The next 10 years will be Scotland’s ‘digital decade’ according to a Scottish Government minister tasked with boosting the tech sector as part of a new national economic development plan.
Ivan McKee, business, trade, tourism and enterprise minister, has vowed to continue enabling businesses to move more activities online after government intervention during the pandemic.
Mr McKee said over 5,600 businesses have been supported through a £50m digital boost programme, unlocking over £60m of private sector investment, set up in response to Covid.
At a digital economy briefing event in Edinburgh on Wednesday he said the Scottish Government was planning further support in the form of a ‘digital productivity fund’ – to help firms continue to harness the benefits of tech.
He said: “Our commitment to supporting everyone to participate and thrive in this digital economic transformation is assured. True digital business transformation requires a digital culture, to drive tech adoption and bring significant benefits to productivity, innovation and of course reducing carbon emissions.
“To deliver this is part of the national strategy and we’re planning a digital productivity fund to focus on supporting businesses, to improve firm level productivity through the adoption and successful integration of new and advanced technologies. We will also develop programmes of action to improve digital understanding and adoption in sectors where business models have been transformed rapidly due to new technology.”
The Scottish Government published its National Strategy for Economic Transformation in March, and Mr McKee explained how it will support the refreshed Digital Strategy, unveiled last year.
Addressing an audience virtually at Dynamic Earth in Edinburgh, he said the plans ‘align well’ and specifically referenced a series of new ‘tech scalers’ around Scotland to support tech startups.
He said the supplier for the national network – recommended in former Skyscanner executive Mark Logan’s Scottish Technology Ecosystem Review – will be unveiled over the summer.
The £45m plan aims to create 300 high-quality startups hubs in Edinburgh, Glasgow, Dundee, Aberdeen and Inverness – where tech founders will receive world-class mentoring and training.
A separate tech ecosystem fund has already provided £1.2m of support to over 30 organisations spanning the private, public and third sectors. The fund has made strategic investments in the ecosystem’s ‘social infrastructure’ through a range of meet-ups, events and projects including a range of events specifically targeted at women, creating the “best possible network and environment for our funders and startups to succeed”, Mr McKee said.
The in-person event heard from Colin Cook, the director of economic development at the Scottish Government, who drilled down into the detail of the new economic transformation plan.
He said the 10-year commitment reflected some of the economic challenges facing Scotland, including climate change and the transition to Net Zero, Brexit, unequal wealth distribution and low productivity. He referenced also some of social policy aspects of the strategy, to improve wellbeing, equality and inclusion.
“Digital has the power to be a great democratising technology of our age but if you don’t ensure that everyone can use it, then it has the opposite effect and it’ll end up excluding people and making their lives difficult,” he said.
Digital should no longer be recognised as a ‘blanket sector’, he added, and that the five policy programmes and one delivery programme enshrined in the economic transformation strategy reflects that. The first programme – focused on supporting entrepreneurship – aims to provide more encouragement to people who want to start a business, and so that children and young people can have that aspiration.
The second programme is focused on new markets and sectors, particularly around Scotland’s natural advantages, such as wind energy but also on emerging technologies such as quantum and biotech; the third is on productive regions and businesses, and particularly aims to solve the ‘longstanding’ challenge around productivity where Scotland lags behind European competitors; the fourth programme will address skills and in particular trying to embrace a new mindset to skills acquisition and flexibility allowing people and companies to respond more quickly to new technologies; the fifth programme is around fair work to ensure people receive the real living wage and have a stake in future economic success. The final sixth programme is around delivery, as ministers attempt to implement their vision. To that end, Cook referenced the recently established 12-person Delivery Board, co-chaired by finance secretary Kate Forbes and Barry White, former chief executive of Scottish Futures Trust, which will make sure everyone involved in the delivery of the strategy ‘live up to their promises’.
Industry expertise
The briefing event, chaired by BBC journalist Kim McAllister, was supported by academic and industry experts who came together to contribute their own viewpoints on how Scotland’s economic fortunes can be transformed by the development of new technologies and innovation. Peter Mathieson, principal and vice chancellor of the University of Edinburgh, gave an overview of the city region deal which has sought to position Edinburgh and south east Scotland as the ‘data capital of Europe’.
