1.                  How does the Government drive research and innovation in our regions?

 

The Scottish Government recognises the vital role of the research and innovation (R&I) in delivering our national and regional ambitions across a number of our key policies and strategies.  These include Scotland’s National Strategy for Economic Transformation (NSET), National Innovation Strategy and Green Industrial Strategy.

 

In developing policies centred on or heavily influenced by R&I, we have identified a number of consistent policy challenges. In particular, through our National Innovation Strategy, we investigated key sectors in which Scotland has a strong research band/or business base and where R&D drives and delivers competitive advantage and economic growth.  Details can be found here: Innovation strategy: economic evidence paper - gov.scot and the National innovation strategy 2023 to 2033 - gov.scot.

 

The Scottish Government is committed to driving R&I and demonstrates this through a series of cross-cutting national and regional initiatives.

 

Nationally, we recognise that universities play a critical role in creating competitive advantage for Scotland’s economy.  They provide a source of new business start ups and scale ups and the ability for more established industries to innovate to address the productivity gap.   We also recognise that Universities and colleges are central to the definition and delivery of regional economic priorities and, through this, impact directly on regional economies, communities, and environments..

 

This commitment is demonstrated in funding that supports high-quality research and knowledge exchange across Scotland, increasing the investment in HE capital (which includes funding for research) to over £350m for FY 24-25. Additionally, through the delivery of the National Innovation Strategy’s Research Commercialisation programme we are working closely with our universities and industry partners to support the commercialisation of innovative research to create and scale high growth spinout companies, maximising their research potential, transforming R&I to new products and business that benefits both society and the economy.

 

The Scottish Government is supporting R&I in a number of ways including:

 

        Investment through the Scottish Funding Council (SFC) in initiatives such as Innovation Centres, Alliance for Research Challenges, Interface and Converge. These have allowed us to establish a critical mass of excellence in priority areas across academia and businesses;

        The delivery of the National Innovation Strategy, published in 2023, which takes a cluster approach to our innovation priorities and is now reflected in a delivery programme to build and support clusters in key innovation areas, delivered through partnerships between industry, universities and the public sector.  Or aim is to ensure that all relevant stakeholders, including education institutions, communities, businesses, and citizens can engage in innovation. Specifically, we are now implementing a Cluster Development Programme to build world leading excellence in those priority areas where Scotland has the educational, industrial, and natural assets necessary to be truly world class – energy transition, health & life sciences, advanced manufacturing, and data & digital.

        Techscalers, our £42m national programme for creating, developing, and scaling tech start-ups. Since its launch, 6 dedicated Techscaler Hubs have been established - in Inverness, Aberdeen, Dundee, Edinburgh, Stirling, and Glasgow. These dedicated hubs have been supplemented by 8 ‘pop-up’ hubs, operated by partners in Clackmannashire, Fife, and the Scottish Borders. The hubs provide places for tech startup activity to take place across the nation. Techscaler hubs are a base for people in the startup community to meet and work from and are a mix of dedicated premises and co-located spaces within our partners' premises. Each region has a dedicated Head of Regional Engagement who is there to support the local community and ensure Techscaler meets the needs of the local ecosystem.

        Funding of a multi-million-pound portfolio of research on environment, natural resources and agriculture. The ENRA research strategy outlines our vision, priorities and mechanisms for funding the current cycle of research which will run from 2022 to 2027. The Scottish Government's Environment, Natural Resources and Agriculture research programme plays a key role in ensuring that scientific evidence is embedded within policy development across a range of government portfolios. For example, the outputs from the programme have been central to designing the Scottish Government's approach to responding to the Global Climate Emergency. It has provided the evidence to ensure that policies are focused on areas where emission reductions will be maximised and that the decisions made are based on the latest scientific evidence. However, its impact is far broader and goes well beyond the development of government policy.

        The £14M Marine Fund Scotland is focused on supporting projects that deliver outcomes relating to Scotland’s Blue Economy Vision, which was published on 31 March 2022. The funding can support eligible individuals, businesses, organisations and communities to deliver projects which contribute to an innovative and sustainable marine economy, reducing carbon emissions and supporting coastal communities.

        Scottish Marine Energy Research (ScotMER) Programme which provides £3.2M pa for research and innovation collaborations into issues around offshore renewable energy. Partnerships are forged between academia, industry, statutory nature conservation bodies (SNCBs), environmental non-governmental organisations (NGOs) and the Scottish Government (marine science, planning and licensing colleagues).

 

 

Regional Economic Partnerships are the key vehicles for identifying regional economic strengths and opportunities.  These collaborations are led by local authorities, the private sector, education and skills providers, our economic agencies, and the third sector. They have a broad oversight of regional activity, including the impact made by City Deals and the links to Further and Higher Education.

 

The Scottish Government is committed to supporting the architecture of regional economic partnerships (2024/25 Programme for Government) and work is underway to consider how we can provide greater regional empowerment within the context of broader public service reform.  Support for regional activities includes:

 

         The Scottish Government’s commitment of over £1.9 billion to deliver the City Region and Regional Growth Deals programme. Of this, over £283 million has been committed to projects which have an innovation component. Projects supported through the Deals are taking forward world-class research and innovation in a wide range of national and regional priority areas driving economic growth by supporting industry collaboration, skills development, and entrepreneurship.

         Investment Zones (IZs), aimed at leveraging research and innovation strengths to boost productivity and increase innovation within their respective regions. They will focus on growing knowledge-intensive clusters linked to research institutions, building on existing strengths while promoting strategic fit. The Scottish Government have negotiated a partnership approach with the UKG to deliver IZs in Scotland, and have developed an objective and evidence-led place selection methodology that resulted in Glasgow City Region and the North East being selected.

