Innovation nation: keeping Scotland at the forefront of science and technology research

Given the well-publicised problems with the STEM pipeline, from getting young people to take science and technology subjects in school to gender imbalance, you might be forgiven for thinking that Scotland was lagging behind when it comes to science and engineering innovation and research, but this is far from the case. 

In fact, 77 per cent of Scottish research was classified as either world leading or internationally excellent in the most recent Research Excellence Framework exercise and 85.9 per cent was judged to have an outstanding or very considerable impact on the economy, society and culture.

There is, says Rebekah Widdowfield, chief executive of the Royal Society of Edinburgh (RSE), “a lot to be very pleased about”.

She points to a number of areas where Scotland is renowned, such as life sciences, photonics, agriculture and big data.

“We’re really lucky in Scotland. We’ve got quality universities and we’ve got quality research within that,” she says.

Widdowfield notes that Scotland’s long history as an innovative nation, following in the footsteps of pioneers such as James Watt, James Clerk Maxwell and Alexander Fleming, “lays solid foundations”, but with regards to current strengths, it has a couple of other advantages.

“I think the size helps in Scotland as well,” she says. “So having 19 institutions in a relatively small country means that there’s an ability to collaborate in a way that’s, for example, a bit more difficult maybe even in a country like England, where you’ve got a lot more institutions over a bigger area.

“And I guess the other thing is, science is, as you know, a global endeavour and I think that cross-fertilisation of ideas by collaborating with other countries and by the huge input that Scotland’s research base gets from researchers, both from the European Union and internationally, is a real strength as well.”

Andy Porter, Professor of Medical Biotechnology at the University of Aberdeen and director of the Scottish Biologics Facility, also mentions collaboration as a key strength. 

He tells Holyrood: “The pooling review has just come out from the Scottish Funding Council and one of the great strengths of pooling has been collaboration.

“Scotland isn’t that big, really, and by forcing people to collaborate, I think that’s been a huge success and it’s really improved the quality of the outcomes that we’ve generated.”

The Scottish Funding Council (SFC) review, published in August, looked at the benefits of bringing £155m of SFC funding for science research and £340m from other sources together into eleven research pools since 2005.

The review found that the research pooling initiative has “built critical mass and research excellence in a number of disciplines important to Scotland’s research base and continued global science leadership” and that outputs from the pools looked at were “highly cited and exceed the UK average”.

But it recommends that from now on, funding is more integrated and linked to other research and innovation structures to address cross-disciplinary challenges such as decarbonisation.

It also notes that there have been “lost opportunities” to create closer alignment with Scottish innovation centres.

Launched in 2012, with funding from the SFC along with support from Scottish Enterprise and Highlands and Islands Enterprise, £120m was invested between 2013-18 in setting up eight innovation centres dedicated to driving growth in sensors and the internet of things, data and AI, stratified medicine, digital health, aquaculture, oil and gas, biotechnology and construction.

The centres connect academics doing specialist research in the field with businesses working in the sector and relevant public and third sector bodies to encourage innovation, collaboration, knowledge exchange and commercialisation, as well as linking to sources of funding.

They also run funded internships, secondments and BSc, MSc and PhD programmes.

Porter says they provide a “kind of pipeline” from “really top-quality fundamental research through to seeing some kind of value from those assets as they’re developed”.

Links and partnership between research and business is improving in Scotland, Widdowfield says, driven by innovation centres and Interface, a central hub set up in 2005 to link businesses with universities and research institutes in the life sciences.

However, she notes that business expenditure in Scotland on research and development remains “very low and low compared to the [rest of the] UK, let alone elsewhere” and there is “not so much a weakness as an opportunity” to commercialise research more.

The RSE itself runs an enterprise fellowship scheme, and a recent evaluation found that since it began in 1997, it has created 166 businesses, 81 per cent of which were still operating after five years, compared with an average of 45 per cent for start-ups and spin-outs.

The scheme had added nearly £170m annual GVA to the global economy, £77.3m of that in Scotland, and over 3,000 jobs, almost half in Scotland.

“I think that just shows that there is more potential to be tapped in the research base than we’re tapping at the moment,” says Widdowfield.

“And we perhaps need to be investing more in that sort of side of things, because for me, as well, it’s not just about the benefits of the economy, it’s also the benefits to society.

“So, you know, these are people who are looking at the sorts of technologies that will help improve our lives, whether it’s about the diagnosis of disease or things that are supporting sustainability.

“So there’s all sorts of other reasons for investing in that kind of work that are beyond what the economic impact is as well.”

Attitudes towards entrepreneurship have changed, Porter says.

“It’s quite interesting how we’re seeing some of the younger universities coming through in certain areas now, so West of Scotland, Abertay, as well as, you know, Aberdeen does very well in this space, but it’s not just the old guard that are embracing the idea of spin-out, some of the younger universities are doing that very well now.

“They see that as an opportunity where they can be more flexible, possibly, and more fleet of foot than some of the older institutions and are doing very well.”

However, a challenge for Scotland in terms of research from business is that a high proportion of Scottish businesses are SMEs, which may not have the capacity to even identify where research might help them, let alone carry it out, which is one of the issues that the innovation centres are designed to address.

Whereas on average, across the UK, 67 per cent of R&D is carried out by businesses and 24 per cent in higher education, in Scotland, it is 46 per cent for both.

This is also seen in the lower proportion of business-based research funding that comes to Scotland.

Funding for research comes from a mixture of higher education funding councils, research councils, EU framework programmes, the Royal Society, R&D tax credits and Innovate UK, the UK’s innovation agency, as well as, at later stages, venture capital for products that have commercial potential.