Professor Mathieson said how the university is just three years into a 10-year programmes which is bringing on stream new facilities focused on digital and data technologies, including the health-focused Usher Institute, the Edinburgh Futures Institute, the already opened Bayes Centre – an innovation hub for academia and industry – the National Robotarium at Heriot-Watt university and the Edinburgh International Data Facility at Easter Bush, which is home to the UK’s largest supercomputer. He described how the challenge with that work, though, is to ensure that students fully understand the opportunities unfolding before them, and to ensure that the research that goes on within universities has real-world impact outside their walls.
He said however that there is a growing trend within his own university for students to create startup companies – helping to commercials much of that research work and generate economic impact. Edinburgh University created 102 such spinout companies last year, a record among the UK’s leading Russell Group universities, he said, and has also recently benefited from a ‘very major exit’ (selling off a startup firm), of which the proceeds were re-invested back into the entrepreneurial ecosystem. He said that universities the world still need to better at setting the right incentives and ensuring they don’t inhibit innovation.
The Scotland 5G Centre – a national innovation centre which aims to support business adoption of next generation 5G connectivity, which will increasingly play a role in automation in manufacturing, and developing the next wave of internet innovation, through the ‘metaverse’ and augmented and virtual reality technologies – was also represented at the event. Paul Coffey, its chief executive, said how the centre is embarking on a national series of seven 5G hubs across the country, which will go live by September. The aim of those is to support local industries to adopt and experiment with potential use cases in their own fields for 5G technology.
However Coffey said the future for advanced connectivity will have to rely on more intervention from government, as the current business models for mobile network operators to invest in more remote and rural areas do not work. He said there needs to be more sharing of infrastructure and pooling of resource among those businesses in communities that require advanced connectivity in order to deliver the infrastructure sustainably.
The event culminated with a panel discussion focused on how academia, industry and government can work together to support innovation and the adoption of new technologies. Sara Thiam, chief executive of the Scottish Council for Development and Industry (SCDI) was joined by Jacqueline Redmond, chair of CENSIS, one of Scotland’s innovation centres focused on sensing and imaging technology. She also sits on the board for the Scottish National Investment Bank (SNIB) and is executive director of the Strathclyde University-based Power Networks Demonstration Centre. Ashley Lumsden, director of government and public affairs at Huawei, represented the telcoms giant on the panel.
Thiam said how SCDI had been formed in the 1930s in response to the stock market crash and global depression, to provide a joined up response between civil society and business to help people in a crisis. She said how its mission hadn’t really changed in the intervening 90 years, and it was still engaged in trying to make the connections between the parts of the economy that can stimulate growth and development. In the context of innovation and technology she said she saw a real opportunity for Scotland to become a global leader in purposeful business, developing businesses that can be both profitable and solve some of the big challenges of our time, including climate change.
She said key to that would be ensuring that Scotland has the right systems and networks of modern, high quality public services and the right strategy and regulation in place that rewards productive and purposeful growth in areas like ethical finance, artificial intelligence and data and net zero solutions. Redmond talked about the need to ensure we have the right collaboration infrastructure in Scotland – something she thought would be best delivered by government. She said at the moment Scottish universities were not collaborating as well as they could, and there was also a need to improve the image of careers in technology, as engineering in particular continues to be regarded as less attractive as career paths for young people.
Lumsden, whose company has a research footprint across campuses in Scotland – including Edinburgh and Glasgow – said Huawei is actually itself a startup company, in relative terms, having been established only 30 years ago. He said however how the aim of the global technology firm was to support research and development, and that of its 200,000 employees around the world, around half of them are engaged in R&D. Lumsden said how the UK would benefit however from more long-term, strategic links between academia and industry – with independent support from government to give R&D activity greater ‘stability’. He said the reason Huawei invests so heavily in R&D is because it recognises the value of innovation in creating the next generation of products and services. In that context he said Scotland was a perfect test bed for innovation as it has the diversity of dense urban and rural, coastal, remote and island communities which provide a fantastic ‘petrie dish’ for testing connectivity and new technologies which can then be exported around the world.
