What is the direction of travel for the Scottish economy?

With an election coming up I’m conscious I could offend a lot of people if I stray into the political arena. However, that’s no reason not to write about the things that affect the world of construction and engineering – and indeed the world of recruitment. At a time when the political parties traditionally queue up to offer us stuff – better roads, rail, schools, weather, a chicken in every pot and basically free everything that might make us vote for them – it’s perfectly reasonable that we, the electorate, should pose difficult questions for them.

 We’ve been fortunate over the last few years in having a lot of major investment in infrastructure projects in Scotland. Anyone driving across the Forth Bridge can see that rather splendid new structure that will soon help relieve congestion between Edinburgh and the north. It wasn’t that long ago we had all the construction work associated with the Commonwealth Games in Glasgow, the Edinburgh tram project, and we’re just about finished with all the M8 improvement works while the Aberdeen bypass ought to be complete later this year. In addition, the North Sea oil industry has rather died a death in the last wee while. There are even some fears that the Scottish economy may be in recession, although we’ll have to wait till the summer for the Q1 figures for 2017 to confirm or deny that. So, what does this mean that we want from our politicians? What do they need to do to improve the economy? 

 Well, from our perspective as recruiters of the men and women who make the buildings and infrastructure that we all need to live and work, we want our politicians to face up to difficult issues. I appreciate there are more questions than answers, but I think that it’s up to the politicians to come up with the latter, in response to what concerns the people (OK, me!). I could wax lyrically about this for pages, but today I want to concentrate on just one area – transport – and the likely changes in the way we use it in the future.

 Transport infrastructure is vital to our future economic prosperity. Our roads, it is regularly reported, are crumbling. Railways are popular but in the south of England they are a bit of an unreliable mess at times. Today, I read of a Professor Seba at Stanford University in the USA who believes that we’re on the verge of a revolution in transport, whereby there will be virtually no petrol/diesel vehicles of any kind by 2025 and instead, because of the simplicity of the electric engine, there will be driverless vehicles that will run for 1M miles. That’s a sea change of tsunami proportions, opening up some difficult questions for everyone, whether they drive vehicles or not.

 Even if Professor Seba is only out by a few years, the direction of travel is clear. It will mean a massive change in the way we use vehicles. The price of oil would fall as demand falls. That would mean far less tax coming to government, which would make it more difficult to pay for those crumbling roads. Crucially, the reduction in the use of oil could devastate the economy of NE Scotland (and we still have to pay for all the decommissioning of those offshore platforms). All the huge companies that make cars, and the garages that service them, would have a dilemma about the degree of built-in obsolescence these new electric, 1M mile cars should have. Petrol stations would virtually disappear. Pollution would decrease substantially.

 For recruiters, in the short term, not much would change. We’ll still be hiring site managers, structural engineers, bridge designers et al for quite a few years to come. However, we too need to consider how these changes in the economy might affect us. Will there need to be a huge investment in roads (and railways) to allow us all to travel (virtually stress-free when we’re no longer doing the driving)? Will more maintenance be required on our transport networks? Will those countries/communities where the economy is based on big oil and/or big auto (think Saudi Arabia or Wolfsburg) need substantial state help to cope – and will the skilled workers in oil and gas and motor manufacturing need to re-train and seek work elsewhere? The answer to all these questions is undoubtedly yes, and the recruitment industry – and the next government - should be planning for this now, not waiting and reacting as and when it happens. Did I hear someone say “fat chance”?

 While we can quibble with Professor Seba’s timeframe, this is coming. India is planning to phase out all petrol and diesel vehicles by 2032 and China wants 7M electric vehicles by 2025. We can argue that this is only one sector of the economy, but whether we like it or not, it’s one that underpins all our economic and human activity. And it’s one that politicians in particular need to plan for – and share their plans – now, so that we know that whoever is in power in five years time has been thinking and acting about how this will all work out over that period and into the years ahead. 

Chris Peace, MD, Peace Recruitment