For Porter, whose work on drug discovery crosses over between academic and commercial, getting funding can be tough anyway and “the geography of Scotland makes that even tougher” because it’s far from the UK ‘golden triangle’ for life sciences venture capital of Oxford, Cambridge and London.

He explains: “I think for a lot of investors … they like to be an hour’s drive from the companies that they invest in, and so, Aberdeen is certainly not [close to investors], and I think if we have any problems in Aberdeen, it’s sometimes that people think about it as an oil and gas city.

“And yet, it is Scotland’s centre of drug discovery. It’s not exclusively happening here, it happens in other parts of Scotland as well, but 70 per cent of Scotland’s late-stage assets are now in Aberdeen.”

Things are “changing slowly” now, he says, with Opportunity North East “making a big difference up here” and a new state-of-the-art biotech hub to open in 2021.

The UK Government has a target of 2.4 per cent of GDP being invested in research by 2027, but currently, it’s 1.63 per cent in Scotland.

To get to that target, Widdowfield says that it’s important that Scotland can access any new research funding, but also, that if funding is allocated in England in a way that has Barnett consequentials, that the money that comes to Scotland is actually invested in research.

Widdowfield also notes that it is important that Scotland’s voice is heard in UK Research and Innovation (UKRI), which was launched in April 2018 and brings together the seven research councils, Innovate UK and Research England.

Where public research funding is involved, she is also keen to highlight the importance of not just investing in applied research.

“I think the other thing about research funding is that support for fundamental as well as applied research.

“Because … if you think back to somebody like James Clerk Maxwell, there’s underpinning research that then allows for those innovations of the future that allow us to do things that might not have been anticipated at the time.”

As an example, she mentions the use of laser for the treatment of short-sightedness, which “was never obviously planned for, but there are benefits from some of that more foundational research that are much wider than might have been initially envisaged”.

But while there are opportunities, of course, there are also challenges, one of them being Brexit. A fifth of all academic staff and over a quarter of research-only staff in Scottish universities are EU citizens, while 9.6 per cent of research funding comes from the EU.

Recent research from the Royal Society in London, looking at the UK as a whole, found that there are now 35 per cent fewer researchers coming to the UK through key EU schemes, while research funding had also dropped by half a billion euros since 2015 and there has been a 40 per cent drop in UK applications to Horizon 2020, the EU’s research and innovation programme for 2014 to 2020.

But how is the impact being felt in Scotland?

“Obviously, there is a lot of uncertainty around Brexit at the moment and some of it will depend, for example, on the UK Government’s immigration policy and how it chooses to develop that,” says Widdowfield.

“So, I would hope that we are able to continue to attract the best talent wherever it is around the world. I mean, that’s really, really important for the research base, that continued access to global talent.”

“Brexit’s not really impacted on us yet in the way that I thought it might,” says Porter.

“So, when I look around the lab, we have a very international lab, and we’re still recruiting, and we’re still recruiting from within Europe and further afield.

“What we have noticed is a tightening on things like immigration rules. And so those members of the team that are not actually from inside Europe, but from further afield, then getting extensions on visas, getting visas in the first place, the hoops that we’re having to jump through, that has been more complicated and there are these kind of strange anomalies that sometimes happen that we’ve had to kind of battle with sometimes to make sure that key members of our team are able to work here in the UK.”

However, Porter adds that “doesn’t mean that Brexit hasn’t had an impact”.

There has been a “huge impact” on raising money for commercial development, with businesses having to start seeking investment earlier because the pipeline is taking a lot longer, which also has an effect on how much they can raise, since they may not have hit all the key development milestones in the research at the point they start to raise investment and so the asset value is lower.

A lot of companies and CEOs are “pulling their hair out trying to close deals” in such an uncertain world “with the spectre of indyref2 as the next great uncertainty hanging over lots of tech businesses up here that are looking for venture capital,” says Porter.

It is not a political point, he says, but an issue with the uncertainty that is created.

He explains: “If it was a 90/10 split that we will be becoming an independent Scotland, then that would be fine because people could start to plan and prepare what that might mean.

“The problem is it sits around 48/52 all the time in either direction and that uncertainty just kills everything. So people just sit on their hands until they get some clarity of what’s going to happen.”

The future of research funding from Europe depends on the final deal that’s reached with the EU and the RSE has been arguing for direct participation in Horizon Europe, which is Horizon 2020’s successor.

EU framework programmes have been “hugely important” for strengthening the research base, says Widdowfield, and Scotland gets more per head than England, Wales and Northern Ireland from Horizon funding.

The UK Government has said there will be a continued association, but it is still uncertain what that association will look like.

She says: “There’s a lot of unknowns and uncertainty at the moment, I think, in terms of what the UK future research relationship looks like, which obviously is all part of the bigger picture in terms of what the overall deal looks like.

“But … as a society, we’ve been arguing that whatever the nature of the agreement, that the UK should have the closest possible research relationship with the EU.”

And it is not just a question of the funding, but also of collaboration, one of Scotland’s current strengths, that may be lost.

Widdowfield says: “The point that we’ve been trying to make is funding is very, very important, but it’s also the added value and the non-economic benefits that come from that collaboration.

“So … the UK Government has guaranteed a sort of underwriting, certainly current research grants, but into the future, even if the same amount of money was put into research, if it doesn’t allow that sort of multi-country collaboration, I’m not saying it wouldn’t be welcome, of course, it would be welcome, but I think we’d still be losing something by not being part of a collaboration like Horizon Europe.”