Unlocking Regional Productivity in Scotland: Emerging Insights from a New Programme of Work 

Anna Clover, University of Glasgow 

Scotland’s productivity puzzle is well recognised, yet too often treated as a national challenge with uniform causes and uniform solutions. In reality, productivity is deeply shaped by local conditions: investment landscapes, labour markets, infrastructure, work force demographics and types of institutional support available. These forces interact differently across Scotland’s regions, producing contrasting outcomes – demanding a more granular and place-aware approach. 

The Unlocking Regional Productivity in Scotland project – a collaboration between Prosper and The Productivity Institute’s Scotland Forum – is designed to explore these dynamics, through a combination of regional mapping, interviews and survey data. In doing so, we are aiming to illuminate organisational and place-based factors that are impacting productivity performance across Scotland, supporting policy and practice grounded in real business experience.  

Although the research is still underway, workplace practices are emerging as an area that businesses consistently discuss when reflecting on their ability to attract and retain employees and operate effectively in their regional context. This blog post focuses on this early theme and shares examples from interviews carried out across Scotland’s six regions: Eastern Scotland, Highlands and Islands, North Eastern Scotland, Southern Scotland, West Central Scotland and East Central Scotland.  

Highlands and Islands 

A critical challenge for businesses in the Highlands and Islands, relates to the regions declining population and ageing workforce, creating employment gaps (Highlands and Islands Enterprise, 2022). We spoke with ‘Colin,’ a Director at a medium-sized employee-owned seafood processing company ‘SeaCrest’, situated in the Highlands. Discussing their approach to attracting new talent to the business, he outlined how a recent employment drive emphasised the desirability of their values, sustainability approach and fair work practices – particularly for Gen-Z workers. These, he explained, marked them out as ‘an employer of choice,’ differentiating them in the employer market for new candidates. What’s more, being a Real Living Wage employer, ensuring stable roles and giving employees a stake in the business were described as essential for employees – particularly those in roles that are physically demanding, involving working outside in mixed weather conditions. In this way, being a values-led, employee-owned employer with demonstrable sustainability practices, both attracted employees to the business, and contributed to retaining them too.  

Southern Scotland 

Southern Scotland faces some similar challenges, in terms of an ageing population and younger generations of workers leaving the region to seek opportunities elsewhere (South of Scotland Regional Economic Partnership, 2021). The region is further marked by a lack of high-quality employment opportunities, with the median average salary sitting below the Scottish average (ibid). I spoke to ‘Laurie’, a senior manager at ‘Southern Heritage Looms’ a textiles manufacturer located in the Scottish Borders. She explained how their fair work practices, such as being a Real Living Wage employer and offering employees stable employment, as well as their connection to their local community and sustainability practices, such as on-site generation of electricity through solar panels, gave their business ‘extra value.’ Explaining further, she said that customers were more willing to pay for a high-quality item, with the knowledge that the business was benefitting its local area and treating its workforce well.  

Interestingly, she also highlighted that they ‘offer quite a traditional manufacturing package.’ which is ‘suddenly quite a positive thing’. The predictability and regularity of the hours they offer contrasts with the precarity, and unpredictability of contracts other employers offer in their area. She explained how this formed a particular pull for younger generation employees whose employment experiences have largely consisted of low-hour and zero-hour contracts. Considering the experiences of a specific young employee, she paraphrased his comment that ‘it’s really great. It’s the second month I’ve had the same money. I’m going to go on holiday this year. I can plan.’ This, she explained further, had a ‘snowball’ effect, wherein word-of-mouth contributed to younger generation workers seeking roles in their business. 

East Central Scotland 

Unlike other parts of Scotland, East Central Scotland, and more particularly, the City of Edinburgh, has high rates of employment and boasts high-quality jobs. However, as Skills Development Scotland (2025) identifies, the region is experiencing issues with skills gaps and a recent report from Edinburgh College found that 88% of employers were struggling to fill vacancies due to a lack of appropriately skilled applicants (Edinburgh College, 2024). I spoke to ‘Caroline’ from ‘Pizza Ovens Inc.’ A large pizza-oven manufacturing business based in Edinburgh but selling internationally. Although the business had experienced rapid growth during COVID-19, with an uptake of customers buying at home cooking equipment, challenges had arisen with their ‘mishmash’ of employee skillsets. Finding skilled employees in their region proved a further challenge, with the business having to hire outside of Scotland and pay for re-location costs. For this reason, they have a strong focus on investing in training and upskilling their existing workforce. This is alongside ensuring they are operating in a way that is attracts and retains employees. In discussing this, she explained that they were ‘very supportive as an employer of the person who want to progress’ ranging from junior employees to senior executives. Crucially, she explained, that as well as offering benefit to their business it was ‘fulfilling for the individual.’ This approach, contributed positively to employee’s motivation – ‘they’re enjoying what they’re doing, they can see their path to progression, it means they stay with us, which is important.’ In this way, offering fulfilling work with routes for progression and accessible training, was an important aspect to both filling skill gaps but also retaining employees. 

Concluding points 

These early insights show how workplace practices are closely tied to the challenges and opportunities that businesses face in their regional contexts. Our interviews show that workplace practices are significant in recruitment and retention across the regions, even though there is some variation across places and businesses. As the project continues, the survey and ongoing interviews will help build a fuller picture of how these practices link to productivity across Scotland. 

Pseudonyms are used throughout. 

References:  

Edinburgh College (2024) Our Capital, Our Workforce: Employer Skills Survey Report 2024. Edinburgh: Edinburgh College. Available at: https://www.edinburghcollege.ac.uk/media/bw2d0cwn/employer-skills-survey-2024.pdf 

Highlands and Islands Enterprise. 2022. Rural and Regional Disadvantage in the Highlands and Islands: Executive Summary (commissioned by Indigo House). Inverness: Highlands and Islands Enterprise. 

South of Scotland Regional Economic Partnership. 2021. South of Scotland Regional Economic Strategy 2021–2031. Dumfries and Galloway / Scottish Borders: South of Scotland Regional Economic Partnership / South of Scotland Enterprise. 

Skills Development Scotland. n.d. Data Matrix. Accessed [26.11.2025]. Available at: https://www.skillsdevelopmentscotland.co.uk/what-we-do/skills-planning/data-matrix