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20/08/14 15:33

The economic impact of Innovation Centres

Michael Russell, Cabinet Secretary for Education and Lifelong Learning
Scottish Parliament
August 20, 2014.

Presiding Officer, this is my first opportunity to brief members on the significant economic impact of our ambitious and ground-breaking programme of Innovation Centres – and I welcome the chance to do so.

Developed in partnership with the Scottish Funding Council, Scottish Enterprise and Highlands and Islands Enterprise, Innovation Centres are collaborations between universities, businesses and others to enhance innovation in and across Scotland’s key economic sectors.

When launched, this initiative was widely welcomed as having the potential to greatly improve university-business engagement, by bringing together those best able to resolve many of the challenges facing industry in Scotland whilst harnessing new opportunities.

I now want to share with the Parliament some indications of positive progress and what we are beginning to expect in terms of impact from our significant investment.

As you know, Scotland has 5 universities in the world’s top 200 – more than any other country per head of population.

We have a track record of securing competitive research with funding from a range of sources, reflecting the excellence and global reputation of our universities and the quality of their research.

Our universities excel when it comes to research with more citations than any other country in comparison to its GDP. We are disproportionately excellent at what we do.

This Government has shown its support for our universities and research through investments such as the Global Excellence initiative. In an independent Scotland we can and will do even more.

Our universities and research facilities are a core strength in our economy. They are an important growth sector.

That’s why we have sought to help improve the links between our universities and the private and public sectors, to increase the economic and social benefits of innovation from Scottish universities.

We start from sound foundations. Our research pools, for example (and we were the first country to develop such a strategy), have embedded a collaborative approach across the university sector to provide a critical mass of research excellence which enhances our competitiveness on the world stage.

This has been instrumental in attracting international research centres to Scotland such as the Fraunhofer Centre for Applied Photonics and the first Max Planck International Partnership in the UK.

This all adds up to the reason why a recent independent report, commissioned by the British Council, pointed to “a joined-up and collaborative sector, helped by its modest size and a Scottish ethos of education as a public good” as one of five strategic assets of the Scottish higher education sector.

Yet we have always been ambitious to do more, to extend the depth and breadth of partnerships in order to maximise the social and economic benefits of Scotland’s world class research.

Innovation Scotland epitomises our approach. Launched last October, Innovation Scotland gives focus and impetus to improving the effectiveness of universities and businesses working together, to increase innovation in the economy.

This approach is assisting in developing collaborative approaches to spin-out support, supporting easy access IP and extending the role of Interface to better facilitate business and academic partnerships.

Presiding Officer, Innovation Centres are a manifestation of that approach in action.

While research pooling was about improving the quality of our research through collaboration across the university sector, innovation centres build on that research quality and collaborative strength by promoting innovation in commercial contexts.

Innovation Centres are large-scale, ambitious projects of excellence. They are about developing the best environment for businesses and academia to interact, taking innovation to the next level.

They are part of a cultural shift that brings the innovation and creativity of our academic sector to the heart of our business life and puts business drive firmly into the heart of our academic sector.

The Centres help the research community understand the needs of their particular industry and help industry understand the assistance that can be delivered through research.

They will be instrumental in placing Scotland ahead of our international competitors and will reinforce our reputation as an innovative nation which nurtures entrepreneurial ability and facilitates company creation and growth – creating a dynamic for innovation capable of providing long term economic growth across Scotland and wider social benefit.

Scottish Government investment in the overall programme is substantial through the Scottish Funding Council providing up to £124 million over a six year period.

Around £80 million of this is already committed to the first eight innovation centres including £2 million for MSc places to improve the connections between business and universities by supporting the development of the next generation of entrepreneurs and innovators and helping deliver the high level skills needed in a modern Scotland.

This morning I announced £14 million, from within the £124 million, that will support major capital and infrastructure investment across the innovation centres programme.

One example, which I visited this morning, is the Stratified Medicine Scotland Innovation Centre which will receive £4 million to help secure NHS data sets and establish a next generation genomic sequencing platform at its interim facility at Inchinnan.

