Collaboration needed to make hydrogen a reality for Scotland, by Jeremy Grant

Walking into the St James Quarter shopping centre in Edinburgh the other day I noticed a series of adverts scrolling on an electronic billboard near the entrance, each headlined “Levelling Up is Here”.

The campaign, paid for by the UK government, is designed to promote the £937 million in projects across Scotland that are being funded by Westminster, including the creation of “green freeports” at the Firth of Forth and Inverness and Cromarty Firth. When these locations were revealed in January, the UK government announcement made a point of saying it had worked in collaboration with the Scottish government to select them for freeport status, which comes with tax and customs breaks to attract companies to invest in renewable energy infrastructure. 

Of course, the settled narrative about the relationship between Holyrood and Westminster is rather different. Sometimes it is dysfunctional, especially when the issue turns on whether a matter is reserved or devolved. 

Yet in the area of renewables, which is so important to Scotland and the UK’s shared future in an era of geopolitical fracture and energy security, it is vital that the two governments collaborate far more than they have been doing hitherto. Especially when it comes to offshore wind and hydrogen and the associated infrastructure needed to make it all happen — electricity grid and port upgrades, supply chains and so forth. 

On hydrogen, the UK and Scottish governments are pursuing what the House of Commons Scottish Affairs Committee described in a March report as a “twin track” approach, based on different net zero target dates of 2050 and 2045 respectively. And there are different production targets for hydrogen: 10 gigawatts (GW) by 2030 in the case of the UK, and 5GW in the case of the Scottish government. 

The committee’s report noted that the two governments “arrived at their respective low carbon hydrogen production targets independently of each other, and we are unclear how the two targets align and whether either is achievable”.

It then asked the two governments to provide “a proposed timeline setting out key milestones on the road towards the respective targets to assist us and our successor committees in judging progress and evaluating the achievability of Scotland’s hydrogen production targets”. 

Meanwhile, the Scottish government has been assiduously courting Germany, knowing that Europe’s largest economy needs hydrogen to replace Russian gas and as Berlin shuts down nuclear. Under a hydrogen “action plan” drawn up by Holyrood a year ago, Scotland is to become “a leading producer and exporter of renewable hydrogen” generated from vast offshore wind farms in the North Sea. 

Scottish government rhetoric around hydrogen sometimes comes across as if it’s being viewed as a “national asset” that will eventually replace oil and gas in strategic importance. The bottom line is that hydrogen policy is complex, cutting across reserved and devolved competencies.

And at a Scottish Affairs Committee hearing in June, there were pointed questions for UK ministers about the extent to which they were liaising with Scottish counterparts on hydrogen. 

Earlier this month, the UK and German governments signed a high-level energy partnership that includes hydrogen. It’s unclear where collaboration between the UK and Scottish governments fits in. But it will be needed if any of this is to attract the private capital needed to make hydrogen a reality.

Putting Scotland's IoT sector on the global map, guest blog by Paul Wilson, CEO and Co-founder of the Smart Things Accelerator Centre (STAC)

It is well recognised that China, with its low-cost manufacturing solutions, gave rise to what we now term globalisation and consumerism.

Then came Trump and his tariffs targeted at China to stop the nation in its tracks as a technology superpower and its related ambitions to compete and win in technologies such as smartphone OEMs, semiconductors, and AI.

Automation is quickly neutralising low-cost labour with manual processes in manufacturing replaced by robots. Additionally, procurement has become more focused on carbon footprints. The net result of trade tension, Covid, and ESG is a swing back to nearshoring of supply chains. This is boosted by very significant investments by the US and EU into semi-conductor capacity in the region.

So, as we enter the technology cycle of drones, robots, EVs, sustainability tech, health tech, IoT, and AI, how is Scotland positioned?  In 2020, our STAC team assessed that we were not positioned to compete.

STAC founders recognised that Scotland had the right talent emerging from its education system and high-quality entrepreneurs addressing real-world problems. However, it was clear that there was room for improvement before we could compete and win repeatedly.  Compared to winning tech hubs like Waterloo in Canada, Scotland lacked a coordinated approach involving academia, and public and private sectors. This absence of a cohesive and highly qualified ecosystem held back the growth of tech startups in this sector.

To bridge this gap, STAC was created. It added a company-building accelerator program to leverage the talent pipeline from universities, becoming a focal point for entrepreneurship. This initiative aimed to become a lobbyist, voice, and facilitator of development support, to nurture internationally competitive tech start-ups.  With an advisory board including industry luminaries like Jim Rowan, CEO and President of Volvo Cars, and backed by corporates like Intel, we set out to move the dial.

Fast forward to October 2023, and STAC has seen notable success. With three cohorts and 35 startups, Scotland is witnessing the emergence of a formidable IoT, or “smart things” cluster. Pre-STAC, IoT brands such as Utopi, Beringar, Kingdom, Current Health, Krucial, Novosound, and Integrated Graphene were scaling impressively, building teams, launching products, establishing markets, generating revenue, and attracting investments. Our so-called ‘STACers’ are following suit, launching products, securing customers, and attracting investment, further driving the positive momentum.

STAC's plans include expanding co-working spaces, equipping them with specialised labs and event spaces that will house over 30 companies with 250 desk capacity to create one of Europe’s largest IoT spaces, while our STAC Invest and STAC Jobs initiatives will facilitate investment and talent acquisition respectively for startups. The goal is for all STAC companies to develop products, build teams, and make sales during the 18-month support program. The aim is to grow the portfolio to over 70 companies in 2024 while providing expert mentorship guiding firms towards international competitiveness.

The strategy for the future involves celebrating achievements, raising awareness, and positioning Scotland as world-class in this area. This will involve emphasising the designed in Scotland brand and establishing an international launch pad strategy for North American and Asian market launches.  With some big announcements in the pipeline, we plan to put Scotland increasingly on the global map.

Innovating faster with startups, guest blog by Steven Drost, Chief Strategy Officer, CodeBase

When we talk about the future of healthcare, many of us will reflect on how seismic an impact Covid-19 had on our lives, a narrative played out across the globe that continues to this day.

On one hand, the significant challenges we face around healthcare, which were exacerbated during the pandemic, are daunting; on the other we see how innovation can help us address these challenges. Indeed, we showed during Covid that we could innovate to solve one of the greatest societal challenges the world had ever faced.

Across the UK, the National Health Service, established 75 years ago with a founding principle that everyone should have access to healthcare based on an individual’s health needs, not their ability to pay, remains under extreme pressure. We’ve all seen the headlines around waiting lists, strikes, general disillusionment from frontline staff, and the rest.

In Scotland, in spite of the pessimistic headlines, we have an action plan in place which I believe gives us room for optimism. The twinning of Techscaler with NHS Innovation Hubs around the country is the foundation, a base from which we are bringing the NHS and tech startups together, with a view to innovation dramatically improving efficiencies and outputs.

