The First Minister wants higher economic growth in Scotland

Speaking to BBC Radio Scotland, he explained what he hopes an updated growth strategy will achieve.

Q: Is the Framework for Economic Development in Scotland (Feds) working?

The original framework for economic development in Scotland that was published in 2000 gave us for the first time in Scotland an overall policy on the economy that could build a national consensus, prioritise economic growth and help improve government policies.

What we have published on Thursday is a far more ambitious and direct strategy that will take forward consistently the original objectives and the original framework but will adapt it to the change in economic conditions internationally and make sure that we in Scotland are focused on the right priorities over the next three or four years.

Q: Is there any evidence that it has worked so far?

We've all come through - not just in Scotland but across the developed world - an extremely challenging four years and throughout that period Scotland's economic growth has been higher than France or Germany and Italy.

We've managed to weather the initial challenges in growth from Eastern Europe, China and elsewhere, but we have to now ensure that Scottish business and the Scottish public sector are more productive than ever before.

We have to make sure we are involved in research, development and innovation in a way that has never been countenanced before, that we invest in transport and education and skills to compete in a very challenging modern world.

And also that we set ourselves ambitious targets like, for example, reversing population decline.

Q: Why do you think we are underperforming relative to the rest of the UK?

Our challenge is to try and close that gap. We need to do that, not just in a UK context, but in a European and worldwide context too.

While we need to close the growth gap inside the United Kingdom, we can only do that by competing better internationally.

Q: In the areas where the Scottish Executive can make a difference, for example business rates, water costs, environmental charges and planning, we are still not tackling the problems. Why?

I could equally point to the massive investment in education and skills that is taking place in Scotland. The fact that we've got the best enterprise education system anywhere in the UK.

We've been investing in modern apprenticeships at a rate that is far higher than the rest of the UK. In transport, we see improvements in roads and railways - new direct air routes to Scotland - at a level that hasn't been seen for more than one generation.

What we have also got to recognise is that we in Scotland cannot just stick our heads in the sand and those that say that we in the Scottish Parliament don't have enough powers on economic growth are simply wrong.

Q: So why haven't you tackled business rates, water costs and environmental charges that have all gone up a lot - about 8% in some cases - and are still higher than the rest of the UK?

We've reduced business in real terms on two occasions since I became first minister. We've driven up, not just standards in quality on water, but levels of efficiency in the water service.

We need to also recognise that we do have the levers in Scotland - levers on education and skills, on transport and infrastructure, on promoting Scotland abroad and investing in research and development.