The economy, innovation and energy

The economy was the main announcement from the Scottish Government while in the Parliament energy strategy was debated.

Investing in the new economy.

The Scottish Government has set out its economic strategy which aims to build a more innovative and fairer economy.

The Economic strategy has four strands, as illustrated in the figure below:

1. Investment in in people, infrastructure and assets;
2. Innovation in products, services and workplace practices
3. Internationalisation 
4. Inclusive growth 

Source: Scottish Government

I will concentrate on the strands which is most relevant to tech companies.

Innovation

The Scottish Government will foster a culture of Innovation by:

• establishing a new Ministerial-led Innovation Forum;
• supporting the network of Innovation Centres to apply knowledge and innovation from our academic research base into business;
• piloting Innovation and Investment Hubs at key global locations.
• Promoting innovation in the public sector which can support the economy.

A graph from the document shows the lack of investment by Scottish business in R&D by international comparison.

Source: Scottish Government

Business and Enterprise spend on R&D in Scotland is 0.6% of GDP and despite this being a priority of successive governments since 1999, it has stubbornly remained at that level ever since Scottish figures were published. In some ways this is not surprising as most UK companies site their research labs in the South of England.  More importantly any government intervention is likely to be at the margins and totally masked by the large and largely static research endeavours in life sciences for example.

The Scottish government hopes that innovation centres can bridge the gap between university research and business development. Though they are funded by the SFC  they are led by industry figures and have less academic outlook than the defunct ITIs developed by the previous government.

Implementation

The third section of the strategy onimplementation runs to only 7 pages of the 84 and most of those are dedicated to the devolution of increased powers proposed by the Smith Commission.  The Government is looking to business for ideas to implement the strategy and on how to use the new powers.

When the wind doesn't blow

Right now it seems unlikely but there are times when wind farms cannot produce enough power and conventional power stations are required.  They are also the days I can fly my balloon so they seem rare to me but this was the topic behind a energy debate last week in the Scottish Parliament.

Following the announcement that the Longannet power station viability was under threat, the Conservative party called for the debate on Energy strategy.  Murdo Fraser moved their motion stating that  the closure of Longannet would not only be a blow to its workforce but also the Scotland's energy needs as it provides 20% of Scotland electricity output. The threat arises from the costs of connecting to the national grid and in the future from new EU emission rules.

He went onto to accuse the Scottish Government of relying too heavily on renewable energy, a claim immediately refuted by the energy Minister. He stated that their strategy included conventional thermally generated electricity. He went onto to state that the grid charging scheme made it economically impossible to build conventional power stations in Scotland especially if they also have to pay emission duties.

Community wind farm

On the subject of wind, Scottish Enterprise has announced a community wind farm could receive £8 million in funding for a project in South Lanarkshire.  Though the main source of the investment is form Santander, £1.63 million in funding is from Scottish Enterprise’s Renewable Energy Investment Fund (REIF).  Income from the development will be used to support community projects as according to Andrew Stewart, Director at Stewart Energy, 100% of the ownership is local.