Jack Perry, the chairman of Scottish Enterprise, has hailed its restructuring as "a model for the reform of the public sector" as the streamlined economic development body publishes a three-year business plan today.

The 40-page plan signals a radical shift away from local business support, now in the hands of local authorities, towards investment in Scotland's high-growth companies and priority industries.

"This is not about picking winners, this is whole industries where there is evidence that Scotland does have a genuine competitive advantage and can make its living in the future," Perry said.

He said the plan was "a much briefer document than we have published in the past", reflecting a single organisa-tion and the removal of the local enterprise company infrastructure.

"We now have the focus we have been looking for for some considerable time," said Perry, the former Ernst & Young partner and CBI Scotland chairman who began his rallying call for reform soon after being appointed to the job four years ago.

In an earlier blunt speech to businessmen he questioned why Scottish Enterprise was "responsible for everything from rehabilitation of drug addicts to regeneration of the Clyde waterfront", and urged it to ditch its social inclusion agenda to focus primarily on economic development.

He said yesterday he was "delighted" that the reforms had "allowed us to position ourselves quite unequivocally as Scotland's enterprise, innovation and investment agency".

Perry said that hiving-off the skills and training function had transferred out 1200 employees while 260 had taken voluntary redundancy, leaving Scottish Enterprise with 1050 staff. But he added: "Like for like, five years ago we would have had 2000 people, the equivalent is 1050 now. We have improved on just about every productivity measure while at the same time reducing our head count dramatically - I think it is a good model for the reform of the public sector. You will not find many public sector organisations have been quite as rigorous in restructuring and reform as we have."

The agency's skills and careers remit is now with Skills Development Scotland, while local authorities now run the Business Gateway and local regeneration.

Scottish Enterprise's funds will be cut from £329m to £283m over the next three years, reflecting a reduction in its government grant from £265m to £218m, of which £15m will be savings from lower overheads. The government's key industries are energy, finance, food and drink, life sciences, tourism and creative industries.

This year Scottish Enterprise will spend £65m on enterprise, in "proactively account managing 1900 companies" with high growth prospects, accelerating internationalisation and inward investment, and supporting the business environment particularly in priority industries.

Some £90m will go into innovation, notably into "more transformational industry projects based on demand".

Another £63m is earmarked for investment in strategic projects such as the Edinburgh Bioquarter, the Clyde Waterfront and the Energetica technology hub in the north-east, and in attracting risk capital through co-investment in companies.

Perry promised "more radical shifts in years two and three" in Scottish Enterprise's focus.

Its chief performance metric is said to be helping its business customers to increase their turnover by more than £400m in the coming year. It also aims to increase business investment in research and development by up to £60m, and to attract from the private sector more than double its own stake in high-impact ventures.

Perry said Scottish Enterprise's investment of £23m (over 15 years) in the bioquarter (commercial research centre), for instance, should be the catalyst for £250m from the private sector, and its £35m investment in large company research and development had leveraged more than £135m in potentially mobile capital.

"In the past most of our measures were about activity, we are increasingly trying to make them about output, economic impact and leverage," Perry said.

He concluded: "We have set ourselves some very ambitious targets for the year in terms of helping Scottish companies grow and in attracting new investment to Scotland, particularly when we will be operating in a very challenging economic climate.

"It is now time to deliver, and we remain ambitious in our plans to work with our partners to help develop a truly sustainable and successful Scottish economy."