Scotland’s technology sector is now a political battleground and must emerge stronger, writes TERRY MURDEN
The rescue and transformation of the capital’s former Royal Infirmary into the Edinburgh Futures Institute is a fine example of how thousands of demolished old buildings could have been put to good use in the modern world. A glorious nineteenth century edifice dedicated to healing bodies is now stimulating minds in the twenty-first and fast becoming a natural home for innovation.
By coincidence its neighbours include the fantasy sports company FanDuel and the search engine business Skyscanner, two of Scotland’s unicorns – companies valued at $1 billion. It was also appropriate, that both the Scottish Labour Party’s economy spokesman Daniel Johnson and the incumbent Economy Secretary Kate Forbes chose the EFI to announce updates on their technology agendas surrounded by those who are helping to build the sector in Scotland.
Mr Johnson was accompanied by party leader Anas Sarwar for a joint presentation that aims to position Labour as a forward-thinking party, building on efforts in England to create an answer to Silicon Valley and maintain a steady flow of investment into new ideas.
The media pack turned up in numbers but, as it turned out, only to ask Mr Sarwar about the challenge from Nigel Farage’s Reform UK, then left before Mr Johnson spoke, which meant his comments on how he wants to put technology at the centre of his strategy went unreported. That said, a number of those from the tech sector who waited an hour while Mr Sarwar met the press in another room decided they had better things to do and also departed before the main event. That was an opportunity lost.
The thrust of Mr Johnson’s address was the need for greater inclusion of technology across society and various sectors as well as tackling a chronic skills shortage. A survey showed that in 2022 more than 11,000 employers with skills shortage vacancies struggled to find an applicant with digital skills – more than three times more than in 2020. Mr Johnson says that while technology is central to the evolution of businesses, it can also transform public services and must be embedded in education, the health service and local government.
It was refreshing to hear Labour’s ideas on what it might do in government rather than engage in more SNP-bashing and blaming. Maybe it has woken up to the progress that the Scottish government has made on this front. For all its faults and shortcomings, the government has been something of a tech trailblazer. Scotland may be a small nation, but it does have a reputation for punching above its weight and two initiatives in particular – the Civtech and techscaler programmes – have caught the attention of the rest of the UK and the wider world.
Kate Forbes presented the Techscaler annual report at the Edinburgh Futures Institute (pic: Terry Murden)
Through Civtech, small companies are presented with real world problems in the public sector – such as flooding or the slow delivery of a service – and are asked to come up with a solution. It has been hugely successful and is being adopted by other countries.
Likewise, the techscalers – growth company accelerators – are now being copied by others. They were the brainchild of Mark Logan who was hired by Ms Forbes as chief entrepreneur to develop a digital strategy. Ms Forbes accepted all his recommendations which included setting up techscalers around the country.
Scotland’s techscaler manager, the growth company incubator Codebase, has helped establish ‘pop-up’ techscalers in San Francisco and Singapore to enable Scottish business owners to learn from entrepreneurs in two of the world’s foremost tech centres. On Thursday Ms Forbes announced that Japan is next on the list and this time it will embrace a range of ‘other activities’. Expect official confirmation in the next week.
In the second annual techscaler report, which she presented, it was revealed that the number of firms on the programme has almost doubled to 978 and the sums invested have likewise risen to £118m (from £54m in the first year).
But is this enough to make a significant impact? Sceptics say that, in the scheme of things, these are relatively small numbers. After all, it works out at an average of just £120,000 per company. Of course, a small number of firms will account for the bulk of the capital raised and it is these that may offer the prospect of the greatest growth. They say that from tiny acorns great oak trees will grow. Here’s hoping these firms flourish in the same way.
After her presentation, I asked Ms Forbes about the ambitions of the Labour party in England where investment is on the multi-billion pounds scale, with plans to evolve the Oxford-Cambridge corridor into Europe’s Silicon Valley, and to build a network of modular nuclear reactors.
Her response was almost apoplectic. “We are strongly ahead of all that,” she insisted, before reeling off a list of “phenomenal” initiatives and achievements in gaming, life sciences and renewables, and plans to improve the planning process. As for Mr Johnson’s strategy, she said: “Well done for catching up. We are not just talking about it, we are delivering”.
This is undoubtedly a new political battleground, but one that must allow companies the freedom to grow unhindered by the usual restrictions of too much tax, regulation and point-scoring.
The ‘fear of failure’ was mentioned more than once this week, a characteristic often attached to modern Scots, though it actually applies across the UK. Britain’s aversion to risk, which holds back the development of good ideas, arguably has its roots in the growth of a dependency culture (cosy jobs in the public sector) and in government policies that have not encouraged individuals to ‘give it a go’.
The solution, therefore, lies in making sure there are sufficient incentives for those keen to pursue their ideas, and strong enough safety nets to help ease the pain of defeat. That’s where government can step in and usefully oil the tech machine.
Terry Murden was Editor and Business Editor at The Sunday Times Scotland, Business Editor at The Scotsman, and Business and City Editor at Scotland on Sunday. He is now Editor of Daily Business.
Leave a Reply