It is what Mark Logan, chief entrepreneurial adviser to the Scottish Government, describes as “industrialising innovation in the NHS”.  At the end of September in Edinburgh, Mark was joined by Dame Anna Dominiczak, Chief Scientist (Health) for the Scottish Government and Regius Professor of Medicine at the University of Glasgow, to discuss how this partnership has the potential to bring about lasting and effective change.

With a panel and audience comprised of clinicians and healthcare professionals, academics, and startups founders, including from our own Techscaler membership, the energy in the room was palpable, and valuable conversations and exchanges took place on stage and during the related networking sessions.

Anna has written for FutureScot in recent times around the need for the NHS to adopt more of a startup mindset, and to be more entrepreneurial in its approach. It’s a classic win-win: the NHS wins by innovating faster, and startups have greater success, with all the associated societal and economic benefits that flow from working much closer together.

As Anna says, if we are to genuinely affect change, we must involve the people who are directly involved in the delivery of healthcare. Change is never easy, there will be barriers to break down, but the prize is too important not to do everything we can to shift the dial.

At CodeBase, and through the Techscaler programme, we see the considerable healthtech talent in Scotland, startups who are raising funding and going onto commercial success, domestically and on the international scene. We need this flywheel to keep spinning, and greater collaboration across the ecosystem is absolutely integral.

Clinicians and medical professionals have the truest perspective of life out on the healthcare coalface, and know which changes are most needed. It makes sense to connect them with tech founders and teams who can help them translate their knowledge and experience into building and iterating  software and hardware solutions.

Our university sector holds incredible human capital and innovation talent, the more we can harness this strength, and grow the associated pipeline of spinouts and partnerships, the better.

The investor community plays a central role too, backing high potential companies on their journeys to product-market-fit and commercialisation.

Successful founders can help the next generation of healthtech companies make the grade, we must use their experience and know-how, and feed it back into the system.

As an institution, the NHS knows it must innovate, some within the NHS will move quicker than others, while some will fall behind the curve, but there is a feeling that the momentum for change is very real. That should be encouraging for all of us.

Big lenders signal new funding environment for Scotland plc, by Jeremy Grant

Last week’s revelation by the UK government that company insolvencies hit their highest level since 2009 made for dispiriting reading.

It’s clear that the hangover is finally kicking in from a cocktail made up of the end of pandemic-era government support, accumulation of debt, and the impact of higher interest rates. Scotland was not spared: 296 companies went out of business in the third quarter, a figure seven percent higher than in the same quarter of 2022. 

Yet behind the grim statistical headlines there is a more uplifting structural story to be told about the funding environment for Scottish business — one that may signal a new foundation for how the economy can be grown.

Last week the British Business Bank (BBB), a UK government-owned lender set up in 2014, started a series of roadshows to explain the nuts and bolts of a new £150 million “Investment Fund for Scotland”.

It’s part of a package of UK-wide funding for small- and medium-sized businesses (SMEs) designed to increase the supply and diversity of early-stage finance to regions where high street bank funding may be harder to access.

In a windowless room at the EICC conference venue in Edinburgh, I listened to pitches to about 40 small business owners by three fund managers appointed to manage tranches of the fund: DSL Business Finance, which will provide loans of £25,000-£100,000; The FSE Group, which will handle loans of £100,00 to £2million; and Maven Capital Partners, which will offer equity investments of up to £5m for a business.   

Last month, Edinburgh-based private equity firm Par Equity announced a £100m venture fund aimed at promising scale-up companies in health, climate and industrial technologies in Scotland, Northern Ireland and the north of England. Scottish National Investment Bank (SNIB), the Scottish government-owned development bank, British Business Investments (part of BBB) and Strathclyde University’s pension fund are co-investors.

Finally, SNIB since its inception in 2020 has invested £221m in 27 businesses in Scotland, ranging from Verlume, an Aberdeen company that develops subsea batteries for the offshore wind industry, to Forrit, an Edinburgh cloud technology scale-up.

Taken together, this trifecta of financing flows amounts to the emergence of a new funding environment that simply didn’t exist until fairly recently (at least, not on this scale).

It also points to the establishment of significant “patient capital” — debt or equity funding that prioritises sustainable growth as well as returns — that could help fire up new drivers for the Scottish economy, including the technologies needed for net zero. It’s no coincidence that the companies Par Equity fund has in its sights are in robotics, photonics, advanced materials and artificial intelligence. 

Jason Higgs, Deals partner at PwC Scotland, says it’s “encouraging to see this increase in funds available through new avenues to supplement the existing funding ecosystem”.

Two other things stand out. One is the fact that lenders in this trifecta appear to have more appetite for “projection-based lending”, which focuses on assessing an SME’s future prospects, rather than relying for lending decisions on a backward-looking analysis of financial performance.

The other is the geographical reach of the BBB’s fund managers, who have relationships with “business gateways” across Scotland. This will doubtless help in the bank’s mission — as chief executive Louis Taylor told me — “to make sure this money really gets to underserved parts of Scotland”.

Shooting for the moon, by Nick Freer

There was a story in the news last week about the moon being 40 million years older than previously thought.  Wow, I thought, until I read a bit further into the article to find out that the Earth’s only natural satellite is over 4 billion years old anyway… so, y’know, what’s another few million years right? Whatever, it’s a great story all the same.  

I try not to make a habit of it, due to a relatively shy and retiring disposition, but I was persuaded to do a live-streamed Q&A session recently on the subject of PR, specifically what makes a good story for the press.  Terrible segue?  Tick.  

The session took place at the Smart Things Accelerator Centre (STAC for short) at Skypark in Glasgow, Scotland’s first Internet of Things (IoT) accelerator, which launched (first of a few shameless celestial references) almost exactly two years ago.  Run by IoT veteran Paul Wilson, it’s been a pleasure to work with the team on all things PR during that span of time.  

IoT is an exciting sector, as an agency we’ve worked with IoT startups like pureLiFi for the best part of a decade.  STAC’s CEO Wilson, backed by a slew of organisations ranging from Scottish Enterprise to Intel Corporation, plans to build globally competitive IoT companies from a base in Scotland, shooting for the stars and putting Scotland’s IoT cluster on the international map.  

Back to the PR Q&A, thankfully it ended up being a relatively painless exercise, and hopefully I passed on a few useful pointers for the audience.  For me, I’ve always thought PR is a reasonably straightforward thing, although people, usually PR people, can make it out to be more complex than it really is, and I mean c’mon it’s hardly rocket science. 

For an audience made up of tech startup founders, we covered the basics of what goes into a press release, how to pitch your story to editors, the importance of describing what the company does in layman’s language and not getting too technical or jargonistic, again nothing too earth shattering.  

Talking of shattering earths, back to the moon story… what I hadn’t realised was that, according to the prevailing theory known as the giant-impact hypothesis, the moon was formed from the ejecta of a collision between a Mars-sized object and a young Earth four and a half billion years ago.  The ensuing, blasted-out material bounded by its own gravity created the moon we see today.  Hey, this moon story just gets better and better.  In fact, it eclipses anything I had to say about what makes a good press story.   

