Scottish Input-Output Expert Users Group Meeting,
10:00am 16th June 2006,
Conference Room D, St. Andrews House
Present:
Karen Turner, Strathclyde University
John Dewhurst, University of Dundee
Hervey Gibson, Cogent Strategies
Steven Findlay, Experian
Maria Melling, Scottish Executive
Donna Hosie, Scottish Executive
Claire Boag, Scottish Executive
Jan Young, Scottish Executive
Stevan Croasdale, Scottish Executive
Apologies:
Iain McNicol, Strathclyde University
Kim Swales, Fraser of Allander Institute
Richard Marsh, DTZ Pieda
Sanjiv Mahajan, Office for National Statistics
1. Introductions
1.1
Since this was the first meeting everyone round the table introduced themselves.
Apologies were received by Iain McNicol, Kim Swales, and Richard Marsh.
2. Remit
2.1
Maria went through the remit of the group, explaining that the main aims are to
understand users’ needs and identify what people are using the Input-Output (I-O)
tables for.
2.2
Everyone was enthusiastic about the group and the expectation is that it will be a
useful way of building up good working relationships between the users and
producers of the tables.
2.3
The group will also be used to help users develop their work, and to promote the use
of I-O tables internally in the Scottish Executive too.
3. Developments in Scottish Input-Output Systems – Maria Melling
3.1
Maria did a presentation on the newly developed I-O system, which is going to be
used to produce the next set of tables. The new system has been developed because
the previous system, which was done mostly in Excel, was becoming inflexible and it
was often difficult to follow the methodology. Excel was also struggling to cope with
all the linked spreadsheets.
3.2
As well as the introduction of the new system, the I-O team have also been striving to
integrate as many of the Office of the Chief Economic Adviser’s (OCEA) outputs as
possible. The GVA and the Exports figures produced for last year’s I-O tables were
consistent with the figures published by the GDP and the Exports branches in OCEA.
There is also an intention to integrate the I-O tax figures with results from GERS, in
the future.
3.3
The new system will replicate the UK process as much as possible, allowing us to
develop our systems in line with UK developments. A combined USE matrix,
consistent with the UK, will now be produced rather than a domestic Use, as was
done in previous years. A decision was made to balance the tables at purchasers’
prices on the new system rather than at basic prices, as was done in the past. Taxes,
margins and imports will then be stripped out in a systematic way in order to produce
balanced tables at basic prices, which are required to produce the analytical tables.
3.4
There is also a new balancing method which allows checking and changing of the data
to be done manually rather than relying so heavily on the RAS process. More detailed
and thorough checking can now be done at an earlier stage giving much more control
over the resultant data. A log of all changes and reasons for change will be kept to
ensure a transparent and comprehensive procedure.
3.5
The system is now mostly carried out using SAS, which is more efficient and allows
for a lot more flexibility. It will now be possible to add or delete rows or columns as
and when appropriate. It will also make it simpler to merge some rows or columns
together, which will be useful for specific requests, and also may be necessary due to
disclosure control issues.
3.6
Another change to the new system is that the tax and margins methodology has been
re-written. Each tax will be looked at separately, making it more transparent.
3.7
The new system is now written and documented, with the raw matrices due to be
completed by end June. New data from the Purchasers’ Inquiry will be used and there
are new data sources for the Government sector also. Publication date is expected to
be November 2006.
3.8
Future developments planned for the I-O tables are to look at revising previous years’
data and therefore producing a consistent time series. Revisions could include
changes to Regional Accounts, methodologies, and definitions, such as SIC
classifications. A detailed and comprehensive revisions policy for Input-Output will
be worked on over the next year to facilitate this development.
3.9
Following the presentation there was a discussion about how closely the Scottish I-O
tables would need to follow the UK tables. Maria explained that the UK tables would
be used as a starting point and the Scottish tables would be produced consistently with
the UK. However if there were valid reasons for the Scottish tables to published at a
different level of aggregation or to reflect some desired Scottish feature then this
would be considered. This has already been done with the Scottish treatment of
Forestry and Fishing for example.
3.10
There was also a discussion about the number of IOCs there are, with a suggestion
that some of the IOCs could be merged together, while others may benefit from being
split up, depending on the users needs. In particular, some of the IOCs within the
electronics sector may benefit from being split.
