Scotonomics

17/12/2025

In this episode of Scotonomics, William Thomson is joined by Nick Sherrard to unpack an uncomfortable question:

How can Scotland host the biggest arts festival in the world and still fail to turn it into long-term economic value for its own creative sector?

Drawing on Nick’s recent research into the Edinburgh Festivals, the discussion reveals a striking imbalance. Global artists, producers, and investors flood into the city each August, yet Scottish creative firms often struggle to secure visibility, influence, or lasting commercial benefit. Major decisions are made elsewhere. There is no Scotland House to promote national talent. Even festival infrastructure and digital platforms are increasingly sourced from abroad.

The conversation broadens to innovation more widely. Nick challenges the way Scotland talks about “ecosystems” without being clear about the mechanisms involved. He outlines the four stages of innovation, arguing that Scotland currently behaves like a stage-four economy: good at assembling ideas developed elsewhere, but weak at owning and scaling original innovation.

The episode also explores how innovation is too often treated as an unquestioned good, disconnected from purpose, wellbeing, sustainability, or community wealth. Big tech, empire-building, and loss-leader disruption models like Uber are contrasted with what a genuinely public-interest innovation strategy might look like.

Finally, the discussion turns to policy and power. From the role of the enterprise agencies and the Scottish National Investment Bank (SNIB) to the deeper limits imposed by currency control and foreign ownership, William and Nick argue that Scotland’s economic institutions lack accountability, clarity of purpose, and ambition in the right places. Instead of endlessly chasing unicorns or inward investment, they suggest a far more radical shift. One that directly backs people, enables experimentation, and links innovation to real social and economic outcomes at home. The episode closes with a call to stop abstract talk and start focusing on the practical mechanics of how Scotland actually builds, owns, and benefits from its own economy.

Read Nick's article in DIGIT:
https://www.digit.fyi/scotland-innovation-ecosystem/

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17/12/2025

The SNP (not the Scottish Government) released a paper titled "It's Scotland's Energy" earlier this month. You can download it here:

https://drive.google.com/file/d/1jYhA0rRzv7DdxFACaJ3bwRj6idwDsmkE/view

Other commentators have posted their views on the report.

On the one hand, it is encouraging to see the SNP discuss how the energy (electricity and natural gas) market would differ in an independent Scotland. There is a focus on reducing bills for businesses and households 👍 and on increasing renewable generation, while clearly shifting away from nuclear 👍👍

It is also good to see the use of 'just transition' again, which has been lacking in recent narratives.

The paper spends some time explaining and demonstrating how terribly the current system - operated from Westminster - affects households and businesses with electricity charges both high and constantly shifting. This, as we all know, is terrible when you are trying to a. pay or b. have a workable budget that you can rely on.

There is no denying that the current system in the UK is terrible for everyone EXCEPT electricity generators.
,
The key point I want to highlight is that Scotland's success in renewable energy has been driven mainly by current UK policies that heavily support companies producing renewable energy. The profit is what attracts them to the UK! They make a profit by charging higher prices. As soon as you lower the price (and increase the % that companies are supposed to give to local communities), foreign companies will invest in renewables elsewhere. So... the more successful you are at lowering bills, the less renewable supply you have.

This is a simplification, but I hope it helps explain my main concern with this paper (and the SNP/Scottish Government's overall economic approach):

Once again, they are looking only to market solutions. There is no mention of a Scottish Energy Company that will generate and distribute electricity or natural gas.

As electricity expert Brett Christophers (author of The Price is Wrong) told me in 2024, unless you have the state as a serious player in the energy market, you will be unable to dictate or even heavily influence energy prices.

The plan is to lower prices for consumers, while continuing to encourage foreign investors to come into Scotland and generate electricity, which increases their costs. You can probably see why this makes little sense.

We once again see that foreign direct investment (FDI) is the perceived solution for this administration. But £11.5 billion leaks out of the Scottish economy every year! By encouraging more FDI, we increase these flows, and the stock of wealth that generates them is also in foreign hands.

In conclusion. Yes, independence allows Scotland to make better decisions, and specifically with energy, the UK has royally buggered that up over the last forty years. But if Scotland seeks the same solutions in the market system that dominates in the UK, we will end up with the same results. The proposal is not radical enough because it is framed within a neoliberal understanding of the economy, which requires us to bow down to markets and international capital.

