The implications are set out in a new book by two Royal Bank of Scotland economists, Jeremy Peat and Stephen Boyle.

They point out that for all the emphasis on publicly funded programmes most vocational training in the UK is undertaken by employers.

Data for 1997 shows less involvement in vocational qualifications and Modern Apprenticeships by Scottish employers than those in England.

“Very disappointing” is how An Illustrated Guide to the Scottish Economy describes take-up of the Investors in People programme, which will fall far short of the goals set by the Advisory Scottish Council for Training and Targets.

By next year 70 per cent of organisations with more than 200 staff should have achieved IIP recognition and 35 per cent of those with more than 50.

But the figures for last November show only 24 per cent of larger employers meeting the standard compared with 33 per cent across the UK. For smaller organisations the total was a “pitiful” 13 per cent compared with the UK’s 18 per cent.

Peat and Boyle equate skills acquisition with higher productivity, which in turn, by “one of the few ‘laws’ of economics”, leads to improved living standards.

Although Scotland has a good record for higher education graduates, there are serious skills weaknesses “from classroom to shop, office and factory”.

A long-standing reputation for “a guid education” is dismissed as “an accurate portrayal of reality as Oor Wullie and the Broons”.

The guide states that the Parliament has the powers and resources to make a difference, although that not need be by spending more. There has to be a debate about where the money goes. Shifting the balance towards schools and “lower level” training would imply less for higher education.

But it concludes: “What should not be in dispute is the need to meet the skills challenge.”

An Illustrated Guide to the Scottish Economy. By Jeremy Peat and Stephen Boyle. Duckworth pound;9.95.