PESTEL analysis of Scotland (Country Profile)
This is a comprehensive ‘PESTEL analysis of Scotland (Country Profile)’. It identifies and explains several powerful factors that affect Scotland today. These factors may also have an impact on the future of the country.
Political factors that affect Scotland
Scotland is a small country in the United Kingdom. Its capital city is Edinburgh. Notable political parties in the country are Scottish National Party (SNP), Scottish Conservative & Unionist Party, Scottish Labour, Scottish Green Party, and Scottish Liberal Democrats.
The Scottish Government has many responsibilities in areas such as the economy, education, health, justice, rural affairs, housing, environment, equal opportunities, consumer advocacy and advice, transport, and taxation. However, responsibilities concerning immigration, the constitution, foreign policy, and defence are reserved to the UK government as Scotland is a devolved nation. The First Minister is the leader of the Scottish Government who is supported by several cabinet secretaries and ministers (Scottish Government, 2022).
The Scottish National Party (SNP) wants Scotland to be independent from the United Kingdom. However, the result of the 2014 Scottish independence referendum was not in its favour. In addition, the conflict in Ukraine may push many politicians and people to give the idea of independence a second thought. However, some analysists believe that if another referendum is held today, the results might show that most people are in favour of leaving the UK.
Scotland is a generally stable country. However, infighting, and lack of trust among senior figures in some political parties have badly impacted on the public trust. Similarly, Brexit has created uncertainties as well. It is worth noting that the majority of Scottish voters voted to remain within the EU.
Economic factors that affect Scotland
Economic environment is a key part of discussion in this PESTLE analysis of Scotland (Country Profile). There is no doubt that economic factors play an important role in a country’s development. Factors like inflation, domestic and international trading, unemployment rate, and poverty are issues that affect the population’s well-being.
The Scottish economy is inextricably linked with the rest of the UK’s economy. Most of Scotland’s exports go to the rest of the UK. Similarly, most of its imports originate from the rest of the UK as well (Smith, 2021). Its top imports are gas, office and automatic data processing, power generating machinery, machinery & transport equipment, and apparel and clothing accessories.
Food and beverages, petroleum and chemicals, industrial machinery, and wholesale of agricultural products, fish, and crustaceans are some of Scotland’s top exports. Its top trading partners apart from the rest of the UK, are the Netherlands, Norway, China, the USA, Germany, France, and the Republic of Ireland.
There are some challenges facing the Scottish economy. The global lockdowns in 2020/21 affected it badly. Rising energy and raw materials costs, recruitment difficulties, and some supply chain disruptions are also proving to be increasingly difficult.
Social factors that affect Scotland
Scotland’s current population is estimated to be 5.51 million. The Scots are the friendliest and most welcoming people in the UK. Their accent is regularly voted the friendliest as well.
However, there are some social challenges facing Scotland today. According to Findlay (2021) the most pressing crisis facing people are housing and the cost of living. Income inequality, poverty, and food insecurity also affect a lot of people.
Many council areas experienced population decline in the last several years. This decline in population is a concern as it could lead to shortages of labour, and less tax revenue.
Technological factors that affect Scotland
Technological environment is an important part of this PESTEL analysis of Scotland (Country Profile). The use of social networking sites has become a way for people in Scotland to stay connected, share information and opinions with friends, and family members.
Scotland has a thriving tech industry which contributes billions of pounds to the economy. There are a lot of investment and career opportunities in different areas such as cyber security, software and IT, big data, fintech, and games. However, Reid (2022) reports that over 70% of Scottish businesses find that shortages of tech skills impact on their profitability, with particularly critical challenges in advanced technologies such as cloud computing, data analytics, and software engineering.
Environmental factors that affect Scotland
Scotland is a beautiful country with several ancient castles, wilderness, and stunning landscapes. It has a maritime climate and is typically cold but not to the point of being uninhabitable. However, it faces some environmental challenges such as climate change, flood risk, coastal change, water quality and availability, and extreme weather events.
Legal factors that affect Scotland
Legal environment is the final part in this PESTEL analysis of Scotland (Country Profile). Though Scotland is part of the UK, it has its own distinct judicial system and jurisdiction.
However, it must be mentioned that the Scottish Parliament can pass laws on devolved matters – typically issues that affect most day-to-day life aspects in Scotland. On the other hand, the UK Parliament at Westminster has the rights to pass laws on reserved matters that can affect Scotland like the rest of the UK.
In this ‘PESTEL analysis of Scotland (Country Profile)’ six key factors that affect the country have been assessed. These are political, economic, social, technological, environmental, and legal factors. These factors may all have an impact on the future of Scotland and therefore, organisations should consider them seriously when thinking about development strategies.
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Last update: 16 March 2022
Findlay, N. (2021) Comment: Urgent action is needed to fix Scotland’s housing crisis, available at: https://www.holyrood.com/comment/view,comment-urgent-action-is-needed-to-fix-scotlands-housing-crisis (accessed 15 March 2022)
Scottish Government (2022) About Scottish Government, available at: https://www.gov.scot/about/ (accessed 15 March 2022)
Smith, C. (2021) Scotland’s contribution to the UK’s economy, wellbeing and quality of life, available at: https://lordslibrary.parliament.uk/scotlands-contribution-to-the-uks-economy-wellbeing-and-quality-of-life/# (accessed 14 March 2022)
Reid, S. (2022) Generation UK teams up with JP Morgan and Microsoft to address Scotland’s digital skills shortage, available at: https://www.scotsman.com/business/corporate-giants-join-forces-to-help-address-scotlands-digital-skills-shortage-3548060 (accessed 16 March 2022)
Author: Joe David
Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.