Enterprise and Skills Review: report on Phase 2

3. Project Outcomes and Progress

The following sections of this document summarise the aims and outcomes of the Enterprise and Skills Review workstreams.

Data, Performance and Evaluation

Vision

To have a more effective and transparent system of measurement for the Scottish economy and the operation of the enterprise and skills agencies. The analysis will be of the highest quality and publicly available.

Objectives

• To support the Strategic Board in decision making and assessment of the performance of each agency.
• To improve the quality of the data and evidence available for the agencies and local and central government as well as the Strategic Board. This should include use and sharing of administrative data.
• To consider the evidence on current skills gaps and the extent to which our investments in learning and skills are working to close those.

Outcomes

• Commitment to establish a new analytical unit to provide support to the Strategic Board, agencies and wider stakeholders.
• We will appoint a head to lead the unit. They will provide a single point of contact for the Strategic Board and provide leadership and direction for the unit.
• A set of agreed principles for the analytical unit and its interaction with the Strategic Board including a commitment to openness and transparency in consulting widely on the work plan of the unit and publishing the results of its activities to ensure there is a shared evidence base for wider stakeholders.
• Appointments to the unit will be made by the Scottish Government in the first instance and will be jointly funded by the Scottish Government and agencies.
• The unit head will work with the appropriate senior analytical leads of the agencies to help coordinate analysis across the enterprise and skills system.
• The unit should improve the use and sharing of administrative data across the enterprise and skills system as a particular focus of its work.

Benefits

The analytical unit will support the new strategic board in identifying the best way to drive the enterprise and skills system to achieve its aims.

This will be achieved through better collaboration on intelligence across the enterprise and skills agencies, helping to identify the most effective interventions to support productivity improvements - including improving the evidence base on return on investment.

The analytical unit will help to develop a more effective set of performance measures and a set of shared outcomes which will focus the enterprise and skills agencies on the areas which will have the biggest impact for productivity, wellbeing and equality.

The analytical function will aim to provide evidence to the wider enterprise and skills system, beyond the agencies, helping to focus the actions of other public bodies and private institutions on delivering productivity growth.

Regional Partnerships

Vision

We want a Scotland with successful regional partnerships that stimulate local economies and build inclusive growth. Regional Partnerships, led by local authorities, draw together private, public and third sector interests and build on the experience, governance and learning from City Deals.

Regional Partnerships are self-assembled around the bespoke requirements of an area. They build inclusive growth through a clear understanding of the future of the regional economy, the key challenges, constraints and opportunities.

Objectives

• Ensure all of Scotland thrives and opportunities to improve the regional economy to secure inclusive growth are identified and delivered.
• Strengthen national agency and private sector engagement with regional partnerships.
• Ensure that increasing inclusive growth is at the heart of regional partnerships.

Outcomes

• We will work with our partners in local government and more broadly to develop plans for every community to be represented by a regional partnership focused on their area, driven by local partners. This will build on the experience of existing successful regional partnership structures which demonstrate strong leadership; common strategy; understanding of assets; inclusion of public, private and third sectors; and clear purpose.
• Our agencies will build on their experience of fostering regional working and will support regional partnerships by: ensuring regional equity is taken into account in project appraisals and business planning; tailoring products to regional conditions; developing a regional asset register to inform priorities; engaging effectively to deliver agreed priorities; and facilitating private sector engagement through regional economic forums.
• Future city deals and other types of regional growth deal proposals are expected to prioritise and evidence their impact on driving inclusive growth in order to ensure that all regions and communities can prosper and fully contribute to Scotland's overall economic growth.
• We will expect private sector representation on regional partnerships where government investment is sought. Ensuring that active and engaged private sector partners help lead, shape and deliver the priorities of any existing or future Partnership is and will continue to be key to their success.
• Learning from the on-going Ayrshire pathfinder demonstrates that the move to build stronger regional economies has evolved beyond city deals. Working closely together and with full input from the agencies the three Ayrshire local authorities are engaging the Scottish Government as they develop proposals for an Ayrshire Growth deal. The pathfinder is considering what is best delivered at local, regional and national levels to unlock the area's full economic potential.
• Sharing success is key and we will build inclusive networks enabling representatives from each regional partnership to come together regularly from autumn 2017 to discuss challenges, share experiences and learn from each other. Representatives from regional partnerships will be invited to the National Economic Forum.

