New world order – why Scottish businesses must navigate uncertainty at home and overseas

Artificial intelligence, generation Z and threats to democracy were all on the agenda at CMS Scotland’s annual business conference, writes Peter Ranscombe.

There was an expectant buzz inside the Edinburgh International Conference Centre as lawyers and their clients gathered for CMS Scotland’s third annual business conference on 2 October. While many were lured by the promise of former first minister Nicola Sturgeon reflecting on her time in politics, it was a tour-de-force about the “promises, perils and pathways” of artificial intelligence (AI) from resident BBC expert Dr Stephanie Hare that stole the show.

Stephanie’s entertaining talk was greeted by gasps of “wow” from the audience after a 30-minute whistle-stop tour of the opportunities presented by AI, along with the “dirty secrets” surrounding its consumption of water and electricity. Her abiding message centred around the need to consider AI within a global context, highlighting the political shifts towards authoritarianism in the US and ongoing concerns about China.

“The UK remains a really important centre for AI – we still have free speech here,” said Stephanie, one of the presenters on the BBC’s AI Decoded programme. “The two tech giants for AI are both authoritarian, I’m sad to say.

“China was always dangled as the bogeyman, but we have built authoritarian tech already in liberal democracies, and now the one that has the big ‘magnificent seven’ – the companies building and underpinning all of the tech on which this country will rely – is itself going authoritarian.

“We have to talk about what that means. What does it mean for Britain? What does it mean for Scotland to rely on technology that’s being built by countries like this?”

Liberal democracies are under threat

Stephanie’s theme about the dangers of authoritarianism in the US was taken up by Nicola, both during her speech and in the ensuing questions-and-answers session with BBC presenter Kirsty Wark, who hosted the conference. Scotland’s former leader warned that liberal democracies were under threat and called for political parties to work together to demonstrate the benefits democracy brings for citizens.

“It’s simply no longer good enough for politicians to assert the merits of democracy in rhetoric,” she warned. “It’s vital and urgent to demonstrate it in practice.”

Nicola compared the current global political upheavals with her youth during the 1970s and 1980s. She concluded that – while she had grown up against a backdrop of the miners’ strikes, the Falklands War and the threat of nuclear apocalypse – the optimism amid the fall of the Berlin Wall and collapse of the Soviet Union had delivered hope.

“It seemed in this period that democracy was prevailing over dictatorship, capitalism over communism, and liberal attitudes over more old-fashioned prejudices,” she said. “It did seem that the momentum behind them was irreversible. It doesn’t feel like that anymore.

“Progress that felt irreversible – on equality, gender, LGBT, race – feels now much more open to question. Consensus that action on climate change is essential is now being questioned much more routinely.

“A period of relative peace across the world has been shattered by the invasion of Ukraine, the brutal attacks on Israel by Hamas and the ensuing genocide – for that is what it surely is – by Israel in Gaza.”

International outlook for businesses

The importance of such vast geopolitical topics to Scotland’s economy was highlighted by Sebastian Burnside, chief economist at NatWest Group. He pointed to Scotland’s trade surplus with the rest of the world, driven by growth in its five top markets: the US, Germany, France, Ireland and the Netherlands, which acts as a hub for imports.

Sebastian highlighted that Scotland’s 3% economic growth since 2019 was lagging behind the 5% posted by the UK as a whole due to lower population growth. The need for migration to help counter Scotland’s falling birth rate was highlighted by many speakers at the conference.

Digging behind the “blunt average”, Sebastian pointed to the disparities between different sectors of Scotland’s economy from pre-pandemic levels, with information and communications technology (ICT) soaring by 37.6%, professional services – including law firms – growing by 29.8% and hospitality climbing by a surprising 11.4%.

In contrast, he pointed to a 49.1% plunge for mining, a 26.5% slump for utilities and a 13.6% drop for agriculture, while highlighting that energy-intensive industries were suffering. “We’re going through a huge energy transition, but businesses in Scotland pay a lot for their energy, a lot more than many of their competitors, and no surprises, that’s showing up in terms of who’s winning and who’s losing,” he said.

While Americans continue to spend their cash, Britons are more cautious, with savings deposits rising. “Be in absolutely no doubt, the financial firepower to move to a different gear on growth is there,” Sebastian added.

Getting businesses ready for generation Z

Will Ullstein, UK chief executive at YouGov, also delved into statistics to give an insight into generation Z, the 13 million Britons born between 1997 and 2010. “They don’t think like the generations before them,” he explained. “It’s an employee, it’s a consumer, it’s a business partner with a different mindset.”

Will underlined gen Z’s focus on the environment, ethics, technology and flexible working. “For the majority of gen Z, sustainability is not a slogan – it’s a baseline expectation,” he said.

While more than 50% of 18- to 24-year-olds use chatbots each week, they still only trust AI to provide answers to general knowledge questions, draft emails and summarise documents, and not for more complex tasks, such as providing medical advice or tips to “spice up your sex life”. “Especially pertinent to our hosts today, only one in five of gen Z think that legal advice is a good use of AI – so I think you’re safe,” Will quipped.

His insight that 30% of gen Z would accept a lower salary in order to work remotely sparked heated debate among the audience and panellists on stage, with many expressing concern about younger people not learning from more-experienced colleagues if they didn’t come into an office.

And his biggest revelation? Gen Z is likely to never eat beans on toast. “When that flashed up on the screen, I have never felt quite as old as I did in that moment,” joked Nicola at the start of her speech. Judging by her audience’s laughter, she wasn’t the only one.