Indeed, the public investment we are making is being more than matched by the Innovation Centre partners who estimate their contribution to be around £200 million (cash and in kind) reflecting the strong support from industry who recognise the potential and ambition of the innovation centre programme.

We are under no illusion that these are large scale ventures that will need time and patience for their potential to be fully realised, but we firmly believe that, with the range and quality of partners on board, this will happen and indeed is already starting to happen.

The partners involved all come with high expectations and reputations.

Time precludes me from naming them all but they include GlaxoSmithKline, Scottish Sensor Systems, Thales UK, Gas Sensing Solutions, Amor Group, Philips Healthcare, Cisco Systems, Thermo Fisher, and Aridhia Informatics. And there are many more.

And it’s not only the major global players that are involved. Our SMEs are taking an active role in the innovation centres and that is to be greatly welcomed.

The first phase of the Innovation Centre programme was launched in Spring 2013 – The Digital Health Institute, Stratified Medicine and Sensors and Imaging Systems.

Since then, two further Innovation Centres have been launched, Industrial Biotech and Aquaculture (in February and June).

And later this year we will see the launch of a further three Innovation Centres covering Oil and Gas, Big Data and Construction.

These Innovation Centres have already begun to make their mark on the landscape and their potential impact is huge.

Stratified Medicine is recognised as the future for the diagnosis and treatment of disease. Tailoring treatment to those who will benefit most increases cost effectiveness – in effect it’s getting the right drug, to the right person, at the right time.

Across the innovation centre landscape, we expect to see advances in skills, processes, collaboration and performance leading to a significant longer term impact on our economy.

Indeed, I can today announce to Parliament the first indication of the scale of the economic impact of the Innovation Centre Programme.

Based upon the business plans for individual centres, the cumulative boost to Scottish economy could reach up to a massive £1.5 billion and create up to 5,000 jobs across the wider economy.

These figures reveal the impact that our world class higher education sector, working in partnership with business, can deliver.

And the figures illustrate the scale of the economic potential.

Work is now underway to develop a comprehensive baseline economic impact assessment so we can fully monitor and evaluate the success of the Innovation Centres.

That will, I am sure, confirm the considerable impact and benefit of this collaborative strategy.

There are also opportunities – as we have already witnessed – for the Innovation Centres to stimulate productive new collaborations, building on their collaborative origins.

For example, the University of Edinburgh is leading on a bid to secure the Knowledge Innovation Centre on Active and Healthy Ageing from the European Institute of Innovation and Technology.

The aim is to develop new health and care goods and services with business and economic models that enable systemic change. The Innovation Centres will play a role in strengthening this bid.

This is a truly collaborative bid, with expert partners from Scotland, the international commercial community and other regions within Europe working together to secure this project. We are supporting this and wish the bid team every success.

And we certainly believe having a community of innovation centres places Scotland in a strong position for attracting EU investment. Indeed, some of the Innovation Centres are already in discussion with SDI about their connection to the wider international community.

While we are maximising the potential of university-business collaboration to support innovation and economic growth there is more we could do.

Independence can reinforce our global approach by providing access to more of the policy levers required to support innovation, including key financial tools.

For example, Reindustrialising Scotland for the 21st Century, published in June, highlighted how, with independence, future Scottish Governments would be able to develop an overarching framework which aligns innovation activity and consider new opportunities to support innovation.

This could be through tax incentives such as allowances on R&D expenditure and/or reductions in payroll taxes for employees directly involved in R&D activity (such as presently takes place in the Netherlands).

Independence would also allow us to better support a thriving internationally connected and competitive university sector through the removal of a damaging immigration policy that often prevents our universities from attracting and retaining talented researchers.

One priority must be the reintroduction of the post-study visa which will attract the best researchers from across the world to work in Scotland.

Presiding Officer, in conclusion, these Innovation Centres represent a major step forward in university-business engagement and bring with them the opportunity for a wide range of social and economic benefits to Scotland. We can now begin to quantify those and I hope they will be welcomed by the whole Chamber.

This is an initiative which we should all support. The ambition and vision of the innovation centre programme is remarkable. I hope the whole Chamber will wish the partners every success over the coming months, years and decades as we work together to ensure an innovative, collaborative, independent Scotland.