Benefits

Regional partnerships can stimulate local economies and support national growth by:

• Identifying synergies and common priorities across the region for co-ordinated and focused action designed to deliver growth.
• Strengthening connections between schools, colleges, businesses and the enterprise and skills development system.
• Increasing the potential to maximise economic benefit from all regional assets and developing clusters of strength.
• De-cluttering the landscape for service users, improving integration and awareness of the full suite of support available, including private and third sector provision.
• Helping align activity such as strategic planning of development and infrastructure planning.
• Embracing private sector leadership, expertise and networks to amplify growth opportunities and co-design the support necessary to unlock the full potential of an area, its businesses and people.

South of Scotland Enterprise Agency

Vision

Our vision is for a new South of Scotland enterprise agency that will drive inclusive growth, increase competitiveness and tackle inequality within the region and compared to Scotland as a whole.

Objectives

• The South of Scotland enterprise agency will maximise the area's contribution to Scotland's inclusive growth, supporting a diverse and resilient economy.
• The enterprise agency will sustain and grow communities - building and strengthening communities with joined up economic and community support.
• The enterprise agency will capitalise on people and resources - developing skills, promoting assets and resources and maximising the impact of investment in the area.

Outcomes

The project explored the most appropriate geographic boundary in which the new organisation should operate, with the consensus emerging that its operational boundaries should be the local authority areas of the Scottish Borders and Dumfries and Galloway.

This reflects the economic context and the similarity of challenges faced in those two areas ensuring clarity for those using services and a focus on tackling the specific challenges of the area. The area is predominantly rural, with a range of associated challenges including:

• An ageing population with an out-migration of young people and difficulty in ensuring attractive opportunities for them to return to.
• Challenging physical and digital connectivity.
• A number of fragile towns across the area.
• Sectors with traditionally low wages and with fewer higher skilled jobs.
• A business base dominated by micro and small businesses with a lower number of businesses being started, with less investment in innovation and research and development.

The project focused on the functions of the organisation, but also explored what legal form would deliver those functions most effectively. We believe that the option that best meets the needs of the South of Scotland is that the new organisation should be set up as a new public body. We will introduce legislation in 2018 to bring info effect the new agency so that it is fully operational from the beginning of the 2020 financial year.

In the meantime, we want to ensure that people in the South benefit as soon as possible from a new and more tailored approach to supporting inclusive growth. Therefore, in advance of the statutory body, we will work with South of Scotland stakeholders and through the emerging Strategic Board to put in place an interim approach (including a lead individual) ready to implement in the autumn so the area starts to benefit from a new and more tailored approach.

We also recognise that workstreams looking at governance, data, business support, innovation, internationalisation, skills alignment and the learner journey will also benefit the South of Scotland and need to respond to the area's needs. The new agency, once established, will be part of the national governance arrangements and represented on the new strategic board to ensure that the area's interests are recognised and addressed.

Benefits

The new agency will bring a fresh approach, with a clear and unambiguous focus on Dumfries and Galloway and the Scottish Borders, enabling a response informed by the economic context of the area and enabling a step-change in regional economic performance.

Enterprise and Business Support

Vision

Enterprise and business support will be focussed on the user, with simple and quick access to the right support for businesses throughout their growth journey, backed by a more joined-up approach by delivery partners. Support will be designed around, and able to adapt and grow with, businesses' changing needs. There will be a strong focus on driving business ambition and internationalisation; enhancing innovation; better organisational performance, leadership and management skills; and progressive workplace practices, including fair work.

Objectives

• To significantly improve the planning and delivery of information, advice and assistance to businesses right across Scotland, from start-ups to high growth and international firms, as well as community and social enterprises.
• To increase the scale and pace of company growth by helping companies improve their productivity, skills and competitiveness.
• To take early action on specific enterprise issues, especially support for businesses with potential to realise significant growth through 'scale' and realising the economic potential of women-led enterprises.