There is an alternative. A Scottish Owned Energy company that distributes 100% community generated or locally owned renewable electricity. A company that is designed to make no profit. Instead, it uses public money to deliver massive emission reductions, a just transition, and the lowest electricity bills across Europe. And that is perfectly achievable.

All we need is for the administration to drop its fascination with markets and FDI.

15/12/2025

Advice from a great institutional economist on the job of every true economist and detials of this year's final Scotonomics podcast episode - https://mailchi.mp/scotonomics.scot/a-few-made-weeks-or-13052994

03/12/2025

See the full programme for Scotland's Economics Festival - https://mailchi.mp/scotonomics.scot/a-few-made-weeks-or-13052858

01/12/2025

Scotland's Economics Festival Launched today - https://mailchi.mp/scotonomics.scot/a-few-made-weeks-or-13052818

01/12/2025

**Launched today** 📆
Scotland's Economics Festival 🏴󠁧󠁢󠁳󠁣󠁴󠁿
Leith, 19 - 21st Mar 2026
Talks from £5 🎙️
PLUS loads of free activities ☕️📚🍺
In a time of economic uncertainty & growing inequality, we offer a space to ask BIG questions & hear BIG ideas.
https://scoteconfest.org

28/11/2025

Scotland's Economics Festival officially launches on Monday. Please do follow and like the page and share all the events once they are posted.

Thursday's session are already on the page.

https://www.facebook.com/profile.php?id=61584079245130

Look out for further details.

Scotland’s Economics Festival is a unique, public-facing celebration of BIG economic ideas.

26/11/2025

Soon, the Scottish government will issue its own bonds. As outlined in the Scottish Government announcement, it is the first step for Scotland to demonstrate to international markets that it is a stable destination for more foreign investment.

In this live Q&A, William and Jim will cover every aspect of the decision by the SNP-led administration (assuming they are returned to lead the government in 2026) to borrow £1.5 billion from money markets rather than from the UK Treasury - via the National Loans Fund.

There has been significant coverage in the mainstream media and many social media comments.

We aim to give the definitive answers to questions about the decision. We will no doubt cover:

- The background and limitations on Scottish Government borrowing
- Why has this decision been made now?
- Who advised the Scottish Government to go down this route?
- Will this cost more than borrowing from the NLF?
- Were there any other options available?
- How have the bonds been rated?
- What does this tell us about the Scottish Government's view of credit agencies?
- What can we learn about the plan for independence?

And much, much more.

Join us live. And submit your questions in the comments now.

Background reading:
William's article: https://scotonomics.org/scottish-government-new-bonds/

Jim's article:
https://bylines.scot/news/economics/the-scottish-government-kilts-progress-or-false-dawn/

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25/11/2025

Why so much abuse for anyone who suggests things could be better? Scotonomics newsletter - https://mailchi.mp/scotonomics.scot/a-few-made-weeks-or-13052746

25/11/2025

From a European professor of economics, I know. "I'd say Polanski is promising... but my god, the reactions of British fiscally conservative people is a disaster, they are just so nasty. I guess it's because he is the first politician in a while to challenge what had become a consensus."

23/11/2025

My two boys watching a mainstream politician say that "the government's finances are nothing like household finances"

I hope 100,000s of other parents and kids and paying as much attention. Zack Polanski on BBC today saying the above. And why is the government not like a household?

When the government spends it increases our financial wealth.

When is spends it creates new currency (taxes don't fund expenditure).

"Borrowing" is simply swapping one government financial liability (reserve balances) for another (bonds) primarily as an accounting tool.

The government sets the interest rate, amount and timing of this asset swap.

As long as resources are available at current prices there is no danger of a high debt to GDP ratio having any negative impact on the economy, with one exception.

High interest rates increase income inequality. (Interest rates offer a UBI for the ultra wealthy).

In the last year £160 billion has been paid on interest on government debt because the UK government CHOOSE to issue this level of debt, at the wrong time and at a high interest rate.

***These are government policy choices.***

Simple decisions would save £10s billions each year.

If the roof seems to be falling in on the UK it is because the government choose to make it happen.

Politicians have the power. Don't believe for one minute that they must manage the economy like your home.

The mess we are in is because they believe that exceptionally damaging analogy.

Zack gets it. And hopefully other politicians will be bold and brave enough to admit it too.

17/11/2025

Credit ratings, bonds and snoozefests.... this week's Scotonomics newsletter - https://mailchi.mp/scotonomics.scot/a-few-made-weeks-or-13052595