Tomorrow, I will be attending the inaugural Scaling Up Scotland conference at Gleneagles run by The Hunter Foundation in partnership with the Scottish National Investment Bank, following an existing collaboration between the bank and Sir Tom Hunter’s ScaleUpScotland 2.0 programme. 

Expect a write-up here in the near future, and I hope to grab a word with Sir Tom himself along these lines.  I’ve heard the storied entrepreneur and philanthropist speak about the moonshot concept on a few occasions, using that term to equate entrepreneurial leaps to the act of sending spacecraft to the moon.  So, watch this space.   

The Fund in the North, guest blog by Mark Logan, chief entrepreneurial adviser to the Scottish Government

In theory, if a country wants to produce more large-scale companies, it simply needs to ensure that it is creating plenty of start-ups at the other end of the funnel, and that it provides a supportive environment such that the funnel doesn't narrow too quickly. But, in practice, it's not so simple. Start-ups located in regional ecosystems must cross a funding chasm during their journey to scale, in addition to the usual challenges of scaling. 

For example, in Scotland, early-stage start-ups are relatively well-served by the country's strength in angel syndicates. And scale-ups that have crossed the chasm will attract investor interest regardless of geography. It's when they are between these two stages that regional start-ups have relatively more difficulty in attracting scale-up capital, compared to those in larger start-up ecosystems such as London or Silicon Valley.

VCs tend to cluster within big ecosystems, and it's much easier to visit start-ups near you than it is to make a day trip, or overnight trip, to visit them further afield. This also applies to maintaining relationships after an investment, which, of course, affects the decision to invest in the first place. 

Combined with the relative sparsity of scale-up investment opportunities when compared to a larger-scale start-up ecosystem, scale-up investors consequently spend less time hunting for opportunities in regional ecosystems.  Of course, the flip-side is that, for those that do spend the time, there are exciting investments opportunities available.

Consequently, the Scottish Technology Ecosystem Review, published in August 2020, made a recommendation for a public-private partnership to create a Scale-up Fund, targeted on Scotland. The fund would both directly crowd-in scale-up capital to Scotland, and would also increase the number of scale-ups, which in turn would attract further interest from elsewhere.  

After much hard work, Par Equity, already a pioneering supporter of the Scottish start-up scene, has launched the Northern Scale-up Fund, corner-stoned by the Scottish National Investment Bank. In the prevailing investment climate, the creation of the £100m fund (with a first close of £67m) is a significant achievement. It's also exciting to see Strathclyde University, one of Europe's leading entrepreneurial institutions, participating in the fund.  The launch comes on the back of the British Business Bank's (BBB) recent announcement of the Innovation Fund for Scotland, which provides multiple funding categories, including early-stage scale-up investments of up to £5m. 

Of course, on its own, scale-up capital is not enough to accelerate Scotland's start-up ecosystem to critical mass. But it's a hugely important element in the nation's wider start-up ecosystem strategy, alongside other initiatives such as TechScaler, the Ecosystem Fund and Pathways Fund, Entrepreneurial Campus, and the ongoing partnership/integration programme between Scotland's key ecosystem-support assets, to name just a few. 

Together these and other initiatives constitute a powerful ecosystem accelerant, to the benefit of Scotland's start-ups and scale-ups. In my many years of working in Scotland's start-up sector, I can't recall a time as vibrant, with so much start-up activity, supported by such a rapidly evolving support environment.  The Northern Scale-up Fund announcement is another major step in that development.

Exits seen from both sides, by Nick Freer

“Exits seen from both sides” was the the theme at the annual Young Company Finance conference at the Surgeons Quarter in Edinburgh earlier this month, so it was appropriate that host and speaker Ana Stewart, a partner with impact investment firm Eos, relayed some of her experiences as both a startup founder and investor.

Doug Lawson, founder of MarktoMarket, a data platform for advisers, investors, and corporates operating in SME markets, outlined how February 2021 was a zenith point for deals and exits, following a nadir moment during the spring of 2020.  And in spite of the headlines around a declining deals market in 2023, Lawson said the M&A market is reasonably strong against an exceptional 2021.

When it comes to data, the devil is in the details, and while overall deal volume is only down slightly this year, there has been a sharp drop-off in scaleup capital in the £10 million plus range, and Scotland continues to underperform London and the South-East by a “substantial amount”.

Richard Lennox, who was involved in six of Skyscanner’s acquisitions during his time as a lead engineer with the online travel search site, and is now with Current Health helping to guide integration following the second largest European healthcare technology exit ever when Best Buy acquired the company for $400 million in October 2021, featured on one of the panels.

In response to a question on hiring from conference sponsor and recruiter Eden Scott, Lennox advised hiring a team to build the company, not for an exit, and to have a laser focus on product and customers.

Mark Robinson, founder and CEO of DeltaDNA, the games industry analytics company acquired by San Fransisco-headquartered Unity Technologies in 2019, said “startups are about survival” and expressed the importance of nurturing strategic partners on the basis that “the better you are networked, the better your chances for exit”.

Paul Atkinson, founding partner of Par Equity, the investment firm that was an early investor in both Current Health and DeltaDNA, said both company’s leadership teams had a deep understanding of their ecosystems and, as Atkinson put it, “that’s what we’re looking for”.

John McNicol, founder and director at Kelvin Capital concurred, “we partner with people not businesses”, and McNicol highlighted the value associated with the CFO role: “A good CFO will cost more, but is worth it, as a poor CFO can kill your business”.

M&A, deals, and investment rounds are a big part of my own agency.  While Skyscanner and Blackcircles are some way back down the road in the rear view mirror, both shaped our approach to providing strategic PR on a company’s path to transactions and exits.

This year, we have again advised on multiple deals, including LGT’s £140 million acquisition of abrdn’s discretionary fund business in the UK, The Paint Shed’s acquisition by Brewers, and Chemify’s £33 million Series A investment.

This week, we managed media relations around Paul Reid-led Trickle’s £1 million round led by Equity Gap, and the £1.9 million investment into Neuranics, a joint spinout from the University of Glasgow and the University of Edinburgh.  It was also good to see another client, fast-growth tech group Stellar Omada, receive £4.5 million of backing from BGF.

Can Scotland become Europe's energy saviour? By Jeremy Grant

Next week at Britain’s embassy in Berlin, ministers of state from the UK government, counterparts in the German government and renewable energy experts will gather for a conference on what many see as the fuel of the future: hydrogen.

The half-day event is set to wrap up with a “green whisky” tasting, highlighting malt Scotch whisky produced by distilleries that are in the process of decarbonising their operations. 

At first blush there is no obvious connection between hydrogen, whisky and the two countries. But look at a map of Europe, recall that Scotland is not short of wind, think about what’s happening with energy security amid Russia’s war in Ukraine, and it starts to make sense.

Germany is in urgent need of alternative energy sources now that it has largely weaned itself off Russian gas and as it shuts down nuclear plants. That’s left a gaping hole in the energy mix and German industry, backbone of Europe’s largest economy, is looking to hydrogen to fill the gap.

