesses – it is helping to tackle some of the world’s major health challenges.
Another of this city’s great universities, Strathclyde, is at the heart of IT-REZ, the city’s renewable energy technology zone. It’s one of the developments which has made Glasgow the pre-eminent centre for offshore wind research in Europe. While in Orkney, 300 miles to the north, more types of wave and tidal power devices are being tested, than in any other location in the world. James Watt’s steam engine helped to create the industrial age; now Scotland is looking to lead the world into the low carbon age.
Or you could look at our digital and creative industries. The Glasgow School of Art has worked with Historic Scotland to create the finest digital scanning technology in the world. They were invited to create digital records of Mount Rushmore, because the technology here in Scotland is better than anything in the USA. Although Scotland’s digital expertise may be better known around the world for other reasons – we are also the home of Grand Theft Auto!
But the second thing about our tradition of education – beyond the innovation it fosters - is that education is seen very clearly as a public good in Scotland. We have recognised for centuries that when we invest in education, we are not merely investing in individuals for their own personal gain but in the prosperity of our nation and the future of our society.
That combination of public benefit and private gain is a key theme of my speech this morning. After all, the very word “Commonwealth” used to mean public benefit or public good – you still hear the phrase “common weal” in Scotland. And so I’m going to look at how we balance competitiveness and cohesion, self-interest and solidarity; how we ensure that growth adds to our common wealth as a society, as well as to the prosperity of different individuals.
And I’m going to start with one of Glasgow’s most famous graduates. Adam Smith was Professor of Moral Philosophy here from 1752 until 1764. He wasn’t professor of economics – since economics didn’t really exist until he invented it! He was a philosopher; and his economic thought has a profound ethical and moral dimension.
But Smith’s work has often been misunderstood. Because the Wealth of Nations - the book that is the bedrock of the modern science of economics - recognised self-interest as an important motivation, people have sometimes seen it as giving a licence to selfishness.
But even in the Wealth of Nations, Smith is clearly arguing that there is a social dimension to us all: “No society can be flourishing and happy, of which the far greater part of the members are poor and miserable”
And that social perspective is even clearer in his earlier – and to my mind equally important – work, “The Theory of Moral Sentiments”, which was based on his lectures at this university. There Smith argues that the basis of our judgements is sympathy – or empathy, as we would now call it.
Smith was basically arguing for enlightened self- interest – a self-interest which recognises our responsibilities to, and feelings for, other people.
It recognises that there are wider gains for a community as a whole and for the individual within that community, when society is strong and prosperous.
My argument is that for all nations, enlightened self-interest is the guiding principle which enables us to combine fairness and prosperity at home; and to engage with the wider world as a good global citizen. It is therefore key to tackling the key national and international challenges that all countries face.
In recent decades, we have seen rising levels of inequality across almost all developed nations, but most notably in the USA and the UK.
Joseph Stiglitz is a Nobel Laureate who sits on the Scottish government’s council of Economic Advisers. He has written a book called the Price of Inequality. He points out that there is overwhelming evidence that this growth in inequality is economically damaging in itself. It curbs the spending power of the majority of families and individuals. It reduces the ability of low income families to contribute their talents, their skills and their innovations to the economy.
And it also corrodes the public trust and confidence - in government, public institutions and businesses - which are essential to the long term success of capitalism.
Mark Carney, the Governor of the Bank of England, is addressing this conference tomorrow. He gave an excellent speech to the Conference on Inclusive Capitalism in May, where he pointed out that “unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself.”
But despite that, we see too many governments using economic growth to cover some of the social costs of inequality, such as poor health outcomes and increased benefit payments – without recognising that inequality undermines the long term sustainability of that growth. They treat symptoms, rather than tackle root causes.
So one of the key issues all nations face, is how to restore and maintain the sense of social cohesion, of solidarity, of fairness, which enables capitalism to flourish in the long term. After all, it is easier to mobilise a society behind economic growth, if that growth benefits all of society.
That’s why when my Government came into office in 2007, we focussed all government activity on one purpose – “to create opportunities for all of Scotland to flourish by raising the rate of sustainable economic growth”. It’s not about growth alone – it’s about sustainable growth for a purpose – the wellbeing and happiness of individuals and communities in every part of the country.