         Scottish Government / UK Government joint delivery of Green Freeports.  These aim to support businesses to create high-quality, well-paid jobs; promote regeneration; support innovation and make a significant contribution to achieving our net zero ambitions. Within their business case each Green Freeport has provided an Innovation Strategy. The commitments made by the Green Freeports in their business cases will be subject to robust monitoring and reporting requirements, enshrining their commitments across a number of key dimensions

 

These programmes demonstrate the economic, social, and environmental value of utilising regional strengths and expertise to support the wider R&I ecosystem through partnerships between local government, businesses, and regional universities. For example, Glasgow's regional ecosystem is currently one of the fastest growing in the UK representing a collective enterprise value of £4.1Billion. Leading academic institutions have continued to support innovation, with nearly 30% of the total enterprise value coming from regional university spinouts. This is 1.4 times growth since 2019.  Further details of impact can be found in the response to question 2.

 

Details on the Scottish Government's approach to cluster and regional innovation growth, including unlocking investment at scale and cluster mapping, can be found in our National Innovation Strategy.

Scotland has a comprehensive, publicly funded economic development ecosystem which is integrated into our leading universities and colleges to promote innovation.  In particular, this includes:

 

 

2.                  How does research and innovation in our regions drive growth and prosperity in those regions?

 

As alluded to above, we understand that R&I plays a fundamental role in the prosperity of regions and local communities. There are a number of examples of how recent R&I programmes from both Governments have had tangible impacts to their localities:

 

 

Scotland have been highly successful at leveraging funding from UKRI’s Strength in Places Fund (SIPF).  Of the 12 full-stage projects awarded a total of £314m through the Fund, Scottish-based institutions are leading three of them at a total value of £82m (26% of SIPF). In 2017 a study investigating previous ENRA research cycles estimated that the programme contributed £151.8 million GVA to the Scottish economy a year and supported nearly 1,500 jobs.

 

These impacts were achieved through a wide range of channels. For example, the deployment and utilisation of research funded through previous programme cycles has led to improvements in plant and animal health and genetics, which in turn have boosted agricultural productivity. A number of projects funded via the programme have also led to the creation of spinout companies and wider commercialisation activity which has had wider economic benefits.

 

The research programme also directly supports Scotland's academic research base. It supports hundreds of highly skilled research jobs and provides a stable funding base that enables institutes to leverage significant additional funding from other UK and international funders into the Scottish economy. In 2018-19, external income leveraged as a result of the research programme was £28 million, equivalent to c. £0.60 returned for each £1 invested.

 

The evaluation of the Rural Affairs, Food and Environment Research Programme highlighted key benefits including an estimated £470 million to £680 million (£2022) based on monetising eight different types of impact. This figure includes the economic benefits of gross value added from jobs and spin-outs, income generated from intellectual property and the reduced impacts of animal diseases (specifically sheep scab). It also captures the environmental benefits of reduced greenhouse gas emissions (from changes in diet resulting from a food swap tool) and social benefits associated with jobs provided by the Programme, new skills and the return on public investment in research. The total estimated benefits are greater than the costs of £279 million, and still, the actual value of the Programme is likely to be even higher. Some benefits will take time to be realised and are not yet apparent.

 

 

 

 

3.                  How is research and innovation diffused or supported to drive productivity and growth in the regions, wherever it may come from? 

 

A range of activities are being undertaken to support R&I regionally to drive productivity and growth.  As described above, this includes Scottish Government driven programmes and partnership work with UK Government.

 

We have several universities that are leading efforts to bridge the gap between academia and businesses.  1,243 active spin outs from the university sector generated a turnover of £498m in 2021/22 (HESA 2021/22) and Scottish Government is working closely with the sector to increase both the number and economic impact of these businesses.  As part of the delivery of the National Innovation Strategy, work has taken place on the concept of “Entrepreneurial campuses”, a wide ranging Research Commercialisation Programme and a series of activities to promote an increasingly inclusive entrepreneurial mindset and culture.

 

Within Scottish Government, we are investigating measures on productivity and growth such as through the NSET. This includes looking at evidence of spin-out/ scale-up activities, job creation, financial data, and demographic data of entrepreneurs to overcome barriers in the R&I sector. This has also included international comparison with other nations’ approach – this comparator can be found in the National Innovation Strategy. Additionally, SFC as our national HE and FE funding body are supporting the development of analysis on the impact of the university R&I sector.

 

There are a number of challenges associated with assessing R&I activities in general and a regional level – a primary one being evidence collected and/ or published at UK Government level often does not include distinctions by region for Scotland. In understanding the impact of investment and support, there is a need to recognise that the R&I sector is cross supported by a range of activities and funding including underpinning foundational research and initial knowledge exchanges between universities, businesses and the private sector Gathering evidence of the overall impact of investment will be a resource intensive process. SFC has conducted some of this for Scottish Government, demonstrating the economic impacts of core university R&I investment and the relationship it has on gross value add, jobs etc., but it is also acknowledged that there is spill over impact of R&D which are harder to quantify. The report can be found here: Value of research and innovation in Scotland - Scottish Funding Council.

 

In assessing tangible outcomes, we need to ensure that there is the right data available at the right level for evaluation and be clear on what we are measuring against within the different systems, which each have a complex ecosystem, and different priorities across the four nations (and internationally).