4. Specific Examples of Modelling Work – Karen Turner
4.1
Karen presented a number of examples of the work she does and how the I-O tables
are used for this. She uses the I-O tables for two different types of analysis. Firstly,
I-O multiplier and ‘attribution’ analysis which looks at the attribution to final demand
by commodity or type of consumer. This uses output, income and GDP. Examples of
recent work done using this analysis is the environmental balance of trade, and the
contribution of the ‘Old Firm’ to the Scottish economy.
4.2
The second type of analysis done by Karen is using the I-O tables as a database for
Computable General Equilibrium (CGE) analysis. For this she usually merges some
of the IOCs together for simplicity. She also extends this work to produce Social
Accounting Matrices, which record transfers of income. Most of these projects are
funded by ESRC, and they include work on the impact to Scotland’s economy by
demographic change, devolution, and the links between energy-economyenvironment.
4.3
Karen uses the Industry by Industry tables and has a requirement for this data every
year, along with FTE employment data and imports matrices.
4.4
Some of the issues she has with the data are their accuracy and comparability over
time, particularly for the smaller sectors, although she acknowledges that there have
been improvements in the construction and balancing of the tables in recent years.
She would also like to see more sectoral disaggregation for certain IOCs, and
compatibility with UK data. Some inter-regional data for Scotland would also be very
useful.
4.5
In terms of sectoral disaggregation, there is a particular demand for waste disposal to
be separately identified in order to do some ‘green’ accounting. In the past Karen has
received disaggregated data for the electricity IOC, which was very useful. Where
there is a policy interest in this work it would be beneficial if some more detailed data
could be provided.
5.
Input-Output Methods to identify Scottish Industrial Cluster
Identification – Hervey Gibson
5.1
The project Hervey Gibson is working on for Scottish Enterprise is using the I-O
tables to identify Scottish industrial clusters, where clusters are geographic
concentrations of industrial and related organisations whose linkages enhance each
others performance. Part of Hervey’s project is to look at comparative advantage,
which is when a country produces a good or service at a lower opportunity cost than
its trading partners.
5.2
Hervey uses the I-O tables as a way of linking industries to companies, which he then
uses to create clusters. He does this by looking for the most distinctive link, then
merges those two industries together into the same cluster, then looks again for the
most distinctive link. He continues to do this until all industries belong to a cluster.
The clusters stop making sense after 114 clusters are defined. The results show that
the textile industry is too disaggregated, and the biggest cluster in the UK is Whisky,
while Social Work and Refuse Collection never cluster.
5.3
Hervey is planning on writing a paper on his findings, which will be forwarded on to
everyone on the I-O Expert Users’ Group.
6. Estimating the Effect of Projected Household Composition Change on
Production in Scotland – John Dewhurst
6.1
The objective of John’s analysis is to disaggregate household demand in the InputOutput tables by age of head of household, and combine this with household
projections to see the effect on production patterns.
6.2
He uses the household column in the commodity by commodity matrix from the I-O
tables and disaggregates it out to 3 different types of household: younger, mature,
older. Young households are those where the head of household is less than 65,
mature is where head of household is between 65 and 74, and older households have a
head of household 75 or more. The household data is disaggregated into these 3
household types using the Expenditure & Food Survey, which is then split into IOCs
using a UK correspondence table, and then adjustments are made for the distribution
and catering industry margins.
6.3
The household projections produced by GROS show that the percentage of mature
and older households is going to rise in the future, as is the percentage of single
person households. When this data is then combined with the household expenditure
data by the 3 household types, it can be used to estimate which industries will face
increased or reduced demand in the future. The results show that Utilities, Social
Work services, Health, and Insurance services are likely to have an increased demand,
while demand for Hotels and Catering, Letting of Dwellings, and Education is likely
to decrease. This information could be useful to policy makers who may want to
encourage companies to produce more of the commodities that are expected to be in
higher demand.
7. AOB
7.1
Following John’s presentation there was a discussion about the frequency of the
production of the I-O tables. John stated that he only required new I-O tables every 3
years, while Karen and Hervey would prefer the data to be updated every year.
Producing the tables annually would keep the continuity and also the corporate
wisdom.
8. Date of Next Meeting
8.1
The group discussed how many meetings should be held per year, and it was decided
that 2 would be sufficient, with one of them being held about a month before
publication to allow for discussion about the final tables. The next meeting will
therefore be in October 2006.
8.2
Due to the balancing being done manually this year there will a lot more opportunity
to discuss specific issues with users. The likelihood is that this will be done mostly
via email.
8.3
Since the new I-O system is coming in to play this year, this will give us the
opportunity to increase the publicity surrounding the I-O publication, both internally
and externally.
Donna Hosie
28th June 2006