That purpose is reflected in our policies. We have implemented a living wage within the public sector here in Scotland, which is approximately 20% higher than the statutory minimum wage. That policy is about fairness, of course – but it also promotes individual wellbeing, builds economic confidence and creates a sense of solidarity in our society.
We provide extensive support for businesses through our enterprise agencies, and we have established the most competitive business taxation system in the UK. We are an open, highly competitive economy.
But we recognise that nobody lives through their business alone. We understand that good schools and hospitals, public transport and parklands, a vibrant culture and strong communities – all of these things contribute to social wellbeing and economic success.
I mentioned Scotland’s view of education as a social good. This Government has re-established free university and college tuition precisely to preserve that principle. We’re currently working to improve vocational education at school and in our colleges.
In all of this work, we’re building a stronger society, but we’re also giving Scotland a more competitive economy. A report from the Office of National Statistics last month demonstrated that Scotland has the most highly educated workforce in Europe – that’s an incredible advantage for Scottish businesses looking to recruit, or for overseas companies looking to invest.
And we want to do more in the future. We see childcare provision as being central to the long-term prosperity of our country – enabling all our children to get the best possible start in life, and encouraging parents, particularly mothers, back into the workforce to contribute their energies and their talents.
The Commonwealth Games demonstrate our approach to growth. From the very beginning, we’ve worked to ensure that they benefit as many people as possible. So the Commonwealth Games won’t just be the biggest cultural and sporting celebration Scotland has ever seen – although they will certainly be that. They’re a catalyst for improving people’s wellbeing.
We are establishing 150 community sporting hubs around the country – a nationwide sporting legacy to complement the superb facilities here in Glasgow. We have ensured that the athletes’ village will be used as affordable housing; that transport investment meets the long term needs of Glasgow and Scotland; that the land being regenerated includes parks as well as business parks. We have made business opportunities accessible to local companies – 69% of all contracts have gone to businesses based in Scotland. And we have ensured that the Games create employment and training opportunities for thousands of young people.
As a result, the games will leave a human legacy as well as an infrastructure legacy. Thousands of people will be more active, more skilled, or more engaged with their communities, than they would have been if these games had never come to Scotland.
And of course these games will have another effect. You saw VisitScotland’s “Brilliant Moments” video for the Commonwealth Games just before I came up here. You’ll see another short video once I’ve finished about the Ryder Cup in September. 2014 is an astonishing year for Scotland. It’s a wonderful time to live here or to visit here. It’s not just the year of the Commonwealth Games and the Ryder Cup – it’s also our year of Homecoming, when we welcome the world to Scotland with hundreds of events around the country.
And as a result, Scotland has never had a higher profile on the international stage. That’s great news for jobs and investment here in Scotland. Our enterprise agencies today are releasing reports which demonstrate their huge success in attracting investment. Their work has created or safeguarded more than 7,000 jobs in the last year. The value of research and development projects – a particular priority – has almost doubled. We know from other figures that inward investment is already at a 16 year high, and international visits to Scotland increased by 13% last year.
We hope to build on that success. For example we’ve launched a sustained effort in recent years to increase our international exports. It’s been successful, and we have had stunning success in sectors such as oil and gas and food and drink.
However during that time, although the value of our exports to the Commonwealth has grown – it has risen by less than our exports to other parts of the world.
And so we want to use 2014 to build or reinvigorate trading ties across the Commonwealth and around the world. Increased trade volumes will of course bring benefits to all parties. Our Minister for External Affairs and International Development, Humza Yousaf, is chairing a panel discussion on trade as a driver for development and economic growth later today.
And of course all of this work to boost trade, to raise our international profile – it fits with Scotland’s history, as well as our future. We have always been an outward looking people.
I was reading recently about the first Scot to win a Commonwealth Gold. He was a marathon runner called Duncan Wright, at the very first Games in Hamilton in Canada. And he attributed his win in part to the support he got from the crowd. A journalist at the time said “Hamilton is noted as being a city with a preponderance of Scots in its population. The “Hampden Roar” had nothing on the tremendous wave of cheering which arose as Duncan ran around the stadium.”