 Germany estimates that it will have to import as 70% of its hydrogen demand in future as it aims to become climate-neutral by 2045, according to a new hydrogen strategy approved by Berlin only two months ago. That’s a lot of hydrogen. But from where? 

Enter Scotland. Momentum has quietly been building in recent months among policymakers and the hydrogen industry around the idea of harnessing the massive amounts of wind power set to be generated at wind farms in the North Sea, then sending the hydrogen created using that renewable electricity down a vast undersea pipeline to the German port city of Emden. A key element of this would be the wind farms envisaged as part of the ScotWind project. 

To some, this may sound like a pipe dream. For one thing, no-one has ever built an undersea pipeline for hydrogen, certainly not one on this scale.  

Yet the nuts and bolts of how it might work were laid out last month in a report by the Net Zero Technology Centre (NZTC), an Aberdeen-based renewable energy technology consultancy funded by the UK and Scottish governments. 

This so-called “Hydrogen Backbone Link”, costing £2.7 billion, would allow Scotland to meet up to 10% of Europe’s projected hydrogen import demand by the mid-2030s. Wood Mackenzie, an Edinburgh-based energy consultancy, reckons there is an investment case.

The technological barriers are huge, including how to deal with leakage and the fact that hydrogen corrodes metal in a process known as embrittlement. What about sabotage? 

On the plus side, there seems to be no shortage of businesses interested in Scotland’s renewables sector, as I wrote recently. Nor of businesses working on technical solutions, as I learned at the SPE Offshore Europe renewable energy conference in Aberdeen this month. The Italian Trade Agency hosted 24 Italian companies at a large stand, including one re-engineering valve components to allow conversion of pipes used for methane to hydrogen.

But the biggest obstacle is lack of alignment in Britain on policy, strategy and planning, not helped by the often dysfunctional relationship between the UK and Scottish governments.

Before the whisky tasting in Berlin, the UK and German governments are due to sign a “joint declaration of intent” in the hydrogen sector. Let’s see what comes of it. 

Startup Thinking: A Lifeline for Healthcare, guest blog by Dame Anna Dominiczak, Chief Scientist (Health) for the Scottish Government, and Regius Professor of Medicine at the University of Glasgow

It is not enough to simply plug technology into existing healthcare interventions, we must draw inspiration not only from what startups have achieved but from how they have gone about achieving it. Startups are not just tech businesses; startups live by a methodology of learning and testing, a willingness to take risks, resilience in the face of failure, and an unwavering pursuit of growth.

Embracing startup mindset as a practice is not entirely dissimilar to my specialist area of precision medicine. Where one involves the practice of incorporating the pool of mechanistic tools in our arsenal, factoring in all discoveries of molecular medicine to improve diagnostics and treatments, the other requires the adoption of an entire working culture and mindset in order to innovate. Both involve a holistic approach.

There is no shortage of inspiring ideas in health and care tech, not least in a country with such a rich history of innovation. Breakthroughs in this industry are not rare, but the full potential of their applicability and impact is not always reached. The real challenge we face is in the execution and the adoption of these concepts at scale.

While healthcare innovation faces unique challenges, (the high stakes of patient care,  data protection, the complexity of regulations, etc.) these challenges should not deter us from pursuing innovation. Progress has been made at a state and an industry level to address these challenges:  NHS Innovation Hubs (previously known as Test Beds) offer real clinical settings for testing products. Dedicated groups assist in navigating these bureaucratic hurdles. Specialised funds have been established to support concept development in healthtech.

These interventions seek to break down these barriers, but  to bridge this gap in healthtech we must work together in a "triple helix partnership" between the NHS, academia, and industry to create a seamless pipeline from research and development to real-world implementation. This approach holds the potential to reduce waiting lists, improve patient outcomes, and boost economic growth.

Next week, I will join Mark Logan, the Chief Entrepreneur for the Scottish Government, to discuss how Scotland can embrace entrepreneurial and startup thinking to address our health and care challenges. This event is our opportunity to unite, share insights, and chart a new course for healthcare innovation. We will discuss how we can capitalise on the momentum of ideas, how to adopt innovation at scale, and we will discuss both the barriers to innovation and the infrastructure needed to break them down.

If we are to genuinely effect change we must involve the people who are directly involved in the delivery of healthcare, and not rely as heavily on the tech industry itself to intervene in health and care. I look forward to welcoming clinicians, healthcare professionals, and people from across the medical community, who all share the desire to lean into entrepreneurial thinking.

Introducing: Techscaler & NHS Innovation Hubs event takes place at the Assembly Rooms in Edinburgh on Friday 22nd September.

Ecosystem builders, blood, sweat, and tears, by Nick Freer

When I heard the words “allow for a bit of messiness”, my thoughts strayed to the state of our near teenage daughter’s bedroom, but the line had in fact just been delivered by Mark Logan at the launch of the second phase of the Scottish Government’s Ecosystem Fund last week in Edinburgh.

To paraphrase, being an entrepreneur and building a fast-growth business is inherently difficult, and one thing it’s not going to be is clean-cut.

Chief entrepreneurial adviser to the government and author of the Scottish Tech Ecosystem Review in 2020, Logan, who wrote for this column recently, remarked that “ecosystem builder” is now a noun in Scottish parlance for the first time, and that many of these ecosystem builders were present in the room.  “What you do is not a career, it’s a vocation, and I know that you give your blood, sweat, and tears to that vocation.”

The Scottish Enterprise Ecosystem Fund is open to organisations that support entrepreneurs and startup activity or enterprise education, who can submit proposals to receive grants of between £10,000 and £50,000 and, in exceptional circumstances, in the region of £100,000.

Government-supported interventions can, Logan believes, help to stimulate  our ecosystem, and take it to the next level.  The prize?  A new, modern, enlightened Scotland, and an economic powerhouse to boot.  But it requires a degree of patience and conviction - such investments take time to feed through to startup success.

At the same time, outcomes and successes can be quite “abstract”, what he describes as “second, third, and fourth order effects”.

Fast forward to the Q&A session at the close, and one question from the floor quizzed whether or not grants of £50k can really make a difference, or indeed if the total £1.6 million value of the fund can shift the dial.  It turns out the questioner’s organisation has already received grant funding towards the top of the scale, but I guess you can’t please all of the people all of the time.

What is true is that this fund didn’t even exist a few years’ back, yes everyone would like it to be bigger, but we’re living in straitened economic times, although clearly not everyone has read the memo.    

Back to Mark Logan’s address, which followed opening remarks from cabinet secretary Neil Gray in which he said there were gaps between the potential and reality of what the nation’s entrepreneurial scene can achieve, the former Skyscanner COO reflected on learnings from his time at the global flight and travel search site.

While you can put the three pillars of education, infrastructure, and funding in place, Logan said, the country’s startups must also face outwards: “Skyscanner actively learned from best practice worldwide.  The same requirement applies to our entrepreneurial ecosystem.”

