Innovation debate - Innovation Minister's speech - 20 June 2023

I am pleased to sponsor another debate in Parliament today on Scotland’s economic future and the great work that is taking place to shape the future of our economy and country and quality of life but also of course the planet as well.

 The publication of the National Innovation Strategy – and the timing of this debate – does come at a pivotal moment in Scotland’s long and incredibly rich history as an innovative nation.

We all live in a rapidly changing and truly interconnected world. And the next decade will be one of profound change, and right now we, along with many other nations, face pressing challenges on climate change, as we just heard there at questions and health and the cost of living.

At this moment we have an opportunity to face these challenges head-on and be a global leader for change.

We have the opportunity to build on our achievements of the past and to make the most of our considerable natural advantages, to translate our excellent research base into commercial opportunities and to deliver economic success for every section of the economy and every part of our country.

We must harness the incredible power and potential for innovation in Scotland. It can drive our nation’s journey toward a thriving net zero economy, encourage further international participation to address those pressing global challenges and attract further international investment to Scotland.

So we have the opportunity to once again take our place as one of the most innovative small nations in the world. To take our place with European countries of a similar size, such as Denmark, Norway and Finland, where innovation is a core driver of the national economy.

 That ambition is bold, but everyone is this chamber is aware of Scotland’s strengths in innovation and history of spectacular successes spawned in this country.

 We have a proud and enviable history and tradition of invention and innovation. Our people for centuries have been known as innovators with some of the best scientists and engineers, as well as writers and philosophers, coming from Scotland and helping to change the world.

Scottish innovators and entrepreneurs have been solving global problems whether that’s in energy, health, manufacturing and engineering, creative and digital technologies or a range of other sectors and industries.

Innovation is a key priority for the Scottish Government. Over the last decade we have established multiple Innovation Centres as well as entirely new bodies such as the National Manufacturing Institute for Scotland - which represents a £75M investment by the Scottish Government in the future of Scottish manufacturing - a prime example of how we are supporting industry to innovate.

Besides the Advanced Forming Research catapult, its cutting edge facilities there include a Digital Factory, a Manufacturing Skills Academy and a Lightweight Manufacturing Centre. 

The vision is to be a place where manufacturing businesses, of all shapes and sizes, can explore possibilities, collaborate and find solutions to the challenges they are facing.

I am delighted at yesterday’s statistics around the attractiveness of Scotland for inward investment projects which are absolutely stunning.

For the second year in a row we have outperformed the UK and Europe and for the eighth year in a row we have been the best performing area outside of London. And the number of projects has increased by, I think it is 3.3% in Scotland compared to a over 6 percentage point decline in the UK.

That is a great success story. So I think we have a lot of attractive qualities that are allowing companies to invest in Scotland and we have to keep that up.

I am delighted with the new phrase I have learned recently from the tech sector in Scotland of “sticky jobs” because this generation of inward investment jobs are different to those that have gone before.

They are based around our talent and our university and research capability and as a result these jobs cannot go effectively anywhere else. They are coming here, they are sticking here and as a result of that other indigenous Scottish sectors and businesses are benefiting as well, and that goes to the heart of this Innovation Strategy, and I will come on to that.

But Scotland is already benefiting from innovation with success stories across the country and recognised excellence in a number of areas, both in terms of industry and from our universities.

I could give lots of examples but I may not have time but I will give Kenoteq as one, which was a spin out from Heriot-Watt University and produces the world’s first 90% recycled brick. With over 2 billion bricks produced in the UK, the opportunity is really significant to set up further production facilities across the country and internationally.

And there is a whole host of other examples I could give of innovation that is happening in Scotland just now.

While Scotland’s productivity however and business investment in research and development have seen significant improvements in recent years – with the gaps to the rest of the UK largely closed – we have work to do to catch up with our international competitors.

That is why the time was right to publish Scotland’s National Innovation Strategy and I know that Scottish innovators, entrepreneurs and our innovative companies stand ready to accept this challenge and return Scotland to a central role on the global innovation stage.

