"Doubters and cynics" must stop talking down Scotland's economy, the first minister has warned.

Jack McConnell said he was determined to see the country's economy grow despite the problems facing businesses north of the border.

In his first major speech to business leaders, he also stressed the importance of stemming the brain drain and increasing the country's population.

We will not grow the Scottish economy if we are continually negative and pessimistic

Jack McConnell First Minister

However, the Scottish National Party warned that ministers must not merely "pay lip service" to solving the problems facing Scotland's economy.

Mr McConnell was speaking at an Institute of Directors lunch in Edinburgh on Tuesday.

He said: "I am acutely aware that successful enterprise underpins our public services.

"The private sector is the wealth creator in Scotland today, generating the jobs and prosperity that sustains the public sector.

"It is easier to close gaps in opportunity if we have a growing cake - rather than trying to do more and more with an existing set of resources."

Negative attitudes

He said that was why creating growth was so important for Scotland.

"I want to say to the doubters and the cynics - stop talking Scotland down," he continued.

"The habit of doing down Scotland - our abilities, our performance and our potential - can impact on our future."

He said some business leaders had voiced concerns that the negative attitudes of some politicians and commentators could have an impact on future investment decisions.

The Scottish economy is in recession

"This is serious. Let's lift the level of debate and start talking about what we can do rather than what we can't.

"We will not grow the Scottish economy if we are continually negative and pessimistic. Young Scots need to feel proud of their country and have belief in their future.

"There is much that is positive about Scotland today and it is my job to talk Scotland up."

Mr McConnell said a growing population was necessary to create a growing economy.

"My vision of Scotland in the future is one where we lift our eyes to the horizon and look outwards.

Financial independence

"We must keep the talent we have, attract ex-Scots back home and be open to welcome people from new cultures and backgrounds," he said.

SNP leader John Swinney MSP said Mr McConnell had "woken up" to Scotland's economic underperformance.

"What he must realise however is that paying lip service to the problem is no substitute for hard action to actually address these problems.

"This must include placing Scotland at a competitive advantage to the rest of the UK and Europe," he said.

"We need full financial independence so that we can focus our policy on cutting taxes on growth and reversing the trend of people, talent, businesses and wealth migrating out of Scotland instead of in."

Restoration of uniform business rate at this time will be an essential first step

Annabel Goldie Tory spokeswoman

The Tories want the first minister to announce the return of standard UK business rate levels to Scotland.

Enterprise spokeswoman Annabel Goldie told Mr McConnell: "It is of paramount importance that you recognise the need to lift both devolution and the Scottish economy out of the mire.

"Restoration of uniform business rate at this time will be an essential first step."

However, Mr McConnell denied that there was an additional burden on Scottish businesses.

He said that while the taxation rate was higher north of the border, rateable values had risen considerably less than those in England.

However, he told business leaders that the Scottish Executive was listening to representations on the subject.