Outcomes

The Enterprise and Business Support project has focussed on improving the planning and delivery of business support by driving deeper collaboration between partners, simplifying the access route for business, and making more effective use of digital information and delivery methods. It will also take action in specific areas where there are untapped opportunities for growth. As a result of Phase 2 of the Review, across the public sector, and working with the Strategic Board, we will:

• Starting this summer, deliver a joint improvement programme across the agencies to create a much more coherent and joined up system of support that is quick and easy to access and understand and is focussed on business need.
• Jointly engage with the business community and individual businesses to seek feedback and drive improvement.
• Undertake specific research, reporting in early 2018, on the behaviour and motivation of businesses so that we can reach more businesses more effectively and better target future interventions.
• Provide a single digital access point for business support and develop and deliver a single, authenticated business I.D so that we can work more effectively across partners to meet the needs of businesses 'in the round' and so that businesses are no longer required to keep providing the same information to different partners.
• Provide more and better co-ordinated support for businesses to 'scale up' by driving forward the Scotland CAN DO Scale movement through Entrepreneurial Scotland and partners across the system - with the new steering group in place from summer 2017.
• Realise untapped economic potential by tackling the gender gap across start-ups and growth companies - including through this summer's refreshed Women in Enterprise Action Framework and action to deliver a sustainable model that collaboratively develops and monitors future gender-aware and gender-specific policies and interventions.

Benefits

• A streamlined and more joined-up approach that will make business support easier and quicker to access, more effective for business, and more impactful.
• Improved support across the overall business base and especially in areas such as 'scale' and women-led enterprises.

Innovation

Vision

Our vision is for Scotland to be a place where innovation is an intrinsic part of our culture, our society and our economy; where businesses across the country are ambitious and open to collaborations and partnerships with one another, with colleges and universities, and with other organisations within and beyond Scotland; where businesses are open to new ways of working and improving their work practices; and where innovation and growth are stronger as a result.

Building on our world-class research and the existing routes to innovation and commercialisation in universities and colleges and supported by our enterprise agencies, we will take action to spread innovation more widely across the business base. We will build on recent improvements in our innovation performance and reduce the gap in Gross Expenditure on Research and Development ( GERD) between Scotland and the EU, with a specific focus on improving our Business Enterprise Research and Development ( BERD) performance year on year.

Objectives

To increase the contribution that innovation makes to productivity and sustainable economic growth by:

• Simplifying the innovation landscape and better aligning policy and support for innovation to maximise its impact and effectiveness.
• Ensuring that businesses can access the right range and mix of innovation advice and products to meet their needs.
• Increasing awareness of sources of innovation support and of the benefits that innovation can provide for businesses across Scotland.

Outcomes

Streamlining the Innovation System

Together, Scotland's enterprise and skills agencies will support companies through all stages of the business lifecycle so they can access the right innovation support at the right times from the right providers as they grow and develop. That support will be focussed on the business user, as we address perceived clutter by re-designing public sector support around the customer's journey.

Principles

Building on existing provision, and in line with work undertaken for general business support, business users will experience a simpler customer journey that includes:

• A single, easy-to-access, digital entry point: based on customer need not product.
• A single application: fewer and ultimately only one request for the same basic information to cover multiple applications.
• Blended engagement based on business needs: A mix of face-to-face and digitally-enabled access to information, advice and support through engagement range of channels - including self-service, one-to-many, targeted intensive and expert support.
• Simple Language: a simpler common language and a consistent approach from the public sector that fully makes best use of digital support.
• First and Lead contacts: contact from the most appropriate first partner will be made within a specified time. This will be followed up with an early, assessment of needs to ensure support is tailored and provided by the right partner. For businesses with significant growth potential, a key contact within the most appropriate agency will be allocated backed by a more rounded team approach that strengthens that individual company's development and growth ambition

On the back of Phase 1 of the Review we have already published an Innovation Action Plan. This Plan focusses on three themes:

• Ambition - Creating a Scotland where businesses across the country are ambitious and open to collaborations and partnerships with one another, with academia and with other organisations, and have high levels of innovation and growth as a result.
• Culture - Establishing a culture of innovation across Scotland that embeds innovation into everything from policy making to business development.
• Connections - Joining up our systems and our expertise, and looking outward to establish links with the right partners across the world.

These themes are supported by four key priorities:

Priority 1: Directly encouraging more business innovation.

Priority 2: Using public sector needs and spend to catalyse innovation.

Priority 3: Supporting innovation across sectors and places.

