New £2bn national bank sets digital aims as part of ‘mission-oriented’ approach to investment

Scotland’s digital infrastructure and technology-enabled health and care sector stand to benefit from a major new £2bn national investment bank.

Plans released for the Scottish National Investment Bank (SNIB) show that as part of a ‘mission-oriented’ approach to financing projects that align with strategic government goals, digital technologies form a significant part of those long-term aspirations.

The core missions focus the Bank’s activities on addressing key challenges and creating inclusive, long-term economic growth. This will enable the Bank to play a significant role in supporting Scotland’s economic recovery from coronavirus (COVID-19).

The proposed missions aim to support:

  • the just transition to net zero emissions by 2045
  • creating opportunities and reducing inequalities
  • harnessing innovation in response to demographic challenges

However, a detailed look at the missions, which will be even more relevant after the shock of COVID-19 to help support economic recovery, reveal that digital is key to the 29-page set of proposals.

It includes an endorsement from the industry group the The Scottish Council for Development and Industry (SDCI), which is backing investment in digital health and care. The business body recommends a focus on technological innovation in a bid to ‘transform health & social care to save lives’.

The Bank will be operationally independent and the document makes clear it will determine how it will invest to meet its missions; however some of the top-line objectives reference how many of those aims align with government National Performance Framework (NPF) goals, including Realising Scotland’s Full Potential in a Digital World: A Digital Strategy for Scotland and Scotland’s Digital Health and Care Strategy; as well as to develop an artificial intelligence (AI) strategy for Scotland.

Some of the areas it proposes investing in include:

  • Assisted living and flexible housing;
  • Medical technologies and technology enabled care;
  • Automation while supporting changing skill needs;
  • Life sciences;
  • Data driven innovation;
  • Digital capabilities and infrastructure.

Economy Secretary Fiona Hyslop said: “The Scottish National Investment Bank provides a unique opportunity to influence the direction of Scotland’s economy. It will play an important role during recovery from COVID-19 through long-term investment in our businesses and communities.

“These proposed missions will steer the Bank’s investment strategy to address the big challenges facing Scotland – a very different ethos to that typically followed by private investment institutions. There is extensive support for this approach and a significant appetite from Scotland’s investment community to co-invest with the Bank.

“By supporting innovation, driving green development and promoting inclusive economic growth, the Bank can help deliver our vision of a globally competitive, sustainable and fairer economy.

“The Bank’s launch will lead a step change in our measures to boost Scotland’s economic growth.”

The Bank is on schedule to launch by the end of the year, and the Scottish Government has committed to capitalising the Bank with £2 billion over ten years. Benny Higgins, the former Tesco Bank chief, played a pivotal role in establishing the bank, which was influenced in its mission-led approach by economist Mariana Mazzucato. Willie Watt, former CEO of fund management company Martin Currie, has since been installed as the bank’s first Chair, with Eilidh Mactaggart appointed as the first CEO after a 20-year career in investment banking, including as European head of investment management for the US insurance giant, MetLife and other roles at Commonwealth Bank of Australia and ABN Amro Bank N.V.

The appointment process was overseen by a panel including Willie Wat, Liz Ditchburn, director general for economy at the Scottish Government, Mr Higgins, a strategic adviser to the First Minister and, Lesley Knox, former chair of V&A Dundee and Alliance Trust and a non-executive director of Legal & General Group.

At this stage the proposals are to be laid out in the Scottish Parliament for consultation for 40 days and further detail may be revealed in next week’s Programme for Government (PfG).