Collaborations line the backbone of Scotland’s innovation

Adrian Gillespie, CEO, Scottish Enterprise, talks about the reasons Scotland is an attractive place for investment in innovative sectors and the country’s lead role in promoting sustainability around the world.

What sectors stand out as Scotland’s main source of innovation?

There are many areas where Scotland has strengths. One that stands out is the energy industry. As a country that has produced oil and gas for more than fifty years and has been responsible for a lot of innovation—particularly in offshore production—the green transition has been a huge opportunity for us. There has been a tremendous amount of innovation in areas like offshore wind, tidal and wave energy, often based on the expertise that we have in subsea and offshore oil extraction technologies. Scotland differentiates itself through our focus on offshore renewable energy. In fact, the very first groundbreaking offshore wind turbines in the U.K. were off the northern coast of Scotland. There are interesting plans to develop the sector on a grander scale through an ongoing evolution of the technology involved. For example, we could move from fixed assets on the seabed toward floating offshore wind facilities that allow us to go into parts of the ocean previously not suitable. There is enormous potential in energy production in this arena. The transition of Scotland’s electricity generation from coal, gas and nuclear to almost entirely renewable energy stands out. Scotland is an eminent location for green energy generation and all technologies dependent on renewables.

International trade is crucial to us as a country. Achieving net-zero carbon emissions and the internationalization of technologies are huge opportunities. We have tested facilities here in offshore wind that generate clean hydrogen and export it to demanding countries. For example, we recently announced a new study on opportunities for hydrogen export to Germany where there will be a huge demand for hydrogen. This is an interesting emerging area with huge export potential. By applying the knowledge we have in oil and gas in subsea technologies, distribution and wider offshore engineering, we are exploring the potential for carbon capture in offshore storage. This is a fascinating area for us and one that could make massive contributions to reaching net-zero emissions.

We have shown a huge amount of agility in terms of transitioning and integrating digital technology. Notably, the manufacturing sector has made extreme progress, whether that be in manufacturing vaccines or medical equipment. There is a current large focus on advanced manufacturing that Scotland did not have a few years ago, which has been immensely positive. Our size and the fact that we are especially well connected allows us to make decisions quickly and stand out. While we should never be complacent about new variants, there is a determination to make sure we navigate through current challenges and do so in a joined-up way.

What has Scotland done to spur further research and development in its key sectors?
Scottish Enterprise offers direct one-to-one support to companies around innovation in many ways including product and service innovation. We have had a strong emphasis on joint funding of research and development projects for the last six or seven years, which has raised the level of research and development in the country. There is unquestionably an opportunity for Scottish Enterprise to make a full contribution in supporting Scottish companies and inward investors to maximize opportunities around the post-COVID economy and the transition to net-zero carbon emissions.

The government is about to publish its new economic transformation and innovation strategies. There is an opportunity to join all capabilities in the country and focus on the key challenges of our time. Space is a key area and digital medical tech is another. Scotland is solid in emerging areas such as quantum technologies and quantum computing, specifically in hardware, software and enabling technologies. We have developed photonics and lasers that cool atoms to a quantum state so that they behave in ways that facilitate quantum computing, navigation and encryption. While our research goes back decades, we are now coming together to generate fascinating developments in deep technology. Another interesting area over the last five years has been a focus on innovating the workplace. There is a concentration of companies developing a positive culture within organizations based on leadership development, employee engagement and best practices. Having this kind of future-engaged culture within organizations provides an outstanding environment for innovation to prosper. It is key for Scotland to connect all its innovation assets—and its people are its greatest asset. Workplace innovation can mean reworking policies, implementing leadership development or making sure physical spaces are conducive to employee engagement. If one can get these factors right, it can lead to higher levels of international trade.

What kind of collaborative projects to boost innovation are we seeing in Scotland?