Priority 4: Making best use of university and college research, knowledge and talent to drive growth and equip Scotland's people with the tools and skills needed to innovate.

Building on the Action Plan

During Phase 2 of the Enterprise and Skills Review, we undertook a review of the innovation ecosystem. What came across clearly in the evidence gathered was that streamlining access to and delivery of innovation support is necessary but not sufficient to accelerate improvements in Scotland's innovation performance to the desired extent.

For innovation to make the impact on the economy that we need, we must develop a collaborative mission that increases the numbers of businesses innovating, increases their investment in innovation, and crucially, focuses on commercialising the results. Our evidence gathering also showed support for streamlining the innovation support system in a way that builds on the strengths of existing approaches. Actions to simplify the innovation system must, and will be, delivered in partnership with the business support workstream.

In support of the innovation action plan priorities, we will also undertake the following additional activity, delivery of which will be overseen by the Scotland CAN DO Innovation Forum:

1. Directly encourage more business innovation by:

• Reinvest savings arising from the review of innovation products in further work to widen innovation across the business base.
• Benchmark Scottish business Innovation Performance.
• Undertake additional research on the interplay between management skills and innovation demand in Scottish businesses, including the specific challenges and needs of family businesses.
• Continue significant existing and planned activity in finance for innovation including delivery of the Scottish Growth Scheme to support businesses in accessing the finance and investment they need to help realise their growth ambitions.
• Ask the Fair Work Convention to identify how our agencies can further embed workplace innovation through enhancing support for adviser training and focusing on demonstrating the productivity benefits of workplace innovation.
• Task the analytical unit with exploring how innovative finance, including peer to peer lending, could be utilised by Government and agencies to efficiently increase investment in R&D, innovation, uptake of existing technology and management practices.

2. Use public sector needs and spend to catalyse innovation by:

• Double funding for CivTech to £1.2m to scale up their activity to address public sector needs with business led innovation.
• Accelerate and deepen collaboration between the NHS, academia and business to position Scotland as an international leader in data driven innovation in health and life sciences.

3. Support innovation across sectors and places by:

• Develop more collaborative supply chain innovation opportunities.
• Maximise the role of Industry Leadership Groups to stimulate innovation.
• Develop a more strategic and coordinated approach to national innovation infrastructure investment.
• Deliver preparatory work on the National Manufacturing Institute of Scotland.
• Work with the strategic board to look at the spatial distribution of innovative companies across Scotland and how this impacts on local economic development.

4. Make best use of university and college research, and knowledge talent by:

• Pilot a £500k College Innovation Fund to support Scotland's colleges to work with businesses on innovation activity.
• Improve Scotland's Innovation Centres engagement with businesses and drive increasing levels of collaboration between business and universities and colleges. We will do this through working with the SFC and our enterprise agencies.
• Develop a sustainable funding model for the Innovation Centre Programme, working in partnership with SFC and the enterprise agencies.

Benefits

• A simplified, streamlined innovation support system, focussed on the needs of the user.
• A shared mission across partners to increase innovation in businesses across Scotland, including greater investment in R&D and knowledge exchange.
• Improved awareness of sources of innovation support and the benefits it can provide for businesses across Scotland.
• Increased and more effective collaboration between business and our universities, colleges and Innovation Centres.
• A commitment to use the needs and spend of the public sector to stimulate business innovation.

International

Vision

We want an enterprise and skills system that works as one both in Scotland and internationally, that inspires, enables and supports Scotland's businesses to trade internationally, and that engages individuals, businesses and institutions to invest in Scotland. One system that promotes a global mind-set, raises international ambition, and works with and for the private, academic and public sectors to maximise the impact of individual action and of Scotland's collective endeavour.

Objectives

• Through the Strategic Board, to deliver a stronger focus on coordination of international activity across the public, private and academic sectors.
• To maximise the benefit from Scotland's wide range of international assets and strengths, including the SDI network.
• To capitalise on the expertise and reach of VisitScotland, Connected Scotland and GlobalScots as well as Scotland's universities.

