As with many other aspects of Scotland, any overview of its economy throws up plenty of contrasts. Historically renowned for its heavy industry, Scotland remains (according to current Scottish Government definitions) 98 per cent rural. More than four-fifths of its population, however, live and work in non-rural areas – even as the country’s tourism industry, a central plank of the now-dominant service sector, relies heavily on depicting it as remote, rustic and unpeopled. Following in a long and honourable tradition, recent Scottish innovators have trumped the world with such hi-tech breakthroughs as the first cloned mammal, Dolly the sheep, and the first ever 3-D computer game. At the same time, communities around Scotland continue to suffer the effects of a decline in traditional industries, from shipbuilding to fishing.

Under the devolution settlement, the UK government reserves control over most elements of macro-economic policy, although the Scottish Parliament has limited tax-varying powers, and is in charge of local economic development, education and training. Within its UK framework, Scotland is a long-time member of the European Union (EU), although it remains outside the 'Euro-Zone' of Economic and Monetary Union (EMU), retaining the pound sterling as its currency. The Scottish Government maintains its own EU office at the organisation’s HQ in Brussels, and is also represented at a European level through bodies such as the UK Joint Ministerial Committee on the European Union, and the EU-wide Group of Regions with Legislative Powers, or REGLEG.

Scotland has the fourth largest GDP per capita of any region of the United Kingdom after London, the South East of England and the East of England. In 2002 this stood at £15,523, or 86 per cent of the average for the United Kingdom, which itself ranks sixth among OECD countries. Unemployment (5.8 per cent in late 2003) remains relatively high by UK standards, augmented by much higher rates in local 'blackspots', often rural or ex-industrial communities.

Around 80 per cent of Scotland’s employees today work in the service sector, which accounts for more than two thirds of GDP. In common with other westernised economies, Scotland’s former industrial and manufacturing base declined throughout most of the 20th century, despite receiving a considerable fillip following the discovery of North Sea oil and natural gas in the late 1970s. Given the country’s longstanding infrastructural bias towards heavy industries, subsequent de-nationalisation in such fields as mining, steel, and energy led to particularly severe economic disruption in Scotland.

The large-scale arrival of electronics manufacturing during the 1990s – the so-called 'Silicon Glen' phenomenon - proved at best a partial panacea, despite the hefty government incentives involved. Many of the resulting jobs were low-skilled and low-paid – and then short-lived to boot, as foreign-based employers shut up shop in the face of global market downturn. Almost a fifth of Scottish manufacturing jobs are still in electronics, however, with the sector as a whole – other key fields being construction, food and drink - contributing some 20 per cent of GDP.

Electronics, together with other such high-tech or 'knowledge-based' industries as biotechnology, artificial intelligence, software design and digital media, form a key focus of the Scottish Government’s post-devolution enterprise strategy. Policies have placed particular emphasis on improving Scotland’s skills base and expanding its international performance, with the university sector regarded as a key economic seed-bed. Beneath a widely-drawn 'creative industries' banner, recent government initiatives have also identified the cultural field as a priority target for development.

Among the country’s longer-standing economic specialisms, fishing (and fish-farming), finance, textiles, hydro-electricity and nuclear power all play a significant role, while agriculture and forestry are important rural employers.

First-time visitors to Scotland will be surprised to find that Scotland has not one, but four types of bank notes: the Bank of England, the Royal Bank of Scotland, the Bank of Scotland and the Clydesdale Bank all have the right to issue bank notes. There is no problem using all four in financial transactions throughout Scotland. However in England, Wales and Northern Ireland the Scottish bank notes are sometimes refused, despite the fact that they are in fact fully legal tender through the United Kingdom.