Innovation thrives on collaboration and it is through collaboration we get the most value from our investments in Scotland’s businesses and world class research community.

In that spirit, the Strategy was designed and developed  alongside industry experts, entrepreneurs, business leaders and academics who all came together with a shared vision to once again make Scotland one of the most innovative small nations in the world.

The development was guided by an expert Steering Group co-chaired by Professor Sir Jim McDonald whom I thank and his colleagues, and supported by intensive engagement through working groups, roundtables and workshop events and an extensive evidence gathering exercise.

I also want to thank my predecessor Ivan McKee who is in the chamber today for all his good work in his previous role putting the strategy together and working with these other individuals.

 The National Innovation Strategy sets out the actions we will now take to achieve our bold vision through four transformational programmes on cluster building, investment, commercialisation and productivity as well.

Within the next decade we will have a unified network of high-performing clusters in each of our innovation priority areas, providing valuable signposting to attract further international investment, collaboration and talent.

The Strategy identifies four key areas in which Scotland has the clear potential to be world-leading - energy transition, health and life sciences, advanced manufacturing, and data and digital technologies.

We will take a European-style cluster building approach to support these areas to become world-leading and international facing – driving mutual benefits from international partnerships as well.

Scotland has a range of established, growing and emerging clusters which can act as a foundation for a vibrant innovation-led economy. Over time we will develop an approach of  tailored packages of public support that act as a catalyst for growth and stimulate further private sector investment to support priority clusters to achieve their potential.

We will, within the next decade, also have increased the number of innovation active businesses because that is one of our challenges and nurtured highly scaleable organisations that will drive our future economy.

We are performing quite well with research and development, particularly in the higher education sector, it is also an improving picture in terms of the business sector as well and internationally Scotland compares reasonably well with many other countries but we have got to match the best and improve and that is an ongoing challenge which is addressed in the Innovation Strategy.

But we will also want to adopt an investor mindset to support our most innovative businesses – investing where we have a competitive advantage and providing a comprehensive and co-ordinated package of support and leveraging in venture capital.

So through this renewed package of support we will place our priorities at the heart of our approach, as we increase alignment of funds, reduce unnecessary duplication and, over time, close any gaps in the funding landscape and explore innovative models of investment to support Scottish businesses and their clusters to innovate.

So within the next decade we will see an increase in scaling companies from cutting edge research and applying innovation to seed the creation of new markets and harnessing new innovations to support increased productivity in existing ones.

It has always been the Scottish Government’s position that we have an open mind to new science and we pay close attention to developments in the European Union.

Another issue we have to address is our commercialisation landscape and we have to strengthen the role that our research base plays in driving economic prosperity in our country.

Working with the higher education system and the Scottish Funding Council we will evaluate the sufficiency of Scotland’s current investment in applied research, knowledge exchange and also broader research projects as well.

So I think given the time I will draw my remarks to a close just by saying that this programme will deliver, over the ten-year lifetime of the Strategy, an ambitious increase in the level of innovation taking place by businesses across the whole of Scotland. Resulting in increased productivity, improved economic outcomes, and a more inclusive economy.

To ensure we are making the necessary progress towards achieving our vision through these four transformative programmes,  we will track our innovation performance on a number of a key metrics over the next ten years.

And we will do that through Scotland’s Innovation Scorecard which will track Scotland’s innovation performance over time on a set of key indicators against other nations.

So in conclusion, I want to restate the Scottish Government’s ambition, my ambition that Scotland will once again be known as one of the most innovative countries in the world, leading the world in a number of key areas and providing solutions to global problems.

And I believe that ambition is entirely achievable and I believe that this Strategy will help us as a nation to achieve that ambition.

The power of new ideas and technologies is driving global change at an unprecedented rate and scale. So countries can harness this power, they can thrive in the 21st century, Scotland can become a magnets for talent and investment, exporters of the next generation of products and services and significantly raise our citizens’ quality of life.

Scotland can take its place amongst these leading countries.

So I look forward to the debate and I move the motion in my name.