It’s good that 84 years on, we will be able to give a genuine Hampden roar to the athletes of Canada! And of course the Scots of Hamilton are just one example of the mark made by Scots around the world - from Dunedin in New Zealand to Delhi in India; from Blantyre in Malawi to Banff in Canada.
And just as Scots have settled all over the globe, we are now welcoming people from around the world to study, live and work in Scotland. We hope that many more will do so in the future.
That exchange of peoples reinforces something that all of us recognise –just as individuals within a society have obligations to each other, so too do countries within the international community. And so a further reason why we welcome Scotland’s enhanced profile in 2014, is that it might enable us to make a bigger contribution on the international stage. That is something we are keen to do.
To give just one, very significant example, it’s difficult to hold a conference about the major economic challenges and opportunities facing countries across the globe, without mentioning climate change. It is perhaps the greatest economic, social and moral issue facing the planet.
It raises profound issues of fairness between nations and between generation.
Scotland has for several years attempted to set an example. In 2007 the Scottish Parliament unanimously passed the most ambitious climate change legislation anywhere in the world – committing us to a 42% reduction in greenhouse gas emissions between 1990 and 2020. As part of that, as I mentioned earlier, we are championing renewable energy - developing technologies which we hope can be applied across the planet, as we look to a more sustainable future.
But we have been increasingly aware that our actions cannot be confined to policies which will reduce the impact of climate change in the future.
After all, in the developed world climate change is causing substantial inconvenience and tragedy. In the developing world it is already causing enduring crisis and unremitting chaos.
In 2011 the Scottish Government established the world’s first climate justice fund, recognising that countries which have benefitted from carbon emissions in the past, should help those most affected by climate change now.
Our Fund is currently helping communities affected by climate change in Malawi and Zambia – for example by improving their access to clean water, and educating and empowering women so that they can play a leading role in organising their local communities.
It is small in terms of the overwhelming scale of the problem – tiny, in fact. But it is a powerful commitment from a nation determined to uphold the best traditions of its past. And it is just one way in which we work to promote the values of the Commonwealth charter - including democracy, human rights, gender equality and sustainable development.
Our Climate Justice Fund is consistent with the approach we take in our wider international development work.
For example Strathclyde University runs a £2m programme we fund to provide renewable energy for villages in Malawi.
Schools in those villages can now attract teachers more easily – it used to be almost impossible, because teachers didn’t want to live in places without electricity.
In one of those villages, called Bondo, we have worked with partners including the European Union and the UK Government. Our funding has contributed to a small-scale hydroelectric power scheme, meaning that babies are now born safely in a well-lit room. Previously, doctors and nurses had to work by candle-light. Mobile phones can be recharged – connecting the community to the wider world and giving access to services such as banking. And there’s been another important benefit. The town installed a communal television so that the villagers could watch the world cup!
Unfortunately, Malawi didn’t qualify for the World Cup...even more unfortunately, neither did Scotland... and even more unfortunately still, of the 5 Commonwealth teams who did qualify – 4 didn’t make it out of the group stages! Well done to Nigeria! But it’s an example of a project which makes a real difference to people’s lives. It puts technology to the service of enduring principles – international solidarity and enlightened self-interest.
Ladies and gentlemen, I began this speech by talking about Adam Smith. I want to end by quoting Robert Burns, who was born while Smith was a lecturer here in Glasgow. When the Scottish Parliament was reconvened in 1999, its members sang Burns’s great international anthem of democracy –
For a’ that, and a’ that
It’s coming yet for a’ that.
That man to man the warld o’er
Shall brothers be, for a’ that.”
Over the next two weeks, Glasgow and Scotland will welcome sisters and brothers the warld o’er for the Commonwealth Games.
We do so as a nation that has already contributed much to the world, and wants to contribute more in the future; a country keen to build partnerships with friends and allies from around the world; one which promotes fairness and prosperity at home and abroad.
And one which values sustainable growth- as a means for individual fulfilment, of course; and also as an aid to the public good, the social realm, the common wealth - of our nation, and of all nations.