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That balance is hugely important, but business can rest assured that we are absolutely focused on transport connectivity. Where that requires roads to be upgraded, it will happen. The agreement with the Greens has been structured in a way that allows that to happen, taking account of the imperative to move towards reducing car miles and facilitating modal shift in transport. However, as Minister for Business, Trade, Tourism and Enterprise, I am hugely focused on ensuring that it continues to happen.

Good morning, and thank you for inviting us to join you.

As the committee knows, Scotland is part of a global economy. International trade is an important mechanism through which we can enhance our place in the world and build diversity in our supply chains. Recent events, including Brexit, Covid, the blockage in the Suez canal and other challenges, have exposed vulnerabilities in our supply chains. Scotland’s remote communities, in particular, often suffer disproportionately through being at the end of long supply chains or requiring smaller volumes of products.

This has been a challenging time for many businesses, but we have also witnessed tremendous resilience and ingenuity. Supply chain shortages have accelerated change, created new opportunities for some Scottish firms and prompted innovative solutions. Perhaps the clearest example was the sourcing of vital national health service supplies such as personal protective equipment throughout the pandemic.

We witnessed companies diversifying from producing whisky to producing hand sanitiser, electronics firms repurposing production lines and subsea specialists turning to making ventilators in previously unimaginable timescales. Pre-pandemic, all our PPE was sourced from abroad; now, with the exception of gloves, the vast majority of it is manufactured here in Scotland.

Some firms have gone on to develop innovative new products that are being sold to the rest of the world. Alpha Solway, for example, a Dumfries-based company, recently developed a transparent mask that is one of only a handful of such masks that are United Kingdom approved and available on the market today. Demand for that product has extended overseas, with recent orders having been placed for millions of those masks by clients in the European Union, and additional opportunities are emerging.

We will continue to maximise supply chain opportunities for public sector procurement, and our investment in economic assets such as the National Manufacturing Institute Scotland, innovations centres, the Scottish manufacturing advisory service and others will support manufacturers to adapt to changes and constraints in the supply of materials and components. In addition, I have a programme of work on-going with port and airport operators and others to determine the scope for Scotland to export more of our products directly, thus increasing resilience and reducing our carbon footprint.

In its sessions so far, the committee has highlighted that the labour market has tightened and vacancies have increased. We are working with business organisations to develop our working with businesses action plan, which is focused on employability skills and fair work principles, to identify actions to mitigate the impact of labour shortages. We are investing more than £1 billion this year to drive forward our national ambition for jobs and an additional £500 million in this session of Parliament to support new jobs and to reskill people for the good, fair and green jobs of the future. We continue to call on the United Kingdom Government to make changes to the immigration system to combat shortages of skills and labour following the exit from the European Union.

Our new 10-year national strategy for economic transformation will focus on developing the skills that Scotland’s future workforce needs and on maximising the use of Scotland-manufactured components in areas of new market opportunity.

Robust and resilient supply chains are the bedrock of a thriving economy. We must take every opportunity to strengthen Scotland’s supply chains.

I look forward to our discussion.

Yes, of course. Transport connectivity is hugely important. The Government has published its strategic transport projects review to identify the steps that it is taking. It is important that all that is addressed and that we continue to improve transport links, whether road, rail or ferries. I have no doubt that the new Minister for Transport will already be all over that—[Inaudible.]

On you go.

Those are good questions. The first point that I would reflect on is the suggestion in your question that we know where the gaps are. It is one thing to say that the construction industry needs 22,000 people, but the question, then, is what skills are needed. Clearly, a wide range of skills is required on any construction site.

We also need to look at the trends in the sector. At the moment, we are doing a lot of work on developing capacity, capability and innovation in off-site manufacturing, which moves a lot of construction work in modular form into factory settings and therefore will require a different skill set. There has also been a shift in the materials that are being used as a consequence not only of shortages but of the transition to net zero, with more timber structures—or, indeed, different types of timber structure—coming into play, and the types of skills that are required to support all that work are different, too. The situation is evolving over time, and it is important that we stay close to it.

Likewise, we talk about digital skills, but the fact is that coding languages evolve every year or two. I am not an expert in the area, but when you look at the requirements involved, you can see how someone who was trained in coding 10—or even five—years ago might find that their skills are largely out of date. It is therefore important that they understand what the new coding requirements are and can upgrade accordingly. Of course, that is different from the broad-based digital skills that are required by people who are not necessarily involved in digital work all the time but who might need to know how to work a spreadsheet, for example, or how to deal with certain digital connectivity issues. We should understand that, even within such broad buckets, there is a whole range of different issues to take into account.

