Kenny Farquharson: We must bank on an unknown future

SOME years ago I had a wee argument with an uncle of mine. It was the kind of disagreement that starts off as casual chit-chat about politics and quickly gets out of hand.

A big man and a practical man, he'd spent all his working life in the maintenance departments of various Dundee factories – I remember him explaining how he'd rigged up a system of electronic blinds in a boss's office so that they shifted position throughout the day to follow the sun. This particular evening he was lamenting the decline of Scotland's manufacturing industry. Never one to pass up the chance for a barney, I stuck my oar in.

The old glory days of manufacturing were worth celebrating as a symbol of Scottish pride, I said. But these days we needed to judge our economy by how far and how fast we'd moved away from metal-bashing. The future for Scotland was as a world leader in industries like finance.

Let's just say he and I had a candid exchange of views. And although our falling-out didn't last the evening, I'm sure that if he was alive today he'd take great pleasure in casting this conversation up to me. He'd point to the chaos that has denuded Scotland of one of its great financial institutions, putting tens of thousands of jobs at risk. And, dammit, I'd have to concede he had a point.

Scotland, it seems, has no place of shelter. When it became clear we could never compete with the developing world on manufacturing labour costs, we sloughed off our industrial past and embraced electronics. We put our faith in shiny new premises built by companies such as Chunghwa, Viasystems, National Semiconductor and Motorola, only to see factories close and tens of thousands slung onto the dole. Nobody told us Silicon Glen would be vulnerable to its own version of the Clearances.

Financial services seemed to offer both respite and hope. After all, this was a Scottish industry with a centuries-old tradition of excellence and innovation. Scottish prudence, Scottish canniness and even the Scottish accent were internationally trusted commodities in the banking and insurance sectors. And if there was something deep in our national psyche that still longed for the satisfaction of making something, then we could acknowledge it, and try to divert it into making deals. With the thundering hooves of Lloyds TSB now within earshot of Edinburgh, we know to the country's cost that at least some of this confidence was self-delusional hubris.

So what are the lessons we should take from a grim week for Scotland? As Peter Jones points out today (Page 13], it would be a mistake to perpetuate a victim culture that absolves HBOS executives of any responsibility for their own demise and blames a conveniently despicable scapegoat – the 'spivs' and hedge fund managers of the City of London. Regrettably, Alex Salmond comes close to this hand-washing position in his comments this weekend.

Where the First Minister is on firmer ground is in questioning whether enough was done to protect the bank's independence. There is a genuine debate to be had about how all this might have played out if Scotland had been an independent country. I suspect more would have been done to ensure the bank survived as a Scottish-based, Scottish-run entity. Gordon Brown did what he could to secure headquarters functions in Edinburgh, but this is one of those occasions when 'the national interest' varies depending on whether the nation you're talking about is Scotland or the United Kingdom.

There's a limit to how relaxed we can be about losing headquarters functions in Scotland – especially when it comes to utilities and the fundamental building blocks of the Scottish economy. If the final judgment is that independence would have served Scotland better in this instance, it's by no means a clincher in the case for a separate state, but it's a lesson that cannot be ignored.

Away from the political debate there are, dare I say it, more important lessons to be learned. How do we prepare ourselves and our children for a tempestuous world increasingly at the mercy of financial uncertainty, energy volatility, political upheaval and environmental calamity?

Earlier this year my elder son had to sit down and choose what subjects he wants to study for his Standard Grade exams. It's one of these moments as a parent when you are acutely aware of how small decisions can have lasting consequences. What if the choice of subjects turned out to be a mismatch with his interests and talents? What if the subjects ditched were actually the ones in which, given time, he could shine?

My son's dilemma was the same one Scotland itself faces. How can he best prepare for a future where he'll work with tools that haven't yet been invented, in a job that doesn't yet exist, producing goods and services that we cannot yet imagine? The rationale behind his final decision told a story about the times we live in, and the times that are likely to lie ahead. In my son's case, it meant the first subjects he ticked were computing and business studies. They haven't yet devised a Standard Grade in the other essentials: resilience, charm and a firm handshake.

If one of the lessons of the HBOS saga is that there are no safe havens in the 21st-century economy, then it's a lesson worth learning. Scottish education is undergoing a massive shift in emphasis away from studying subjects and towards teaching our children to be good learners. We need to be rigged up so we can shift position to follow the sun.