AS SEE IT: TERRY MURDEN asks if the new chief entrepreneur will get the full tool-kit to build an enterprise nation
More government investment into the tech sector cannot be sniffed at, nor the recent appointment of an industry stalwart to lead the country towards a new entrepreneurial dawn. But before we get carried away into thinking Holyrood and the business community have finally made up after years of mutual suspicion, there remain a few niggling doubts about the government’s commitment to enterprise.
It would have been churlish not to have joined the chorus of whooping and hollering on social media platforms after Nicola Sturgeon confirmed a report by Daily Business earlier that day that the tech incubator Codebase had won a £42m contract to roll-out the tech scaler support network, a key recommendation by Scotland’s first ever Chief Entrepreneur, Mark Logan.
Economy Secretary Kate Forbes had promised in her National Strategy for Economic Transformation that ‘delivery’ was top of the agenda and at the Glasgow offices of Barclays the deal was duly signed and sealed. However, actual delivery of the overall objective is the tricky bit, and sticking to those promises is already testing her resolve.
Mr Logan’s job is to begin the process of instilling in Holyrood an “entrepreneurial first” approach to policy making. He’s got an initial two years, or less than half a parliamentary term, to start shifting the legislative process away from doling out handouts and concessions to investing in economic growth.
Don’t underestimate the scale of the task. Many of our elected members want quick fixes for their constituents. Cheap bus fares, help with energy bills, that sort of thing. Siphoning off an already shrinking budget to support a university software spinout with no prospect of making an early profit may not get top billing on the campaign leaflets.
This default strategy to social causes over long-term economic development has often been seen as, on the one hand, a sign of a caring government, on the other as a short-term, self-protection strategy to win votes from those more interested in their own circumstances.
While the new generation of techies and academics believe there is now no holding back Scotland’s transition to an entrepreneurial future, others will recall past attempts to rid the country of its dependency culture. Remember “Smart, Successful Scotland”? That was a slogan coined by Wendy Alexander when she was enterprise minister 20-odd years ago when Ms Forbes was still in primary school.
In the intervening years, and a few before the parliament was created, we’ve had local enterprise companies, a business birthrate strategy, and attempts to emulate the German Fraunhofer Institutes, a partnership between industry and academia. These are either long gone or remain work in progress.
On the upside, the momentum towards becoming a tech nation is under way, though the arrival of a devolved government hasn’t really made a lot of difference. It has been achieved largely through the sector’s own doing, a new get-up-and-go attitude, the emergence of a healthy support network and an improved relationship with the academic research base. The British Business Bank has just revealed that small businesses founded at Scottish universities accounted for the highest number of equity investments into UK spinouts last year.
This gives the politicians a platform to build on. But it also provides them with a record of growth and achievement for which they can try to claim credit. Furthermore, Codebase has already nurtured a significant number of startups. It’s crucial therefore, that the government’s initiatives are measured in their own right.
It is also important for government to clearly establish the structure for pulling its enterprise policy together. With a big chunk of tech growth now “outsourced” to Codebase and funding seemingly in the hands of the Scottish National Investment Bank, where does it leave Scottish Enterprise and its two sister agencies?
Beyond the tech scaler investment and the £192,000 remuneration for his 96 days per year, we have no detail about the financing of the Chief Entrepreneur’s programme and whether it will extend into establishing a wider venture capital sector, thereby extending the access to finance, and tax incentives.
In the end it will come down to whether the government is prepared to put its money where its mouth is and prioritise enterprise in its spending plans. Unfortunately, there seems to be some doublespeak at work.
Ms Forbes’ promises to deliver were questioned in this column following last month’s spending review which revealed a 24% increase for concessionary fares and bus services over the next four years, while spending on enterprise, tourism and trade promotion is cut by 16%. That is not how to create the entrepreneurial template for her fellow ministers to follow.
Has SNIB been blinded by the light?
The Scottish National Investment Bank has injected £10m into the Edinburgh firm PureLifi which is developing an “alternative” to wi-fi connectivity using light, though some experts say the technology has its shortcomings.
While large amounts of data can be transmitted much quicker over Li-Fi, there are a number of drawbacks that have already led some to see it as a “consumer flop”.
Stephanie Howey, marketing director at US-based telecoms business Talkroute says that because there is no improvement to latency, or what is commonly referred to as “lag”, LiFi will not improve the performance of internet media such as video conferencing, playing video games, or talking on the phone via the internet (VoIP).
“You will still be able to download massive files in a blink of an eye,” she says. “Unfortunately, just like your TV remote requires line-of-sight with your television, the connection to your iPad requires line-of-sight with your Li-Fi transmitter.
“Since a Li-Fi connection can’t pass through walls, there needs to be a series of transmitters in every room of your home to transmit the signal. Besides the obvious limitations this would impose, it would also be quite cost prohibitive for most people.”
She adds that there are various applications where Li-Fi makes a lot of sense. For instance, using wireless transmission via light could help ease spectrum allocation issues. But she says those limitations listed above must be taken on board.
“While Li-Fi definitely has its place in the world of data transmission, touting it as a Wi-Fi replacement makes no sense at all,” she says.
Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business