Higher education research in an independent Scotland

4. A SUPPORTIVE ENVIRONMENT FOR RESEARCH

Independence offers wider opportunities and benefits - with independence we will be able to create an environment that better supports a vibrant and flourishing research base

91. While we will look to build on what works, we will also harness the clear opportunities independence brings for Scotland and our research base. In particular, independence will give future Scottish Governments additional financial levers which could be used to support and encourage innovation and research investment . For example, there would be the potential to use either direct financing levers (such as the provision of loans and guarantees; the use of competitive grants; and innovation vouchers) or indirect levers (normally tax based incentives) to incentivise research investment.

92. Indirect financing levers normally provide tax incentives aimed at encouraging innovation activities and can be applied to either expenditure (related to R&D) or income (from the benefits of R&D). Potential levers include R&D tax credits; tax allowances; payroll tax reductions for workers involved in R&D; and preferential tax rates on income accruing from investment in knowledge and innovation. Such incentives can be targeted at specific types of firms - where there was deemed to be particular barriers to investing in R&D - such as SMEs.

93. Independence would also enable Scotland to ensure that we have an intellectual property and patent system that best supports Scotland's needs and the stimulation and financing of research and innovation ^[38] .

94. Smaller economies have tremendous potential to operate as international test beds for new technologies. Science and research are closely linked to innovation and it is the ability to translate the scientific excellence, which Scotland can clearly demonstrate, into innovation and new technologies which will support the development of Scotland as an independent country.

95. The Global Innovation Index (GII) 2013, published by Cornell University, INSEAD and the World Intellectual Property Organisation (WIPO) looked at 142 economies around the world, using 84 indicators including the quality of top universities, availability of microfinance and venture capital deals - gauging both capability of innovation and measurable results. The GII 2013 ranked the UK at number 3 (see Table 3 below) but it is interesting to note that many small European countries (including countries of a similar size to Scotland such as Sweden, Finland and Ireland) were also in the top ten, demonstrating the innovation potential that can be harnessed by smaller economies.

96. Scotland's universities can already point to successful innovative activity and translation of research into economic success (see Chapter 1). With independence future Scottish Governments would have much greater opportunities to further strengthen the relationships and linkages between key partners in innovation - including businesses, universities, funding providers, and public sector agencies - and establish a coherent framework for supporting innovation in Scotland with co-ordinated use of the full range of economic levers.

Table 3: Global Innovation Index (GII) 2013

97. Independence will also give Scotland a clear platform to engage in international arenas and a greater opportunity to influence research agendas as a sovereign state. This would be particularly the case within Europe where independence would give us a far more stable basis to engage in European activity. This Government is committed to our relationship with Europe and strengthening Scotland's voice in Europe will ensure that Scottish interests are fully represented at the European level, while making clear to the rest of Europe the wealth of experience and resources Scotland has to offer as a nation. As a full member state, Scotland would have a stronger voice being able to take our own seat at the table to ensure Scottish representation in European research policy and funding forums and removing uncertainties around continued UK membership and commitment to the European Union.

98. Independence would also enable us to have a controlled, transparent and efficient immigration policy that meets the needs of Scottish society . Scottish universities are highly attractive to overseas students with Scotland welcoming over 45,000 students from overseas each year including 28,300 international students from outwith the EU. These students make a huge contribution to Scotland. In 2012/13 Scottish institutions received an income of £374 million ^[40] from non- EU course fees alone as well as benefitting from the wider contribution that international students make to Scotland's economy and society.

99. However, failures in UK immigration policies, including changes to the student visa rules, are putting that at risk and are widely recognised as damaging to the university sector preventing and deterring international students from some parts of the world from coming to Scotland and creating barriers to the in-movement and interchange of world-class researchers and students. For example, the number of students from India in Scottish higher education institutes has almost halved - from 3,290 in 2010/11 to 1,665 in 2012/13 while the number of students from Pakistan decreased by 39% (from 860 to 525) ^[41] .

"It is deeply worrying to see such steep declines in students from India, Nigeria and Pakistan studying in Scotland. These are important markets for Scottish higher education and countries with which we have long-standing academic relationships…It is telling that such a fall occurred only months after the UKBA announced the end to its post-study work route for international students." Alastair Sim, Director of Universities Scotland, The Scotsman, 12 February 2013

100. In evidence to the Education Committee on 2 October 2012, the Scottish Council for Development and Industry ( SCDI) warned that their "biggest source of concern" for research in Scotland was Westminster's tightening of student visas noting that that student visas "is a huge challenge to universities socially and financially and to Scotland economically".

"The UK's visa regime is now significantly more restrictive than that applied by a range of competitor nations who are vigorously seeking to attract talented learners from around the world. This places the UK, including Scotland, at a competitive disadvantage." Universities Scotland, Universities in a dynamic constitutional environment, November 2012.

101. With independence, this Government plans to reintroduce the post-study work visa which will encourage more talented people from around the world to further their education in Scotland, providing income for Scotland's education institutions and contributing to the local economy and community diversity ^[42] . We will actively promote a welcome for international students in the markets where we continue to be successful, such as China, and the markets like India, Pakistan and Africa where UK policies are having a detrimental impact. This strategy will also apply to the recruitment of overseas academics.