Scottish Cities: Driving Scotland’s Economic Future Together

October 30, 2025


The Scottish Cities Alliance is pleased to announce the publication of the third edition of the Scottish Cities Outlook Report, providing a comprehensive analysis of the contribution Scotland’s eight cities – Aberdeen, Dundee, Dunfermline, Edinburgh, Glasgow, Inverness, Perth and Stirling make to the Scottish economy.

Together, Scotland’s cities account for over 56% of Scotland’s economic activity and are home to more than 2.36 million people, rising to 3.51 million when including surrounding Travel to Work Areas. These cities are not just economic engines—they are hubs of innovation, culture, and resilience. The updated analysis explores the challenges and opportunities facing our cities and highlights the strength of collaboration and partnership working taking place across Scotland to address and capitalise on them.

Cities at the Core of Economic Growth

Scotland’s cities are magnets for talent, innovation, and investment. Edinburgh and Glasgow lead in Gross Value Added (GVA), supported by strong sectoral diversity and world-class universities. Smaller cities like Perth, Stirling, Dunfermline and Inverness are also demonstrating how targeted investment in infrastructure and education can drive growth. Despite their strengths, cities face shared structural challenges that require coordinated action across all levels of government.

Five Grand Challenges Shaping the Urban Future

  1. Economic Growth & Productivity

Boosting productivity is essential for Scotland’s wellbeing economy. Cities like Edinburgh and Glasgow continue to lead in GVA growth, supported by strong sectoral diversity and innovation ecosystems. Perth is also demonstrating how smaller cities can drive growth through targeted investment in infrastructure and regeneration.

2. Technological Change

Digital transformation is reshaping our cities. Initiatives like Stirling’s Techscaler and Edinburgh’s FinTech ecosystem are driving innovation and skills development. However, cities face challenges in digital infrastructure, skills gaps, and funding predictability.

3. Net Zero Transition

Cities are leading Scotland’s green revolution. From Aberdeen’s hydrogen hub to Dundee’s Water Resilient partnership, local authorities are pioneering sustainable infrastructure and clean energy solutions. Yet, grid connection delays and infrastructure bottlenecks are slowing progress toward net zero goals.

4. Demographic Change

Scotland’s ageing population presents long-term challenges. Cities must attract and retain young talent through quality housing, education, and vibrant urban environments. Projects like Edinburgh Strategic Sites Programme and Dunfermline Learning Campus are examples of proactive planning to meet future needs.

5. Tackling Inequalities

Housing shortages, homelessness, and economic inactivity remain pressing issues. Initiatives like the Fairer Futures Partnership in Glasgow and Dundee are testing holistic approaches to child poverty, while Inverness housing strategy integrates affordable housing with major infrastructure projects; however, reform and long-term investment are essential for systemic change.

The Importance of Collaboration and Coordination

The report underscores the importance of Regional Economic Partnerships (REPs) and cross-city collaboration. Cities are increasingly working together and with national government to align strategies, share best practices, and deliver inclusive growth.

To succeed, the report highlights the need for:

  • Stronger collaboration between cities, governments, and institutions.
  • Predictable, long-term funding to support strategic planning.
  • Investment in housing, infrastructure, and skills to unlock growth.
  • Support for inclusive, place-based development through REPs.

Looking Ahead

As we navigate economic uncertainty, climate change, and demographic shifts, Scotland’s cities remain optimistic and ambitious. The Cities Outlook Report is a testament to the resilience and creativity of our urban centres. It also reinforces the need for joined-up governance, long-term investment, and empowered local leadership.

The Scottish Cities Alliance will continue to champion our cities—supporting innovation, driving inclusive growth, and ensuring that every city can contribute to a prosperous future for Scotland

“This report underscores the pivotal role Scotland’s cities play in shaping the nation’s economic future. It serves as a compelling call to action for enhanced collaboration across local and national government, the private and academic sectors, and our communities. Our cities are not only engines of economic growth—they are hubs of innovation, resilience, and transformative change.”

Cllr Raymond Bremner, Chair of Scottish Cities Alliance, Leader of Highland Council (Inverness)

“The Scottish Cities Outlook 2025 underscores how far Scotland’s urban economies have come since the shocks of the early 2020s. The evidence in this year’s Cities Outlook highlights both the scale of the productivity challenge and the potential emerging from clean energy, digital, and advanced manufacturing clusters. Aligning city-level investment with national missions such as NSET and net zero will be critical to sustaining momentum.”

Fraser of Allander Institute

For more information and to download the full report: Fraser of Allander Scottish Cities Outlook Report 2025