We are very focused on developing innovation districts that go beyond the walls of universities and are open to the wider economy. These have attracted investment and allowed collaborative research and development to happen between different disciplines, including industrial partners in areas such as space satellite manufacturing. The districts leverage our fantastic companies, great technology, strong relationship with investors and world-leading academic research. It allows us to innovate at a strong pace effectively by employing all our strengths. We are starting to translate our academic capabilities into economic impact through exceptional collaboration models that allow knowledge and capability transfer in an agile and location-based way.

The $1.3-billion Edinburgh BioQuarter project is an excellent example of finding new ways to capture the capabilities of our academic institutions. The project is a sustained investment program over 15 years that capitalizes on the expertise in life sciences at the University of Edinburgh. We partnered with the university, the National Health Service and the local government to develop an innovation district outside of Edinburgh where a new community is growing. It includes a large regional hospital, the university’s research division and our business facilities that we previously expanded and that are now entering a new phase of expansion. It is a good example of collaboration between health services and universities to attract and benefit companies.

We are currently investing in the new National Manufacturing Institute Scotland, which is the centerpiece of the new manufacturing district beside Glasgow Airport. It is a huge investment that involves advanced manufacturing technologies across all our strong areas of expertise, such as aerospace, food and drink and medical sciences. Part of that will be a new Medicines Manufacturing Innovation Center which again takes expertise originated within our universities. The center is innovating the ways medicines are manufactured to be more efficient, effective and target the end user of specific treatments.
Similarly, we have the Glasgow City Innovation District. It has brought an open culture of research collaboration with industry in areas like digital health, space applications, quantum technologies and renewable energy. Glasgow also houses the Digital Health & Care Innovation Centre that seeks to bring academic research and company expertise together. We are seeing an urban community swiftly growing into an innovation community. In Aberdeen we are creating a global center for offshore energy expertise. The energy transition zone, as it has been termed, will focus on capitalizing know-how in a joint way with industry, academia and innovative agencies. There are many astounding innovations in Scotland in this environment. The collaborative model is well understood in Scotland; there are innovation ecosystems popping up all over the country.

Why is Scotland an attractive place for foreign direct investment?

There are a few areas that form a highly attractive package for investors. We have an educated workforce and an elevated proportion of the population who have tertiary education. There is a strong pool of well-qualified people, particularly in areas that rely on technology, science, digitization and engineering, which is of interest to inward investors. A second attractive factor is our focus on innovation in recent years. We have been particularly successful in attracting research and development projects to the country, which is largely connected to our highly skilled and educated workforce. We are an agile and interconnected country; our public and education sectors are constantly in dialogue. There is a soft landing for companies coming to Scotland due to the connectivity we have between business, government and academia. Our offering is distinctive.

Our life sciences and the higher education sectors are other areas that define Scotland. The number of research-intensive universities in the country per capita is the highest in Europe. We are in the top quartile in terms of higher education research and development compared to other countries in the Organisation for Economic Co-operation and Development. Furthermore, the number of people with a tertiary education in Scotland is the highest in Europe. This has translated into a robust engineering and sciences sector, particularly life sciences. Scotland is at the forefront of developments in pharmaceuticals, precision medicine and digital technologies that enable healthcare to be delivered within the home environment. Recently a Scottish company formed in 2015 called Current Health was acquired by the U.S. company BestBuy. There is also a great deal of innovation and high growth happening in the digital sector. Our core asset is our ability to innovate and do it quickly and thoroughly in a collaborative way.

It is not just about attracting companies to the country but making sure they receive the best services, support and experience that bolsters growth. We know that inward investment is hugely important to Scotland’s level of research and development. Inward investors export to a very large extent, which is extremely important for our economy. We want to make sure that when an inward investor arrives, the aftercare and one-to-one relationship gained through Scottish Enterprise with other organizations is a personal one. These relationships are treasured. We often hear from inward investors that their relationships have grown a lot since they arrived and that they have had a first-rate experience.

What successful international investors has Scottish Enterprise been able to bring to the country?