A previous grant recipient from the first fund, Nick Murray of Startup Grind Scotland and Foras, illustrated how much can be achieved with a £45k grant from the Ecosystem Fund when he got up to provide another keynote on the day.  Taking twenty startup founders to San Francisco in 2021, one of the fixtures of the Silicon Valley trip was a collaboration with Scottish Development International which saw the founders pitch to 50 local venture capital firms, with three of the startups going on to receive related investment.

As they say, the proof of the pudding is in the eating.  Or something like that.    

Food for thought, by Jeremy Grant

Picking up the latest free magazine from Tesco last week, I noticed a promotional paradox.

Its pages were packed with appetising-looking recipes for healthy dishes such as “Spiced cauliflower steak burgers” and “Charred summer greens”.

Yet most of the magazine’s advertisements carried a different nutritional proposition: processed foods such as Pringles snacks, Dairylea cheese triangles, KitKat cereal (yes, really) and a recipe kit for French’s “Buttermilk Chicken with Gravy Mix & Fries Seasoning”. All, of course, available at Tesco, as the adverts make clear.

We live in a world of consumer choice. Yet we also live in a world that is more complicated than that, as I was reminded at an event hosted last week at the Edinburgh offices of Greenbank, the sustainable and ethical investing arm of Rathbones, a UK investment manager.

What people eat isn’t defined solely by personal preference. It’s driven by the “food environment”, made up of the availability of healthy foods, affordability and advertising by food companies.

In the current environment, defined for so many by the cost of living crisis, what drives food choice is, increasingly, affordability — as the David Hume Institute showed in its latest quarterly “Understanding Scotland” survey, unveiled at the event.

Produced with Diffley Partnership and Charlotte Street Partners, the survey polls over 2,000 people across Scotland on a range of socio-economic issues. It showed that over half (52%) of people are shopping for food based on price rather than health, and over a quarter (28%) are reducing the quantity or quality of fruits and vegetables in their diet. A similar proportion (27%) are consuming more packaged or processed foods.

Food companies obviously have a role to play here. But we can’t rely on voluntary initiatives. That’s why investors are also important, allocating capital to where change is most likely. Having accurate data on what companies are doing – or not doing – is therefore vital when it comes to investment decisions.

Greenbank has been engaging with government on nutrition since 2021 when it set up the Investor Coalition on Food Policy, created to provide policy feedback on the National Food Strategy, produced that year by Leon restaurant chain co-founder Henry Dimbleby.

The coalition, which represents over 30 investors with over £6 trillion in assets, is calling for the introduction of mandatory reporting by food companies of what and how much they sell, including sales of protein by type, sales of fruit and vegetables and sales of major nutrients (fibre, saturated fat, sugar and salt).

“A lack of consistent data makes it hard for investors to evaluate a company’s impact on the environment and health and to measure the risk associated with these exposures,” says Sophie Lawrence, Greenbank’s Stewardship and Engagement Lead, adding that voluntary reporting has “consistently failed to deliver on promises of improved health outcomes”.

This is positive. But it is not likely alone to deal with the deficiencies in our food environment. For one thing, in the absence of choices, people end up being captured by what food companies tell them via advertising, which is used to defend and grow market share.

As Pete Ritchie, Director of Nourish Scotland, told the Greenbank event: “We should stop treating nutrition as a private responsibility of citizens and make ensuring good public nutrition a key responsibility of governments.”

Scotland, the Start-up Nation, guest blog by Mark Logan, chief entrepreneurial adviser to the Scottish Government

It is sometimes forgotten that every job existing today does so because someone, somewhere, at some time started something.  In a world of ever accelerating change, our economy must renew itself several times per generation if the jobs of tomorrow are going to exist.  That renewal doesn’t happen magically; it needs starters and the best possible support environment within which those starters – or entrepreneurs, if you prefer - can succeed.   In other words, it has never been more important for Scotland to become a Start-up Nation, which we can define as a country that has normalised entrepreneurship as a career option, and which provides an excellent environment in which to start and grow a company.   How do we meet that challenge, renewing opportunity for our children such that we might look them in the eye with hope rather than mumbled excuses and lamentations about a glorious past now lost?

The first prerequisite is that we need to be systematic – we must treat the entrepreneurial support environment as a system. Its input is talent, and its output is start-ups.   The levers that operate upon that system are Education, Infrastructure and Funding.  How we manipulate those levers determines the strength of our output signal.

For illustration, let’s consider the first of these levers, Education. Its role in this context is to normalise entrepreneurship as a career path, equipping people with the interest and skills to consider either starting or joining an early-stage business.  We currently don’t sufficiently expose school-age children and, later, students to entrepreneurial thinking and technique. As a result, graduates too often shy away from joining a start-up, preferring to work instead in a “proper” company.  It’s easy to see how such omissions directly affect the number, strength and scale of start-ups that Scotland can subsequently produce.

This also illuminates the second prerequisite to Scotland becoming a world-class Start-up Nation: we need to work together, ignoring the organisational boundaries of government departments, its agencies and of private industry stakeholders. In this regard, a shared, systematic model of the entrepreneurial system acts as a binding agent for support initiatives and policy development.  When we coalesce around a common model of the entrepreneurial system, support interventions become complementary and mutually reinforcing.   

In the past, individual stakeholders have tended to operate in isolation of each other. That hasn’t worked very well.  I’m pleased to be able to say that this is changing; collaboration and coordination within the entrepreneurial support ecosystem have strengthened considerably in recent years.  The result will be more and better start-ups and more opportunities for our people.    

The final prerequisite to becoming a start-up nation is that we need to stay the course. Our goal is a generational endeavour, and depends on strategic consistency, sustained over many years.  We’ve seen, in the examples of Finland, Estonia, Lithuania, Denmark and other comparably sized nations how world-class entrepreneurial ecosystems can be built if a political consensus can be established and held for long enough for it to bear fruit.

Such economic performance is well within Scotland’s reach. If we adhere to these prerequisites -  be systematic, work together, and hold the line – we can grasp it.  Our children will thank us for that discipline.

Community is key to building Scotland's startup scene, guest blog by Barry McDonald, VP of Community Development and Engagement, CodeBase

In November, Techscaler will have been operational for a year, and as we look forward to the next steps of the programme I wanted to reflect on something that has been, and will continue to be, instrumental in supporting the Scottish tech startup ecosystem: the incredible value of community.

And, of course, we have seen this whole idea of community play out over the last week since we heard the saddening news that CodeClan had ceased operations.  The rallying call in response, from so many individuals and organisations, has been a heartening upside to what has otherwise been such a difficult time for students and staff affected.

In the fast-paced and ever-evolving world of tech startups, it's easy to get caught up in the frenzy of coding, hustling, and chasing success. But let's not forget that behind every great startup, there's a thriving ecosystem of support, collaboration, and shared experiences that propels us forward. Empowering and supportive communities can help founders and early startup teams achieve their potential success.

