Innovation Nation: Good Jobs for Scotland’s Future’ sets out a bold, practical plan for Scotland’s political and business leaders – with the aim of making Scotland the best country in Europe to start, grow, or invest in an innovative business.
Scotland has tremendous assets – world-class universities, innovative businesses, a high rate of university spinouts, and an active angel investor community.
But this has not translated into the levels of growth, prosperity and good-quality jobs that Scotland deserves. Too often our innovative businesses leave Scotland when they want to grow. We are not as successful as we need to be in attracting private investment to grow industries of the future. We have lacked a clear political drive to position Scotland as a fast-growing innovative ‘tiger economy’.
Less than a year from the next Holyrood elections, and ahead of the new UK Government’s Spending Review, there is an opportunity to think again about how, together, leaders at Scottish, UK and regional levels can realise Scotland’s potential as an innovation nation.
The Rt Hon Gordon Brown said today:
‘Scotland has long been a nation of ideas. From the steam engine to the Higgs boson, from the birth of modern philosophy in the Scottish Enlightenment to, today, being at the frontiers of precision medicine, we have led when others have had to follow. Three of the world’s top 100 universities are based in Scotland, with world-leading research strengths.
‘Scotland has a £10.5bn life sciences sector, employing 47,000 people and £4.4bn of exports annually. But now we face a stark choice: to continue to drift into a future of low growth, low productivity and missed opportunity — or to act decisively to become a global leader in innovation once again.
‘This report – Innovation Nation – sets out a practical, ambitious, and above all deliverable plan to put innovation at the heart of Scotland’s economic renewal. It builds on Our Scottish Future’s ‘From Growth to Good’ 10 year economic strategy, which sets out how we can – and must – deliver a decade of inclusive economic growth, creating 300,000 new jobs, lifting people out of poverty, and building a fairer, greener, more dynamic Scotland.
‘Across life sciences, clean energy and advanced manufacturing, Scotland has the raw materials of success. The question is not whether we have the talent – we do. The question is whether we have the leadership, the coordination, and the will to turn promise into progress.
‘That is why this report is so important. It offers not just analysis, but a plan: a single, coherent Scottish industrial strategy; physical campuses in our great cities to anchor global innovation investment; new, empowered combined authorities to lead local transformation; and a reformed ecosystem that backs scale-ups, retains talent, and ties innovation to inclusion.
‘It calls for a win-win Scotland – one where we raise the roof and lift the floor. Where we create high-skill, high-wage jobs and at the same time tackle child poverty. Where the fruits of innovation are not hoarded by the few, but spread across our communities and regions. It shows how to make Scotland the easiest and fastest place in Europe to innovate – and why that matters not just for our economy, but for our national cohesion and pride.’
The report summarises some of Scotland’s key assets as we look to build innovation-driven growth.
For instance:
- Three of the world’s top 100 universities are based in Scotland, with world-leading research strengths.
- Scotland has a £10.5bn life sciences sector, employing 47,000 people and £4.4bn of exports annually.
- We have strengths in innovative industries including space satellites, photonics, renewables and precision manufacturing.
- Half of the UK’s most active angel investor networks are in Scotland.
- Scotland leads the UK’s nations and regions on university spinouts per head.
- Scotland is the only nation or region that outperforms London in attracting equity investment for the most promising early firms.
But these strengths are not fully translating into economic growth and good jobs. Reasons include:
- Business investment in research and development is low in Scotland. For every £1 of university research and development, there is around £1.43 of business investment in research. This compares badly with an OECD average £4.73 of business R&D investment for every £1 of university R&D.
- Successful innovative businesses too often leave Scotland when they want to grow.
This has various causes including:
- Access to scale-up capital, with a funding gap of up to £1.5bn between what’s needed and what’s available.
- Lack of facilities to expand into e.g. laboratory space.
- Companies having to navigate a panoply of different government priorities and schemes at local Scottish and UK levels to get the support they need.
- A skills paradox, where innovative businesses are finding it hard to recruit talent while 800,000 working age Scots are economically inactive and around a third of our graduates are reported as having their skills under-employed.
Addressing these challenges, the report sets out a five-step plan to unlock large scale investment in Scotland’s innovation economy, based on new forms of collaboration between the UK and Scottish Governments and private sector investors. These include:
- A single Scottish Industrial Strategy jointly owned by UK and Scottish Governments and regional authorities, with co-ordinated action to boost our key innovative industries including life sciences, green manufacturing and digital exports.
- Physical ‘Growth Zones’ at the heart of Scotland’s great urban areas, attracting public and private investment in clusters of talent and facilities where innovative businesses can grow to become major employers.
- Scottish Combined Authorities for our city regions, providing on-the-ground, visible and accountable leadership to drive growth, as seen in London and Greater Manchester. And these new authorities would be responsible for bringing together the panoply of Scottish and UK support for innovation and economic development, devolved to the city region wherever possible.
- Bring investors, entrepreneurs and universities together to start early potential firms, with a “one stop shop” created to help firms navigate public support.
- Prosperity that works for everyone: talent is spread across Scotland, but opportunity isn’t. New policies should connect innovative firms with communities who have been left out of innovation in the past, boosting equity and efficiency.