As for the question of how we get people to take advantage of these things, you are right to suggest that there will be a whole range of things involved in that. Some people will be very hungry to take part and will see it as an advancement and an opportunity to up their income and to put themselves in a more advantageous position, while there will be others whom you will need to make aware of the opportunities. That sort of thing will extend through the whole piece, so there needs to be closer engagement between business and schools to ensure that the young people who are coming through understand what the opportunities are, are able to set their sights on achieving them and can see how their choice of subjects or decision about whether to go into further or higher education reflects the types of careers and opportunities that exist and how they can take advantage of them.

Similarly, people in mid-career might decide to reskill, and there are some great initiatives in, say, coding training out there. We will look to develop that aspect. There are also, unfortunately, people who are facing redundancy and the partnership action for continuing employment—or PACE—initiative is there to support them. Again, a huge priority is to make people aware of the different retraining opportunities that exist.

I have also mentioned labour market inactivity. How do we ensure that people who are out of work for health reasons but who might be able to work, say, part-time or in certain employment can focus on getting the essential skills that they need? Moreover, people who are returning to the labour market after having a family need to be aware of what is available. We are talking about hundreds of thousands of people, but the training programmes are there and the Scottish Government is putting in a significant amount of funding. That said, you are absolutely right; we need to join all of this up and ensure that provision reflects what businesses need now and in future and that people are aware of what is available. It is something that we are constantly focused on.

It is on-going. There are dozens of aspects to that across the education system. Some of that, such as doing more computer science teaching is schools, is obviously going to take time because of the resource in terms of teachers that are able to deliver those courses. As Mark Logan raised in his report, that is a challenge in itself—we need to deal with that and then roll out the courses across the school curriculum. It is hugely important. Coming from a science, technology, engineering and maths background, I know how critical that is.

Other aspects of the report’s recommendations, such as the roll-out of the tech scalers, are on-going. There are different timescales for the different recommendations and action points in the report. To his credit, Mark Logan has kept up the pressure. We are asking the Government and the system to do things differently. I am keen for the Government to be more agile, responsive and able to execute initiatives such as those that are proposed in the work that has been undertaken by Mark Logan. We continue to push that along as fast as possible. We are on the right track.

The strategy for economic transformation will come out shortly and that builds on the work of the Logan report, extending it to other sectors and parts of the economy. It broadens the approach to tech scalers and supporting those growth businesses, as well as focusing on the skills aspect and ensuring that people in the early stages of their career and mid-career are able to retrain in tech, coding skills and digital skills of all shapes and sizes in order to meet the broader requirements of the new industries that we are developing in Scotland.

What we can do is what we are doing. As I said, it is not the whole answer. What we can do is marginal in the sense that it will allow us to tackle some of the issues, but not the key barriers to international trade, which is hugely unhelpful. As I said, the work that we are doing to support more manufacturing in Scotland is part of the solution, but—as you rightly said—Brexit restrictions make supply chains difficult for businesses, consumers and the Scottish economy.

The situation will vary sector by sector and opportunity by opportunity. However, in advanced engineering, life sciences and other sectors in which we have opportunities to manufacture more in Scotland, the shortage of specific skills that would normally have come from the international talent pool is a key issue. A significant similar brake has been put on businesses in other parts of the economy, including agriculture, food processing, hospitality and tourism, which rely on significant numbers of migrant workers. Those sectors are suffering as a result of Brexit and the restriction on labour migration.

Do you mean inward migration or inward investment?

Maggie Chapman is right. We need to dig a bit deeper and understand what is going on.

For example, energy is not a scenario where you have fossil-fuel production on one side and renewables on the other and where the two are completely different things that are completely divorced from one another. They are not. The businesses that are involved in one side are almost always involved in both. The newer businesses in renewables that are specifically focused on new technologies are not, but the legacy businesses that are in fossil fuels are transitioning. Pretty much every business in that sector is on that journey and is reskilling its workforce as it makes that move. A lot of the skills are transferable, and that can be done quickly. For example, a lot of the offshore and deep-water skills are transferable from oil and gas platforms to floating offshore wind. A lot of that will happen on the opportunities side as we move the production over to renewable energy.

There are other areas where there is a bigger gap in relation to the skills that you need to acquire to transfer. It is fair to say that this has got a huge profile. You turn the television or radio on and we are talking about those issues, particularly off the back of the 26th United Nations climate change conference of the parties—COP 26. People are aware of that when they are making decisions on where they want to have their career.

Ironically, one of the comments that you get from oil and gas production is that younger people in particular do not want to go and work for them anymore, which is perfectly understandable. They are focused on net zero, understand the climate emergency and want to be in the sectors of the future. There is that pull from the technology as things move over and that push from people at all stages in their careers who want to be in the sectors of the future.

Our job is to provide the bridge that allows them to have those training opportunities. However, it is not only us—the private sector businesses are also hugely invested in that. We work closely with them and they are doing a lot of the heavy lifting. Obviously, it is in their interests; however, from our point of view, it is also the right thing for them to do. Have we got everything absolutely perfect? Of course not. However, an awful lot is happening that is moving us increasingly in the right direction.