Communities have this magical ability to bring together individuals who are passionate about similar goals and interests. Whether it's through industry events, meetups, or online communities, connecting with like-minded people provides us with an opportunity to learn, grow, and exchange ideas. Through the Techscaler programme, founders and startup team members in Scotland have access to all of these, helping them develop their startups in a supportive and nurturing environment.

Recently, we've rolled out Unfiltered and Unplugged networking events across Edinburgh, Glasgow, Dundee, Inverness, Aberdeen and Stirling, to build connections with the tech community across Scotland. We’ve hosted, collaborated on and supported events across the ecosystem, on topics including traveltech, IP, marketing, diversity, equity and inclusion, the metaverse, blockchain, funding readiness and much more. This summer, with Panache Ventures, we’re holding events to bring VC insights and tech founders together. The events calendar is building for the year ahead and we're only just getting started, and there is a host of exciting community-driven events to be announced soon.

One of the most remarkable aspects of the tech startup community is its willingness to help one another. It's a world where experienced entrepreneurs, industry veterans, and bright-eyed newcomers all come together, ready to lend a helping hand, share their insights, and offer guidance based on their own triumphs and challenges.

Being part of a vibrant startup community has countless advantages. It opens doors to mentorship opportunities, partnerships, and collaborations that can propel our ventures to new heights. It also exposes us to diverse perspectives, innovative ideas, and the latest trends in technology. The collective wisdom and experience of the community can save us from making rookie mistakes and accelerate our learning curve.

But let's not overlook the emotional support that the community provides. The startup journey can be an exhilarating rollercoaster ride, filled with highs and lows. Having a network of fellow entrepreneurs who truly understand the highs of securing funding or the lows of a failed product launch is invaluable. These connections offer a safe space to vent, seek advice, and find solace during tough times. It's a reminder that we're not alone in this wild entrepreneurial adventure.

So, let's cherish and nurture the community that surrounds us. Let's actively participate, engage, and contribute, knowing that the more we give, the more we receive. Share your knowledge, celebrate wins and failures, lend a helping hand, and be open to learning from others. Together, we can shape a thriving ecosystem that breeds innovation, collaboration, and endless possibilities and continue building something remarkable together, to see entrepreneurs across Scotland succeed.

Shattered Nation, guest blog by Danny Dorling, Halford Mackinder Professor at the University of Oxford

I am not pessimistic when it comes to global trends. But closer to home the statistics are a lot less rosy. People are feeling shattered. Hopes are being shattered. Much of the fabric of society feels shattered.

Whether it’s our children’s education, the availability of good quality and affordable housing, the ability of the NHS to care for us or of the economy to thrive – all shattered. Many of those previously just coping, can no longer cope.

This might feel as true for you in Scotland as it does for me, living in England. But there are positive changes in Scotland which show us a better way forward.

Last month the Financial Fairness Trust reported that nearly two million British households were missing three or more meals a month, due to cost. Food banks are proliferating but it is the Scottish Government that is proposing a plan to begin to make food banks unnecessary.

In our shattered nation, children in families of three children or more, are especially likely to go hungry. This is the direct result of policies penalising larger families. In Scotland that trend is being reversed by the Scottish Child Payment, ensuring that all families on Universal Credit, and other qualifying benefits, receive an extra £25 a week for every child up to age sixteen.

Unfortunately, Labour Party leader Keir Starmer has pledged to keep the two-child benefit limit in England, shattering what could have been a consensus for the healthier, fairer future of the UK.

Levels of debt have increased for millions of people, while a very few have seen their riches soar. Inequality has grown to levels higher than can be found almost anywhere else in Europe. By 2021 only Bulgaria was more unequal than the UK by income.

In England the policy of the two main political parties is to stagger forward, keeping a stiff upper lip. Politicians in England promise only minor remedial actions with short term impact. Those in Northern Ireland ask for more and have the lowest child poverty rate in the UK very similar to Scotland’s.

In Wales anger at England’s apathy grows. People ask why are the basics no longer within reach? A home for everyone. Teachers who are not exhausted. Care for those who need it. The choice to do work that is useful. And food for everyone who is hungry. Food they can buy with money they have – not that they beg for.

People there are increasingly willing to ask who is taking too big a share of what we need? Of homes, of spending on education, of our time to care for others or in profits from basic services. Why is there not enough left for those who are hungry or homeless? And people are asking why we tolerate this more than any other people in Europe today?

The alternatives to the shattering already exist. They are being attempted in Scotland – today. They are being argued for in Wales – now. They have been in place in many countries in much of the rest of Europe for decades.

We once worked together to eradicate soup kitchens and to create a more equal, dynamic economy, even in England, we can do it again.

Professor Danny Dorling will be previewing his latest book ‘Shattered Nation’ at the RSE in Edinburgh hosted by the David Hume Institute and Scotland’s Future Forum on 23rd August. Shattered Nation is published by Verso on September 19th.

CodeClan 2.0, by Nick Freer

As a press adviser to both CodeClan and CodeBase, two integral pieces of Scotland’s technology ecosystem and pinpointed by Mark Logan in his 2020 STER report, it was encouraging to see the breaking news at time of writing (Thursday) around a rescue plan for the digital skills academy led by the Scottish Government and the UK’s largest tech incubator.

Affected students will now be able to complete their courses, while CodeClan trainers have the option to deliver the remaining courses fully paid.  For non-training staff, CodeClan and a number of other organisations are encouraging applications for a variety of open roles.

After a really difficult week for all those concerned, and what I gather was an inordinate amount of activity in the background, yesterday’s communique was a silver lining to a grey cloud that has hung over our tech scene since last Friday.  In addition to the CodeClan trainers, there is also a collective hope that the non-training staff will find new roles in quick time.

If this happens, it will show that not only can we recycle talent, but also that the Scottish tech ecosystem can be characterised by empathy and caring.  This would also equate to some form of natural justice, when you consider that CodeClan’s raison d’être was to help people find employment in Scotland’s tech sector.

As the operation formerly known as CodeClan morphs into a new existence, I wanted to share some takeaways from the CodeClan I knew before operations ceased and the liquidators were called in.

Irrespective of the underlying financial picture, what the CodeClan team achieved over the years should be lauded.  Over two thousand graduates in software development and data, graduates who were then placed with leading corporate brands - companies like Skyscanner, FanDuel, Baillie Gifford, DC Thomson, BlackRock, and Tesco Bank.

What shouldn’t be forgotten is that graduates also joined much smaller companies, including startups that only had a handful of people in total.  In these companies, they often became key workers from day one.   

CodeClan was also a well-documented champion for women in tech, bringing to attention the alarming statistics on how few women are forecast to gain employment in a UK tech job market predicted to grow six-fold to £30 billion by 2025, and providing funded, free, and on demand courses to address this.

Similarly, a series of CodeClan youth academies around the country aimed to support young people, often from marginalised communities, positioned to get an overlooked demographic of the population into tech jobs.

Hopefully, the transplanted CodeClan 2.0 offering will continue to be all this and more.

