Success in net zero push 'will depend on ability to innovate'

First Minister says his government has no problem with business prosperity, so long as economic growth has a purpose

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The First Minister has told business leaders that Scotland's success in the push towards net zero will depend on its ability to innovate.

Humza Yousaf gave a keynote speech on Monday afternoon at the Scottish Council for Development and Industry (SCDI) Forum in Edinburgh.

He talked up the economic opportunities of a just transition to renewable energy, as well as announcing the publication of a new Innovation Strategy this week, which will express his ambition "to become one of the most innovative small countries in the world".

Yousaf told delegates: "The move to net zero is not simply an environmental necessity, but a massive economic opportunity.

"It is crucial to Scotland's future prosperity – so we will work with businesses to make the transition a success," adding: "That success will depend, to a large extent, on our ability to innovate."

The Scottish Government's new innovation strategy has been shaped by a steering group co-chaired by Sir Jim McDonald, principal of Strathclyde University, alongside collaboration with businesses.

"There's massive economic potential for Scotland in the journey towards net zero, I'm aware that we can't compete with US or EU subsidies, but we can be smarter and sharper in order to attract investment here."

The First Minister also compared Scotland's ability to use innovation to drive economic growth with similarly-sized countries such as Denmark, Norway and Finland, claiming these nations are currently doing better than Scotland in this regard.

"The innovation strategy will outline how we intend to emulate those countries - including by developing clusters in areas where we already have a competitive advantage - such as net zero, advanced manufacturing, health and life sciences, and data and digital technology.

"The innovation strategy will, I hope, lead to a lasting improvement in Scotland's economic performance, and signal that Scotland is determined to become a world leader in entrepreneurship and innovation," Yousaf added.

He also mentioned that his Scottish Government sees no conflict with business prosperity, so long as economic growth has a purpose.

"We need thriving businesses to create jobs and make people more prosperous," said Yousaf. "My dad's business has just turned 40 years' old... he's an entrepreneur, he created wealth, jobs, taxes.

"In working on our new deal with business... I'm aware we won't always agree, and that many feel they're not being listened to - especially at the policy inception stage," he continued, adding that he's due to receive an interim report on findings in the next couple of weeks.

Asked by host Sally Magnusson about the future of Scotland's Deposit Return Scheme, Yousaf reiterated earlier statements that while final decisions are yet to come from the UK Government and the Scottish Cabinet will discuss on Tuesday, he struggles to see how it can go ahead without the inclusion of glass bottles.

"I really regret the fact that this has become an issue of disagreement, it's within the devolved competency, but I was warned that the Internal Markets Act might be used to encroach into it," he said, adding that he was not willing to put Scottish producers like AG Barr and Tennent's at a competitive disadvantage.

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