Welcome back innovation! Long live digital?

industriesTransforming a vision into the compass for new prosperity, Dundee’s V&A Museum of Design captures the renewed opportunity which lies ahead for Scotland’s creative, design, and tech communities. Dundee has the determination to succeed and deliver on its global recognition, a capital for creative industries, media and life sciences.

This determination is evident amongst many of Dundee’s leading entrepreneurs, who are focussed on delivering transformative projects like Creative Dundee and Water’s Edge, Dundee’s new creative hub. The growth and success of any industry, both locally and nationally, is directly connected to the enthusiasm, vision and dedication of its community, a community that’s both open, welcoming and inclusive.

Along with the recent UK Government announcement to create Tech Nation, the new national network of regional tech hubs, Dundee is poised to capitalise on its excellence in games development and creative design. However, Dundee’s newly published Creative Industries Strategy highlights a common issue amongst Scotland’s tech and creative industries; how do you attract, develop and retain the best, most diverse community of talent.

Some may say that one of Scotland’s best exports is its talent, especially when you have a closer look at the location of our graduates in amongst the world’s leading tech companies. With Skills Development Scotland forecasting Scotland’s digital technology sector to grow twice as fast as the Scottish economy, the number of unfilled digital technology positions is not unique to Scotland, but a global issue.

Having had the opportunity to research the growth of the Republic of Ireland’s tech sector, many of the US digital technology businesses have their European Headquarters based in Dublin, and are utilising the full suite of workplace innovation toolsets and team collaboration processes to fulfil their demand for tech professionals.

Although some of Scotland’s key industries like food and drink are starting to report that leaving the EU is one of their biggest worries, its welcoming to note that 26% of companies surveyed in the recent Bank of Scotland Food and Drink report plan to target new markets outside of the EU.

Any business owner recognises the risk associated with working with only one customer, a recognition which the Republic of Ireland realised when the UK decided to leave the EU. Speaking with many of Ireland’s industry stakeholders, businesses across the Republic’s industry sectors are well ahead in their planning to respond to the business challenges which Brexit presents.

A brief review of the guidance available from organisations supporting the growth of Scotland’s businesses highlights limited, qualified advice for owners to understand the implications of Brexit. The Bank of Scotland report also highlighted that Scottish food and drink companies are focussed on boosting their productivity, especially after the Office for Budget Responsibility’s announcement of downgrading growth projections for the UK economy.

With around 47% of mid-size food and drink companies planning to invest more in automation over the next 12 months, and 57% saying they would invest on improving their digital technologies, new business opportunities lie ahead for Scotland’s digital technology businesses, who have developed deep capability in fintech and cyber security, Industry 4.0, the internet of things, artificial intelligence (AI) and data science, and robotics and autonomy.

Some may say that technologies like AI, blockchain, data science and the internet of things are at their peak on the hype curve. But they are the technologies which are the foundation of making life changing breakthroughs in challenges like cancer detection, improving the quality of the air we breathe, and making our transport safer. Credentials which are aligned to the ‘Grand Challenges’ outlined in the UK’s newly published Industrial Strategy.

Recognising the demand for skilled talent in areas like data science, cyber security and AI, the Scottish Government grasped this challenge and backed a suite of projects comprising The Data Lab, CivTech, Censis Innovation Centre, and Codeclan, which are now fully online creating a pipeline of expertise, talent and services.

Along with the newly formed Fintech Scotland initiative, Scotland can be proud it has one of the best integrated tech communities, supporting the growth of transformative research, creation of inspiring innovation and the design of evolutionary products.

Although Scotland has the global trademark of being an innovator, recent commentary from the Fraser of Allander Institute’s Economic Commentary for Scotland highlighted that if this growth is to continue, innovation must be at the heart of everything we do. This commentary is also backed up by the global innovation survey recently published by PA Consulting Group which reported that two thirds (66%) of the 821 business leaders surveyed, say innovation is crucial to survival.

But are we innovating enough to create sustainable growth for our economy? A closer look at Scotland’s Economic Statistics for International Exports reflects the transformation taken place across Scotland’s technology sector. In 2002, Scotland exported £5.570bn worth of computer, electronic and optical manufactured goods. In 2015, exports in this category had decreased by 78% to £1,215bn.

In contrast and reflective of the growth of our Digital Economy, Scotland’s International Services exports for Information and Communications has increased by 251% since 2002 from £330m to £1,160bn in 2015.

As the growth in international exports for technology based services continues to rise, potentially surpassing that of manufactured goods, projects like Edinburgh University’s Bayes Centre – the new hub for data-driven innovation, The Data Lab, Fintech Scotland as well as Glasgow University’s plans to become a 5G technology Campus, provides Scotland’s industries the capability to produce disruptive, innovative services for global markets.

Pivoting towards a service based economy is reflective of the new generation of Scottish tech startups, which have evolved into global businesses.

However, we can’t be complacent of the challenges that lie ahead for businesses, especially when we look at their exposure to cyber-attacks and implementation of the General Data Protection Regulation (GDPR), which comes into force in May.

Having had the opportunity to participate in Edinburgh University’s first non-executive directors’ programme, it’s clear that the boards of all companies must develop and enforce cyber security policies, to manage and govern cyber security risk.

With cyber breaches on the increase, cyber security is becoming an industry in its own right. An industry which the Scottish Government recognises Scotland can create a distinct global advantage, and is reflective of the £6.5m which has recently been allocated from the UK’s National Cyber Security Strategy Programme.

So, as we head into 2018, all of Scotland’s key industries, private or public, need to open their viewpoint and welcome innovation into all levels of their organisation. Whether your flavour is transformation, agile, collaboration or even disruption, now is the time to truly promote Scotland’s trademark as a global innovator and not become a tech nation which a global leader deletes when searching to invest, acquire or procure new services or products.

Alisdair Gunn is Director of Framewire®, which advises corporates, government, tech startups, public sector, and universities on delivering growth through digital transformation, market insight, international development, innovation, business strategy, partnering, technology and equity investment. He is also a board member of BIMA’s Scotland Council, the British trade association driving innovation and excellence across the digital industries.