Scotland is pulling ahead of the rest of the UK – in terms of its economic inactivity.

Scotland’s economic inactivity between October 2022 and September 2023 is at 31.7%, the highest of all UK nations.

CBI’s and Fraser of Allander’s Scottish Productivity Index revealed a stark picture for Scotland’s economic performance, finding that Scotland also fell behind in 10 out of 13 productivity indicators available in the rest of the UK.

In terms of business, Scottish GDP contracted by 0.3% in 2022 to 9.5%, whereas the rest of the UK increased to 9.8%, another case of Scotland lagging.

As far as exports, as a share of Scottish GDP they increased from 20.4% to 22.1% in 2022, whereas the UK rose to 33.4% as a whole.

Research and development for Scottish businesses as a percentage of GDP, showed a small decrease from 1.9% in 2020 to 1.8% in 2021. The UK, however, remained unchanged at 2.1%.

Despite lagging behind in several factors, Scotland does boast the highest percentage of the working-age population with a higher education, at 50%, whereas the rest of the UK has 43.5% with a higher education certificate or higher.

Scotland also shows a small rise in job-related training, rising from 26.1% in 2021 to 27.5% in 2022.

“Discussions around our country’s potential have gone on for far too long – now is the time to take decisive action as the window narrows on Scotland’s target of achieving net zero by 2045,” Tracy Black, the CBI’s chief strategy officer and devolved nations and regions ambassador, said.

“All Scotland’s sectors and regions, and the devolved and UK governments – regardless of their political differences – must work closely together for the benefit of business to achieve sustainable growth.

“With the Spring Budget tomorrow and a General Election looming, it is right to move beyond talking about ambitious goals and to take swift action before time runs out.

“Our shortage of skills and an ageing population means businesses have to look at other options such as new technology and innovation to make processes more efficient and improve productivity.”

She added: “Scotland has a highly educated workforce., we need to make sure they are contributing to sustainable economic growth by cultivating leadership skills, enhancing digital proficiency and integrating new technology.”

Mairi Spowage, director at the Fraser of Allander Institute at the University of Strathclyde, commented: “Despite improvements in the openness of the economy over the last two years as it shrugs off the supply chain and trade jolts of Covid-19 and Brexit, the latest index highlights that Scotland’s productivity is still lagging the rest of the UK’s performance.

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“There’s still plenty of work needed to improve workforce health, with the indicators suggesting a worsening of the situation with regard to sickness absence and inactivity in the last year; this is supported by wider evidence, such as the increases in the numbers of people claiming disability-related benefits.

“A key plank of the National Strategy for Economic Transformation is on getting people back into the jobs market via investment in employability programmes,“ she continued, adding: “However, despite a 10- year strategy, NSET is already being reviewed and refreshed.

“Some of the investment needed to support people back into work has often been subject to in-year budget cuts in the last two years, which means it has not materialised.”