Scotland: Towards the Knowledge Economy

executive summary

Scotland's long run rate of economic growth is below that of the UK. Progress towards a more competitive position must be made on technology, innovation and productivity improvements. The Government's policy emphasis is therefore on knowledge, skills, creativity and the pressing need to transfer knowledge from the science and engineering base into the market place. Scottish higher education institutions (HEIs) and research institutes are at the core of the Government's strategy to modernise the Scottish economy by creating a knowledge driven economy. (In itself, the higher education sector is a significant industry with an annual turnover of £1.2 billion and employing over 36,000 people.)

In January this year Lord Macdonald, the Minister for Business and Industry at The Scottish Office announced to the Scottish Grand Committee that he was setting up a Knowledge Economy Taskforce to examine four issues: a possible framework for the commercialisation of research, building on the existing work within universities and other higher education institutions coupled with a refocusing of the Technology Ventures Initiative; recommendations on refining or developing academic incentive and career structures within higher education institutions to remove barriers to all forms of industrial collaboration, to improve its esteem and ensure Scotland gets maximum economic benefit from the practical application of its outstanding range of high quality research; a framework within which higher education institutions and research institutes can assist with the development and implementation of Scottish Enterprise's cluster plans for key industries in which companies and public bodies will collaborate; and a blueprint that Scottish universities could adopt, if they wished, for a collaborative bid under the Government's Science Enterprise Challenge for a single entrepreneurial "Centre for Enterprise" serving all of Scotland.

ENCOURAGING COMMERCIALISATION

A range of UK and Scottish initiatives has been in place for some time. The taskforce considered one of Scotland's most prominent initiatives - the Technology Ventures Initiative (TVI) -as part of its work. It recognised the considerable progress that the Scottish science and engineering base had made both before and during the first phase of this initiative.

A report on the first stage of Technology Ventures prepared by consultants2 argued for a return to the original concept of a pluralistic initiative. The taskforce was attracted to this approach although it was aware of concurrent consulta-tion with the stakeholders in the original initiative on how the initiative should be taken forward.

Having considered the consul-tants' report, the task-force concluded that: HEIs and research institutes had made good progress in speeding the flow of scientific discoveries to the market place; over recent years the Technology Ventures Initiative and Local Enterprise Companies had also contributed to this success. However, the commercial flow could be increased by adopting new management arrangements which placed more emphasis on involvement and collaboration between those actively involved in commercialisation from a range of organisations in the private and public sectors; the present high level Leadership Group needed to evolve to include individuals actively involved in the commercialisation process. It needed to meet more frequently to set the broad direction within which a programme of collaborative activities could be driven forward; at the request of this new "forum", development groups drawn from key private and public organisations and led by the most relevant of the stakeholders should be formed to take particular issues forward on a collaborative basis. Such groups should exist only for the purposes of resolving particular issues and would form and disband as the needs demanded; the efforts of Scottish Enterprise's TVI team should now be re-balanced much more towards increasing the capacity of the company base to absorb and exploit the fruits of scientific discovery, and less towards promoting the initiative within the universities and research institutes.

Scottish Enterprise (SE) through its membership of the taskforce was invited to take these conclusions into account in preparing for the next stage of Technology Ventures.

The taskforce was made aware of the increased resources being made available by the Government to support technology transfer through national initiatives. Nevertheless, its attention was drawn to a pre-seed funding gap which restricts the flow of technology from laboratories to the market place. It therefore recommended that: the additional provision of £11million over three years allocated to SE should be drawn on to support proof of concept stage activity and to complement University Challenge (£2million is available for this in 1999-2000); it should be allocated to higher education institutions and research institute laboratories through the SE cluster groups in a way that leaves them with a high degree of discretion over exactly how funds may be utilised and in which particular projects.

ACADEMIC INCENTIVES

The taskforce also considered the internal barriers that exist to academic-industry collaboration and how they could be overcome. It took into account recent studies in this area that highlighted the difference between the priorities of academic institutions and those of industry. The taskforce welcomed a report from the Committee of Scottish Higher Education Principals (COSHEP) outlining the range of structures and mechanisms that are currently in place across institutions in Scotland. It con-cluded that: there were no simple solutions to the challenge of promoting technology transfer, and circumstances varied within and between institutions; however a wide range of measures were already used by some institutions and more widespread adoption of them should reduce the barriers to academic-industry collaboration.

The taskforce also recognised that a lack of resources could prevent higher education institutions from undertaking commercialisation of research. It welcomed: the announcement by the Scottish Higher Education Funding Council (SHEFC) that it would establish a £1million annual funding stream to give the commercialsation of research more professional support; and The Scottish Office decision to match this funding and make a further £1million available to SHEFC for three years.

The scheme will offer each higher education institution resources to improve their infrastructure for and management of commercialisation. Again, a non-prescriptive approach will be taken to the use of resources.

CLUSTERS

Building on the work already carried out within institutions and on Technology Ventures, the taskforce considered how the higher education sector and research institutes could be brought into the Scottish Enterprise cluster strategy. The taskforce was already familiar with the general concept. It also took note of the fact that individual academics were actively working with specific cluster teams on the preparation of their action plans. Moreover, individual institutions were provided with reports of work in progress and there was joint working between The Scottish Office, SE and SHEFC.

Nevertheless, the taskforce recommended the following additional actions:- the establishment of a national cluster liaison group; the possibility of seconding individuals from key departments in higher education institutions to the cluster teams; examining the feasibility of allowing the cluster web sites to be linked into the academic JANET and SUPER JANET internet link; exploring the potential for joint learning experiences for academic and SE personnel and individuals from industry.

The taskforce also concluded that: the commitment of higher education Principals is essential if their institutions are to contribute fully to cluster development.

SCIENCE ENTERPRISE CHALLENGE

Finally, the taskforce considered the potential advantages to Scotland from developing a Science Enterprise Centre. The intention behind this work was to assist Universities and others to prepare initial bids for the Science Enterprise Challenge. (The results were made available to institutions prior to the publication of this report). The general model was prepared with the help of consultants with experience in this area.

The taskforce believed that the critical success factors include having: a small tightly constructed management group; core partners with a strong record of enterprise in education and commercial-sation, and experience of previous collaboration; and a robust financial package tailored to the core objectives.

It believed that a possible working model could be established on a core and gateway principle with the founding partners establi-shing a management committee and bringing in other higher education institutions as associ-ate members so that the benefits could be disseminated widely. The taskforce was very much in favour of building on the outcome of the Science Enterprise Challenge, to develop a Scotland-wide facility from any successful Scottish bids.

From 1 July 1999, of course, powers relating to the responsibilities of Scottish Enterprise and SHEFC will be devolved to The Scottish Parliament.