Mitsubishi Electric Air Conditioning Systems Europe has been an inward investor for many decades. Although they have been here for a while, we continue to invest in our relationship and success. They manufacture air conditioning units that are exported across Europe. We work closely with them on their next generation products that are focused on low-carbon heat. At the 26^th United Nations Climate Change Conference (COP26) we signed a memorandum of understanding with them to intensify this focus and support their research and development financially.  Another inward investor that has generated interest recently is DSM from the Netherlands. They manufacture a feed additive to help reduce methane produced by cattle by 30 percent, which is timely given the methane commitments made at COP26. Another is Q²Solutions from the U.S. that deals with clinical research. It has announced a multimillion-pound investment in Livingston that will create the type of high-skilled jobs we want to see coming to Scotland. Our workforce capabilities were a big part of what attracted them.

What local companies have been the latest hidden champions for Scotland in terms of innovation?

In terms of homegrown successes, a current star player is Intelligent Growth Solutions that looks to meet the challenge of rising food demand. The company has completely revolutionized farming to make it more sustainable. They are going from strength to strength in terms of raising investment and innovating at a growing at pace. We also have Emergency One in Ayrshire that recently launched the world’s first electric fire engine. It was built and designed here in Scotland with support from Scottish Enterprise. Additionally, M Squared Lasers from Glasgow is globally renowned in photonics and quantum technology. It recently announced the signing of a new agreement with European Space Agency to help measure carbon dioxide released into the atmosphere through human activity. These are just a few examples of companies we have supported and that we continue to work closely with.

How has the COP26 advanced Scotland’s green transition?

Between initiatives to move toward net zero carbon emissions and hosting the COP26, it is obvious how much the move to a carbon neutral future is unequivocally intensifying in Scotland. The announcement by Mark Carney of Glasgow Financial Alliance for Net Zero to invest more than $100 trillion towards transitioning global economies by 2050 was a significant development at COP26. It showed the determination and appetite of the financial sector to focus on net-zero investments. This message has been well received in the country. We are well positioned for the transition, and this intensification is going to be a big focus for the nation. We need to move further ahead in developing related technologies and live up to the values of a net-zero nation. This truly defining area for us has been further deepened post-COP26. Scotland is about to launch a new ten-year national strategy for economic transformation. Alongside others, we have been supporting the government in developing the new strategy. We anticipate continuity and some renewed focus. We will see areas such as the transition to net zero, the importance of fair work and a values-led approach to developing the economy continuing into our new plan.

What has Scottish Enterprise done to support companies in light of the U.K.’s break with the European Union?

In the lead up to Brexit we worked very closely with companies that we identified as being particularly affected. We put dedicated support in place in terms of advice and how best to prepare. The international arm of Scottish Enterprise, Scottish Development International, has 34 offices across the world in 23 countries. We advise companies one on one on what markets they should focus on, whether they needed to broaden their market base or how they might navigate the complexities of Brexit. Brexit and conditions caused by the COVID-19 pandemic have made international trade more complicated. Throughout the pandemic, much of the support we would previously have given in the country for international trade was pivoted to online advice and support. This helped a lot of companies open to new market opportunities, despite the challenges. Our support package and international connectivity has made it easier to connect to companies through digital technologies. The feedback from companies has been extremely valuable and positive.

What role do you want Scottish Enterprise to play in regrowing Scotland’s economy?
The opportunities for Scotland to drive innovation and to have innovation lead the green economic recovery from COVID-19 is enormously apparent. Scottish Enterprise, because of its reach into companies, government and innovation centers, could be categorically central in making sure we combine all our key strengths and apply them to the most critical issues in the world today. We can ensure that the country prospers as an economy and that all parts of the country participate in a fair economy felt across all regions and communities. I want Scottish Enterprise to be vital in this transformation. Scotland is surprising in the breadth of its economy. There are things we are well known for, such as whisky production and our role in the energy sector, but there is so much more. The amount of innovation and determination as a country to be at the forefront of the transition to net-zero carbon emissions is something that will be of interest to companies and people in other countries as the global green transition continues.