Outcomes

In conjunction with the Enterprise and Business Support project, five key areas for specific action were identified for examination in Phase 2 of the Review:

Export Support - We will:

• Deliver a partnership approach with Scotland's Universities and Colleges on internationalisation, building on the experience and success of Connected Scotland. Development and implementation of approach to begin immediately.
• Complete the mapping work already underway (by September 2017) and build on it to give clarity to agencies, Local Government and end users on the range of services available.
• Develop a written high-level commitment across agencies, government and local government to work in partnership to ensure that there is a clear pipeline of support available for companies at all stages of exporting.
• Re-develop SDI's web presence within Scotland, ensuring that it best presents key information tailored to the needs of users, particularly exporters and investors and aligned with other business support providers.
• Work with SDI, HIE, SLAED, Business Gateway, local Chambers, industry associations and others, to develop and deliver a co-ordinated programme of local trade events across Scotland by end 2017 (and on-going delivery thereafter).
• Provide clarity and consistency in export support across Scotland using the principle of a single entry point, behind which all business advisory services are accessible.
• Following the local/regional export partnership pilots, consider the potential for local export support mechanisms to be rolled out nationally to allow for equitable support across Scotland, particularly for SMEs, who are often not eligible for assistance from SDI.

Country Perspectives - We will:

• Develop a clearer shared understanding of priority countries, recognising that these may be different for trade, investment and Scotland's other interests - by end 2017.
• Where there are shared priorities, work with agencies, universities, colleges, GlobalScots and other organisations to coordinate planning and develop collaborative projects.
• Keep the Scottish Government and SDI's network of international offices under review to ensure the effective use of resources and take into account the experience of new Innovation & Investment Hubs in Dublin, London, Brussels and Berlin.
• Develop a coordinated approach to the promotion of Scotland's trade & investment interests at selected major international events.
• Develop a mechanism for better sharing intelligence from representatives of agencies and partner organisations based overseas with the broader business community in Scotland - by end 2017.

Branding - We will:

• The principal investors in International Marketing activity have joined forces under 'Project Unlimited' to deliver a campaign vehicle for Scotland that will align messaging, creative treatment and the technical deployment of messaging with very clear commercial outcomes. Phase 1 of this project will be delivered in September 2017, and will include a proposed business case for investment in activity that will encourage target audiences in key markets to visit, work, study, live and invest in Scotland.

Overseas and Inward Trade Delegations - We will:

• Look for opportunities to pool resources and work jointly when SDI, Universities, Colleges, Chambers and Government are developing overseas trade missions. To assist with this approach establish a Scotland wide calendar detailing proposed overseas trade missions. This should result in improved co-ordination between partners and in some circumstances reduce the cost to the public purse - by end 2017.
• Develop a single, co-ordinated Scotland wide calendar to allow us to share details of proposed inward visiting delegations - by end 2017.
• Establish a system to assess the relative importance of visiting delegations and help ensure that appropriate resource is deployed - by end 2017.

Inward Investment - We will:

• Build on good examples of joined up working to develop a protocol committing all Scottish partners to work together to maximise the benefit for Scotland from potential inward investors - by October 2017.
• Establish a steering group to assist SDI engagement with the range of relevant public sector bodies that can support Foreign Direct Investment, including universities, structured around the elements of the Trade & Investment Strategy.
• Working with SFC and SDS, and in line with the Skills Alignment element of the Enterprise & Skills Review, we will develop a focus on skills to meet the needs of inward investors.
• Through the steering group examine ways to better utilise the international reach of universities, academics and alumni - by October 2017.

Benefits

• Improved co-ordination of the efforts of all the enterprise and skills bodies on supporting businesses internationally.
• Improved economic performance by increasing Scotland's overseas footprint by enterprise and skills organisations.
• Greater degree of exposure of Scottish organisations to international competition and larger international markets through exports and trade.

Skills Alignment

Vision

Our vision is a high performing and responsive skills system which meets the changing needs of learners and employers. In turn this will contribute to higher levels of productivity and equitable access to rewarding employment.

Objective

To align the relevant functions of Scottish Funding Council ( SFC) and Skills Development Scotland ( SDS) to ensure that our agencies are able to equip Scotland's people and businesses with the right skills and experience to succeed in the economy, not just now but in the future.

