By Dr Liz Cameron CBE, Chief Executive of the Scottish Chambers of Commerce
While difficult challenges remain, there is reason to be hopeful about 2025.
The recent UK Budget and the Scottish Budget have played pivotal roles in shaping business sentiment. Measures to support growth and investment have been welcomed but there are still major concerns about the impact of taxation, rates relief, and public spending.
These fiscal decisions will influence business confidence as we progress through 2025, underscoring the urgent need for targeted support and policy clarity.
Last year Scotland’s economy demonstrated remarkable tenacity, with the latest data indicating steady GDP growth, driven by key sectors such as renewable energy, technology, life sciences, and tourism. Business confidence, though tested by global market volatility and inflationary pressures, has shown signs of steady recovery.
Inflationary pressures, which at the start of 2024 were the biggest cause for concern for Scottish business, began to stabilise in the second half of the year. While energy prices and supply chain disruptions presented significant headwinds, Scotland’s business community responded with agility. It was encouraging to see how quickly companies adapted through innovation, digital transformation, and the re-shoring of supply chains.
Labour market conditions have also seen positive movement. Unemployment rates remained low, and businesses continued to invest in upskilling and retraining the workforce. Notably, Scotland’s young people are reaping the benefits of apprenticeships and skills development programmes, which have played a crucial role in closing the skills gap.
If we are to remain competitive on a global stage, we need to continue to upskill our future workforce. The current Apprenticeship Levy is not fit for purpose, and I hope our Holyrood government make it their New Year resolution to deliver a long overdue review.
Labour shortages in critical sectors such as construction, hospitality, and manufacturing continue to present obstacles. Tackling this issue requires collaboration between government, industry, and educational institutions to align skills provision with market needs. Access to skilled labour must remain a priority if we are to sustain growth and innovation.
As navigate 2025, several challenges loom large. Inflationary pressures may not have fully abated, and interest rate uncertainty could weigh on business investment. Global economic conditions, particularly in the Eurozone and key export markets, will have a direct impact on Scottish exports.
While Brexit posed challenges, Scotland’s exporters have found new pathways into global markets. Demand for our goods, from whisky to sustainable textiles, remains strong. As new trade agreements come online, we must continue to champion Scottish exports and support businesses’ access to international markets and we welcome the continued support of both the Scottish and UK governments in helping to promote overseas trade.
The USA is critical for Scotland’s economy given it is both Scotland’s top international export destination and our largest inward investor. With its vast consumer base and strong demand for high-quality products, Scotland’s whisky, seafood, textiles, and tech solutions are well-positioned to thrive. However, tariff-related threats loom over Scottish exporters as we approach the start of a new President Trump administration.
Unpredictable trade policies and the imposition of tariffs on specific goods will create instability for exporters. Scotland’s businesses will need government on its side to negotiate competitive trade terms and minimise tariff-related barriers.
Many businesses particularly in our leisure and hospitality sectors will nervously await 2025.
The cost of doing business remains a significant concern. Rising energy bills, higher raw material costs, and increasing regulations are placing additional strain on profit margins and we need targeted support measures to ease these pressures.
The need for sustained rates relief continues to be a pressing issue and the SCC alongside the wider business community including the Scottish Passenger Agents Association have raised these concerns directly to Scottish Government. Without parity of support, the risk of closures and job losses could escalate, particularly for smaller operators facing reduced footfall and higher operating costs.
Looking ahead, I have every confidence that the enduring spirit of Scottish entrepreneurship will ensure we are well-placed to seize new opportunities.
The ongoing transition to a net-zero economy offers huge opportunities to propel our economy forward. Regulatory changes, the pace of green infrastructure investment, and the rising costs of the transition will test the mettle of our business community. However, Scotland’s position as a global leader in renewable energy offers a substantial competitive advantage, if leveraged effectively.
The digital economy continues to offer vast potential. Scotland’s thriving tech ecosystem, coupled with strategic government support, is positioning the nation as a hub for fintech, artificial intelligence, and data-driven innovation. For business, digital adoption is no longer a “nice to have” but a commercial necessity. By supporting businesses to embrace digitalisation, we can drive productivity and competitiveness.
Scotland’s wealth of natural green resources—offshore wind, hydrogen, and tidal energy—gives us a transformative competitive edge. If the right investment climate is nurtured, Scotland can position itself as a global leader in green technologies, attracting international investment and creating thousands of high-quality jobs.
None of these opportunities will be realised without a concerted effort from government and business. 2025 must be a year of bold leadership and policy alignment. Businesses need clarity and consistency in regulation and support. From access to finance for SMEs to trade facilitation, government and industry must work hand in hand.
Moreover, fostering a culture of entrepreneurship across Scotland’s educational system, from primary schools to universities, is crucial to embedding entrepreneurial thinking at every stage. Business support networks, accelerators, and mentorship programmes must be accessible to all—particularly women, young people, and underrepresented groups.
Scotland’s economy stands at a pivotal moment. Our performance in 2024 reflects a story of resilience, adaptability, and determination of the business community. As we look to 2025, there is no room for complacency—but there is also every reason for optimism.
If we embrace a growth mindset, nurture entrepreneurial spirit, and lead with purpose, Scotland can emerge stronger, greener, and more inclusive.
The Scottish Chambers of Commerce Network will continue to champion this vision, advocating for the policies, investment, and support that our businesses need to thrive in 2025.
Originally published in The Press & Journal on 30th of December 2024, this article has been adapted for the Business Scotland Magazine.
