Scotland’s “Middling” Productivity: An International Perspective

Using data from a variety of sources and novel methods, we show that the productivity gap between Scotland and the OECD’s top performers can be attributed to a low capital stock per worker, and low “Total Factor Productivity.” The former refers to a country’s cumulative investment in machinery, equipment and infrastructure. The latter refers to the efficiency with which an economy combines its productive resources. Our findings suggest that Scotland could raise its productivity by encouraging private and public investment, and tackling possible causes of poor economic management.