Summer swing

In spite of some sporadic family vacation time in Scotland over the last few weeks, I once again failed to fully commit to the out of office setting during the always elusive, so-called ‘summer break’.

But hey ho, business doesn’t stop and newspaper printing continues to roll when the sun reaches its highest arc in the northern hemisphere.

Don’t worry, I still made it to the beach (and Sutherland’s beaches still take some beating in my book)…only with the laptop packed alongside the sun cream and sandwiches.

Action needed now to meet Scotland's offshore wind ambitions, by Jeremy Grant

If you think that things are starting to slip when it comes to meeting Britain’s net zero targets, you are not alone.  

In a letter sent to prime minister Rishi Sunak a couple of weeks ago, over 100 businesses warned that “without a renewed focus and commitment to delivery from the government, the UK will be left behind.”

Among them were not only some recognisable high street names, such as Tesco and IKEA, but nine members of the 20 consortia involved in the vast ScotWind offshore wind project in the North Sea. 

They included Siemens of Germany, Danish energy group Orsted, French utility Engie, BP, SSE and Fred Olsen Renewables, partner in one of the consortia with Sweden’s Vattenfall.

While it might be tempting for some to blame slippage on Sunak’s tighter embrace of fossil fuels — seen in last week’s announcement that the government would continue to grant licences to drill for North Sea oil — the reality is that an awkward combination of inflation and insufficient action on the policy front threaten progress on offshore wind.

Vattenfall set alarm bells ringing last month by not only suspending work on a large wind project off the Norfolk coast, citing a 40 per cent increase in costs (much of it supply chain-related thanks to Russia’s war in Ukraine), but also warning that this was putting “significant pressure on all new offshore wind projects”.

The move has cast doubt on the UK’s ambition to triple offshore wind capacity to 50 gigawatts (GW) by 2050, from around 14GW now. ScotWind’s importance here can’t be overstated given that its 20 consortia are together to deliver 27.5GW of power — over half the 2050 target. 

While it’s admittedly still relatively early days for ScotWind, there are some key issues that need fixed now.

One is an urgent overhaul of planning and regulatory regimes to give businesses the confidence to properly sequence the investments needed to build out the various phases of offshore wind projects. 

In a paper out last week, the Scottish National Investment Bank highlighted that because oil and gas revenue declines will not necessarily correlate with an increase in offshore wind supply contracts, a “viable supply chain in place at the point of final investment decisions by offshore wind operators will be crucial”. 

Another issue concerns “contracts for difference” (CfDs), a mechanism in place since 2015 through which the government guarantees the price that offshore wind operators receive for selling their electricity. 

Scottish Renewables, which represents the private sector, says that the parameters used for the current auction in which developers bid for CfDs don’t take in to account the effect of supply chain cost pressures exceeding headline rates of inflation and that the next one in 2024 must “adequately reflect the prevailing economic conditions at the time”. 

The Department for Energy Security and Net Zero recently ran a “call for evidence” on how the CfD could be improved. “We are now considering responses and will publish next steps over the summer,” a spokesperson says.

Meanwhile, there are sensible-sounding recommendations on supply chains, grids and consenting in an April report by the UK government’s “offshore wind champion”, Tim Pick, appointed to this new role in 2022. 

But the time for reports and target-setting is over. Action is needed, and urgently.

Business sponsorship should start with community, by Jeremy Grant

When cellist Natalie Clein and pianist Julia Hamos perform at the “Absolute Classics” festival on the outskirts of Dumfries this weekend, the piano on stage will be one made by Blüthner, a German company that’s been making the instrument since 1853.

It’s also one of two that have been on loan from Blüthner for the last five years. “Without these pianos, it wouldn’t be possible to bring world class pianistic quality to the communities of Dumfries and Galloway,” says Alex McQuiston, festival director.

Business sponsorship of the arts is nothing new. But at a time of brutal budgetary constraints and scant government funding, its role in ensuring that the arts in Scotland survive, let alone thrive, has become more important than ever.

There was a reminder of the parlous financial state of the arts in Scotland last week with news that six theatres had agreed to share resources and create a new company under a “theatre survival plan” designed to avert closures. And had it not been for a screeching U-turn by Holyrood in February, Creative Scotland — the national arts agency — would have suffered a 10 percent cut to its 2023/14 budget.

As the instrumental philanthropy of Blüthner shows, sponsorship is no longer just about cash in exchange for ringside tickets and a drinks reception for clients in the concert interval (although cash is obviously still vital).

These days, it’s about something else too: connecting with community. Given the lessons from the pandemic, it’s appropriate that one of the three themes running through the Edinburgh International Festival, which kicks off next week, is “Community over chaos”.

One of the festival’s supporters, investment management firm Baillie Gifford, is billed not as “sponsor” but as “Learning and Engagement Partner”. That’s because it supports the festival’s year-long programme of activities in schools and community groups in Edinburgh, including bringing the London Symphony Orchestra to play for residents in hospitals.

TikTok has another take on community support through its sponsorship of the Edinburgh Festival Fringe, enabling top comedy performers on its platform to bring their content to the live stage for the first time. The idea is that talent being discovered by the virtual community should be able to find an audience among the physical community as well.

Community can of course include the people associated with the workplace. Cirrus Logic is a Texas-based semiconductor company with its European headquarters in Edinburgh, where it designs the tiny chips embedded in mobile phones and laptops that govern how the devices’ audio performs.

The company started sponsoring the Fringe last year after its British chairman read about an emergency funding appeal it had issued in the aftermath of the pandemic. Its support involves not only part-funding operating expenses but also hosting Fringe performers every Friday  at its offices for employees and their families.

There is also a role for sponsorship in reaching communities that don’t have much access to the arts. Thanks to matching funding from Culture & Business Scotland, a charity that links business with the culture sector, Absolute Classics has been able to film its concerts for broadcast later online, helping to combat the isolating effects of living in remote communities in southwest Scotland.

The more businesses that buy into this, the better for us all.

Education can be transformational on the startup journey, guest blog by Shona Marsh, Head of Education Programmes, CodeBase

The more I’ve worked with startups, the clearer it’s become that there are key inflection points on the journey where intervention in the form of education can be transformational.  Today, education is front and centre of the Techscaler programme run by CodeBase, which is designed to cover all the bases, from ideation through to early stage, growth, and scaling.

While our First Steps initiative was launched at Barclays Eagle Labs in May, Next Steps is our course to guide founders towards product-market-fit (and applications are open now).  In his Scottish Technology Ecosystem Review (STER) in 2020, Mark Logan makes clear reference to the challenge Scottish startups find in scaling, and that the two main reasons are that the product or service doesn’t fit the intended market, or there is product-market fit but the organisation isn’t capable of capitalising on this and driving subsequent growth.

Our scaleup partnership with Silicon Valley-based Reforge follows on from Next Steps and is an opportunity to bring that knowledge to Scotland, and show that we can build these companies in situ and see the knock-on benefits, namely economic impact, talent recycling, and innovation loops.  Along these lines, Reforge is more focused on helping specialised staff capitalise on growth opportunities.

