What Scotland could teach the post-Trump world

Should the world have anticipated the disruption that current US President Donald Trump has unleashed upon it before he was elected for the second time? Possibly.

The point is moot, the world order is not what it was and is unlikely to look like it did before Trump’s second term anytime soon.

While most countries are forging new alliances and looking for alternative markets to handle the fallout, one country might just be in a better position than most.

Even though it is not technically a country, Scotland started preparing for an economic revolution in 2022.

Describing the next ten years as the “decisive decade” in transforming Scotland into a global economic player, it came up with a programme aimed at achieving both economic and social goals in this decade.

Called the National Strategy for Economic Transformation (NSET), the ambitious plan lists a number of key deliverables, including:

• Establishing Scotland as a world-class entrepreneurial nation;
• Strengthening Scotland’s position in new markets and industries, generating new, well-paid jobs through a just transition to net zero;
• Making Scotland’s businesses, industries, regions, communities and public services more productive and innovative; and
• Ensuring that people have the skills they need at every stage of life to have rewarding careers and meet the demands of an ever-changing economy and society.

The NSET is a frank and honest discussion of Scotland’s current social and economic status. It recognises the limitations that British law imposes on it, contemplates solutions that work within these confines, and looks for innovative alternatives.

While primarily a government initiative, it has celebrated a few milestones in the last few years. It does seem, however, that the public in general is not very aware of the strategy.

It seems logical that the NSET should be a blueprint for other countries to follow. The power of an economy lies within the capabilities of its people.

Trump’s worldview has forced countries to think inwardly and develop capabilities for other markets, and in a hurry.

Programmes like the NSET are designed for this eventuality, but not at the pace that Trump has now dictated. Government programmes tend to operate at a much slower pace because of bureaucracy and protocol.

Read:

In order for any such programme to have a chance of success, it must include the private sector. In fact it must more than just include them: the private sector needs to become an integral part of this process.

This brings us to South Africa’s black economic empowerment (BEE) policy.

Learning from BEE success

We’re not here to make a judgement call on BEE, but [to learn from] certain things about the policy that have been ridiculously successful.

The drafters of the early policy, which ultimately manifested itself in the BEE codes of good practice, added in a feature that ensured the policy would proliferate throughout the South African economy. This feature was the procurement element.

Read/listen:
New BEE incentives as transformation fund is revamped
Most South Africans want BEE abolished, study finds
SA banks seek new BEE scorecard

The essence of the policy is that a company’s ultimate BEE score impacts on the procurement element of its clients. It wasn’t the government pushing the BEE narrative – it was the private sector that drove it, resulting in BEE scorecards being presented in almost every mid-sized town across the country.

It is this glue that is required for programmes like Scotland’s NSET to not only take root in the country, but to spread the word and thrive.

The procurement element is unfortunately where the efficacy of South Africa’s BEE ends.

The process is now viewed as a reluctant tax, with many companies finding ways to get around it. Its currency with the private sector has almost run out.

Listen/read: A new economic world order …

As for what could serve as the glue in Scotland’s case, we cannot say quite yet. But there is a solution, and once it’s discovered, I predict that the NSET will deliver on its goals at a much faster pace.

It’s just a matter of when other countries follow suit.

Paul Janisch is a country economic transformation strategist based in Johannesburg. 

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