Outcomes

The Scottish Government, working closely with SDS and SFC, have identified the following key elements of an aligned skills system:

• A single set of strategic skills guidance from Government to the Boards of both agencies which supports the delivery of the Strategic Board's Strategic Plan.
• A Skills Committee of the Strategic Board which informs joint delivery by both agencies and provides a joint decision making forum.
• A joint team led by a single director reporting to the Chief Executives of both agencies.
• A jointly delivered skills planning and provision model which:
  • identifies skills needs in partnership with industry, other agencies, local government and the Analytical Unit;
  • works with colleges, universities and training providers to respond to skills needs;
  • co-ordinates investment;
  • monitors and manages performance; and
  • Reviews and evaluates impact in partnership with the Analytical Unit.

Benefits

As a result of this greater alignment:

• Learners will be able to access provision which enables them to develop the skills required to contribute to a highly productive workforce.
• Employers will experience reductions in skills gaps and improvements in the skills of their workforce.
• Through collaboration, the capacity of colleges, universities and training providers will be developed and deployed to maximum effect.
• Duplication in public funding will be addressed, leading to more efficient investment in human capital through our education and skills system, and the up-skilling and reskilling of existing workers.

Learner Journey

Vision

We want our learning and skills system to make the most effective contribution to productivity and inclusive growth and provide a post 15 learning experience which meets the needs and aspirations of all young people, equipping them with skills for learning, life and work.

With the learner at the centre, the Scottish Government's vision is for a learning and skills system which enables efficient and effective learning journeys through:

• Informed decision making by the learner.
• High quality learning opportunities.
• Straightforward, seamless efficient connections between different parts of the system, including using existing qualifications and experiences to move more quickly through the system.
• Equality of access to these opportunities, including suitable learner funding.

Objectives

To develop policy proposals on improving the 15-24 Learner Journey, the Scottish Government is taking forward a review, building on the core values and approaches set out in Get It Right For Every Child ( GIRFEC), Curriculum for Excellence (CfE) and Developing the Young Workforce. The aim is to enhance the learning and skills system and:

• Put the learner at the centre - delivering the full range of opportunities learners need at the right level and the right quality.
• Prioritise equity of access, so that non-traditional and part-time journeys are supported and joined up: It is important - not least to provide for the stepping stones for those that need them - that the journeys remain flexible to best support learner needs and preferences. We need also to give learners the time they need as part of a commitment to life-long learning and future up-skilling and re-skilling.
• Ensure a straightforward and connected system designed for the learner and flexible for change - learners should easily be able to identify the best journey for them and avoid unnecessary duplication of effort and cost.

Outcomes

The 15-24 Learner Journey Review, whilst being integral to the broader aims of the Enterprise and Skills Review and closely connected to its other work-streams, will deliver a programme of activity extending well beyond the close of the of the Enterprise and Skills Review.

It is currently in Stage 1, in which we are gathering the evidence and engaging stakeholders including young people, reporting in autumn 2017. During Phase 2 of the E&S Review, the 15-24 Learner Journey Review programme governance has been put in place, there has been extensive engagement with stakeholders at national and regional level and there has been a focus on gathering the views of young people. Key areas of focus have been agreed with stakeholders, and the review is being taken forward through five projects:

• Improving information, advice and application processes - This will include an options appraisal of a learner choices and applications service which brings together student support information and the careers, advice and information system on My World of Work with UCAS, Apprenticeship online and a new college application process.
• Improving understanding and connectivity of the careers service in colleges and universities - This will include a review of current careers advice and guidance services for learners in college and university.
• Improving the ease and equity with which young people can apply to college - Recognising the work already being taken forward as part of the Commission for Widening Access, this will focus specifically on evaluating the benefits and costs of a common application process for colleges.
• Improving the design, alignment and coherence of the 15-24 learning journey and the ease with which all young people move through their learning, regardless of where they are studying - This will include evaluating the opportunities and learner journey choices in and across schools, colleges and community/third sector based learning. Identify and consider any unnecessary duplication of learning. We will establish options for removing unnecessary repetition and maximising progression through levels of study in or between school, community, college, training and university.
• Improving the system and removing unnecessary duplication - We will develop a system wide analysis of unit cost and rate of return across school, community, college, training (including employability programmes), and university. We will use this to inform options for the future balance and method of investment. We will consider the future strategic direction of the learning system in Scotland

Benefits

• Improved ease with which all young people can move through their learning, regardless of where they are studying.
• Improved design, alignment and coherence of the 15-24 learning journey.
• Improved ease and equity with which young people can apply to college.