Skyscanner and FanDuel are Scottish examples of unicorns (a startup achieving $1 billion valuation within ten years of creation), with both companies achieving this status back in 2015/2016.  However, Mark Logan makes reference to there being no room for historical complacency, with Scotland needing to grow with influence outside of our local best practice, and that we can’t rely on the legacies of Skyscanner, where Logan was COO, and FanDuel to translate to future startup success.

Reforge brings this external perspective, from the most renowned startup ecosystem in the world, Silicon Valley. This perpetual cycle of success and growth has led to the recycling of talent into the ecosystem to both accelerate the growth of existing startups, and lead to the creation of a large volume of new startups that are built and grown quicker.

As Logan quotes in STER: “It’s generally not well understood within the Scottish ecosystem (and many others) how a startup should go about the process of iterating its product or service to the point where it fits the needs of its market… it is very common to see startups declare that product-market fit has been achieved, and start to attempt scaling when, in fact, the market isn’t interested in the product.  This situation always ends unhappily.  Silicon Valley has a well established playbook for how to go about this process and how to measure progress to the product-fit goal.  It’s vital that this playbook is widely understood within our ecosystem.”

In my own career, working at the University of Oxford’s Entrepreneurship Centre and with scaleups like Airbnb, I have seen the way in which domain expertise can be expanded through the development of new skills and knowledge.  It is an ethos I have brought to my role with CodeBase.

While you can encourage, if not teach, an entrepreneurial mindset, you can teach the skills to build your startup, through leadership, product management, understanding customer needs, and simply resilience - an essential skill when building a business.

World class entrepreneurial campuses, guest blog by Joe Little, Honorary Professor and Digital Entrepreneur in Residence at the University of Stirling

Last year, I was asked, along with my fellow Entrepreneur in Residence Ross Tuffee, to write a paper on how Entrepreneurial Campuses can help transform Scotland’s technology ecosystem. This was one of the recommendations from Mark Logan’s Scottish Technology Ecosystem Review in 2020.

Rather than interviewing our institutions close to home to find best practice, we felt a more effective change would come through learning from world class entrepreneurial campuses such as Stanford and MIT in the States, Aalto in Finland, Imperial in London, and DTU in Denmark.  We would then look at how institutions in Scotland could replicate to help transform Scotland’s regional economies.

Institutions like Stanford and MIT have recognisably transformed the regions where they are located. No longer do students aim to just do an undergraduate degree, then move elsewhere to develop their career and hatch business ideas…they stay.

They stay because the resources they need in terms of academic support, venture funding, mentoring, and technology are all to hand because over the course of several decades a virtuous cycle of engagement, enrichment, and a ‘giving back’ approach has made it happen.

Best-of-class universities encourage faculties and students to collaborate for solutions, and enable faculties to take sabbaticals to develop their business startups, importantly with the proviso that they return to teach.

They open up their research, making it easier for industry to discover them.  In turn, this encourages industry to show up with their problems and help co-create solutions.

By way of a stark comparison, by the end the conversations we had with some of these revered places of entrepreneurial learning, we had developed both a both plan and potential solution….compared to the experience here where sadly I might get a call back 9 months later to find out if we still had any interest.

In fact, what we found was that very few universities in Scotland made it easy for industry to engage and, where there was a possibility to do business, excessive licensing and lack of resources at the university to sort out legalities became the ultimate barrier.

What’s needed for real growth and transformative change is for all universities and colleges to embrace a direction of change that inspires the development of a more entrepreneurial mindset in their students, staff, and academics by promoting and teaching entrepreneurship.

They need to provide environments for students to engage in creating startups, and encourage cross-faculty participation in solving global challenges.

They need to make it simple to start a business, spin out an opportunity, and not demand an excessive cut of the result by way of equity.

But most of all, they need to make it far easier for industry to do business by making our research more discoverable and making our facilities more accessible.  In return, industry needs to re-engage, and share their problems and ideas more with academia.

Finally, we also need alumni relations to transform from the scary cap in hand requests for funds to a genuine connection and request for support. Our colleges and universities need these alumni back. We need alumni to help mentor students and faculties through this new direction of travel, to help them see the value in their research and to help create successful startups.

To Scale Up, we must also Scale Deep, guest blog by Mark Logan, chief entrepreneurial adviser to The Scottish Government

Mention entrepreneurship policy in Scotland and you’ll quickly discover that two divergent viewpoints exist, each held as passionately.   The first says that policy support should be focussed exclusively on  high-growth potential start-ups, or Scale-Ups, for short.  The second prefers that efforts instead be focussed on community entrepreneurship, or Scale-Deeps.

Both views, individually held, are wrong.

It’s easy to understand the case for focussing on Scale-Ups.  Those that break through to success create lots of relatively high-paying jobs and considerable tax revenues.  They also instil a helpful sense of confidence in the business community that Scotland can compete internationally, with the consequent ambition-raising that follows it.  This can become a virtuous circle.

In contrast to Scale-Ups, which may employ hundreds or even thousands of people, Scale-Deeps usually employ less than ten people. This is why they are often dismissed as not worthy of policy support – the marginal cost of spending time and money on nurturing Scale-Deeps seems, at first glance, to significantly outweigh the marginal benefits of doing so.   

But look again. Scale-Deeps drive the economy in three important ways: firstly, through their sheer number (provided that the right environment exists to support their formation);  secondly, because of their wide geographic distribution, bringing jobs to places that Scale-Ups usually don’t reach; and, thirdly, because their product or service almost always directly benefits the location in which they are based. This is rarely the case with Scale-Ups. Scale-Deeps directly raise the country’s wellbeing index and reduce its social security bill, and in a more uniform fashion. They are an integral part of a functioning, successful society.

Over decades, industrial policy has, in general, favoured either Scale-Up or Scale-Deep support, but not both.  This is a mistake, based on the erroneous belief that it costs twice as much to support both categories than to support either.   Such a belief ignores the considerable overlap in the respective support needs of early-stage Scale-Up Scale-Deep founders.  It also crucially ignores the symbiosis between the Scale-Up and Scale-Deep categories, and the fly-wheel effect that can be generated when both categories are well represented.

What is the essence of this symbiosis? Successful Scale-Ups act as an attractor into entrepreneurship – nothing succeeds like success, after all. In the other direction, nurturing the creation of a large network of Scale-Deeps helps to normalise entrepreneurship within society. High-growth start-ups emerge more frequently in a country that exhibits a general culture of entrepreneurship and that is at ease within that culture. They emerge rarely within an otherwise sterile entrepreneurial landscape.

To act only upon one category is a policy myopia that, in times past, has rendered our national strategy for entrepreneurship incomplete and incoherent. It’s akin to attempting to grow Giant Redwoods without also nurturing the forest floor that brings them forth. Scotland needs Scale-Ups and Scale-Deeps, and they need each other. Our entrepreneurial development strategy must embrace this connection.