National innovation strategy: equality impact assessment

Equality Impact Assessment – Results

Title of Policy	Scotland's National Innovation Strategy
Summary of aims and desired outcomes of policy	The National Innovation Strategy sets out an aim for Scotland to become one of the most innovative small nations in the world within the next ten years, by utilising innovation to grow our economy, create jobs and deliver priority outcomes.
Directorate	Directorate for Economic Development

Executive Summary

The Public Sector Equality Duty requires the Scottish Government to pay due regard to the need to meet its obligations under the Equality Act 2010 by assessing the impact of applying a proposed new or revised policy or practice upon equality. Therefore, the Scottish Government undertook an Equality Impact Assessment (EQIA) as part of the process to develop the National Innovation Strategy.

An EQIA aims to consider how a policy may impact, either positively or negatively, on different sectors of the population in different ways. Equality legislation covers the protected characteristics of: age, disability, gender reassignment, sex, pregnancy and maternity, marriage and civil partnership, race, religion and belief, and sexual orientation.

Initial scoping found a lack of captured diversity and inclusion data on innovation activity, which has informed a commitment within the National Innovation Strategy to collate data where diversity and inclusion data is not captured or available, and to consider how this can be incorporated into future policy development.

Initial scoping also found that female entrepreneurs find it difficult to access and navigate innovation investment. The National Innovation Strategy will therefore ensure innovation funding support is visible and accessible for all of Scotland's innovative businesses, including those founded and led by women. The National Innovation Strategy's recommendations for an Innovation Investment Review will pay attention to the Stewart Review's commitments to improving proportionality of investment for female entrepreneurs and the need for inclusive investment models.

This Strategy also directly intersects with the work of the Stewart Review through its recommendations surrounding commercialisation and supporting growth in spinout activity. Activity on commercialisation and diversifying spinout activity will align and compliment those recommendations within the Stewart Review that aim to improve entrepreneurial access pathways for female entrepreneurs and the quality of start-up education for women.

As the innovation priority areas identified within the Strategy are emerging and high growth sectors that are increasingly prone to adopting new and innovative technologies, there is an opportunity to influence the diversification of the workforce at an early stage. It is anticipated that new jobs will be available as a result, which will need to be accessible for those across the range of protected characteristics, ensuring new jobs do not negatively impact these groups by creating barriers to employment and inclusion.

The Scottish Government will commit to a regular review of the EQIA in light of any new data and evidence that comes to light over the lifetime of the National Innovation Strategy.

Background

During the development of the National Innovation Strategy, the Scottish Government has engaged with a wide variety of stakeholders on the themes of inclusive innovation and promoting the positive impacts of innovative activity for all of Scotland's citizens.

A core consideration in development of the National Innovation Strategy was to ensure a wide engagement and consultation process, ensuring that a diverse range of opinions and insights were captured in a number of ways, including:

• A call for evidence exercise in June 2022, receiving over 60 responses from across industry, the public sector and academia which were analysed to consider specific suggestions and consideration related to equality and people with protected characteristics.
• Workshops and Roundtable Events, including:
  • A Rural Innovation Workshop, incorporating project leads from the OECD Rural Innovation Project (of which Scotland is a test site)
  • A stakeholder event co-delivered with the Royal Society of Edinburgh
  • A roundtable event for members of the investment community
  • An Infrastructure Workshop with key representatives from across Scotland's innovation infrastructure system
  • A Metrics Workshop run by Scottish Government economists, involving experts from higher education and innovation research organisations
  • Workshops held by workstream sponsors from the Innovation Strategy's Senior Steering Group, consisting of key stakeholders from industry, academia and the public sector
  • Three themed business roundtables focussing on early stage, established corporate and rural businesses, co-delivered with our Enterprise Agencies and with over 70 businesses represented
  • A roundtable event on Foreign Direct Investment into University Research and Development, involving Scottish Government and Innovate UK partners, academic experts from across the UK, the Scottish National Investment Bank, innovation experts and the Scottish Funding Council.
• Consultations with individual stakeholders, involving widespread engagement from across the country included with businesses from a range of different sectors and sizes, Industry Leadership Groups, our universities and colleges, our innovation centres, and our enterprise and skills agencies.
• Engagement with stakeholders who have expertise in social innovation and in widening access and co-developed innovation activity in Scotland.

Scope

Programmes within the National Innovation Strategy will be delivered via a phased approach over the next ten years, and this high-level EQIA for the overarching Strategy reflects our current position at the beginning of this process, and additional action we will take to:

• Regularly review the existing EQIA in light of any new data or evidence
• Undertake EQIAs at an appropriate point when a proposed new or revised policy occurs during the ten year lifecycle of this Strategy.

This EQIA has been informed by detailed analysis of existing evidence and data in order to draw out the potential impacts of the policy for the protected characteristics as set out in the Equality Act.

Key Findings

New evidence and data is continually being produced, and so this EQIA has been developed based on available evidence and data at this time.

Age

Data suggests that entrepreneurial activity is greatest among lower age groups, but the average age of spin out founders and SME employers is much higher. Working alongside Scottish Government teams implementing the Scottish Technology Ecosystem Review (STER) and NSET recommendations, the National Innovation Strategy will aim to stimulate an entrepreneurial mindset in Scotland across all ages and entrepreneurs from both business and academia.

Work is ongoing through the Fairer Scotland for Old People: A Framework for Action to increase digital inclusion of older people with the growing technology-based services sector. This is particularly significant for health and social care. "Globally, just over half (55%) of us believe that technological development has the capacity to improve age for a lot of people." An innovation priority area identified in the National Innovation Strategy is digital health, which will lead the way in improvements in digital health innovation that can impact all of Scotland's citizens.Innovation activity in this priority area may have a weighted positive effect on older people.

Prioritising collaboration and partnership through the National Innovation Strategy will enable skill sharing opportunities between different actors in the innovation ecosystem, with more experienced entrepreneurs and workers given more opportunities to share their skills and knowledge with young workers.

More analysis of the potential effect and success rate and economic value from entrepreneurial activity of younger people could be done in order to improve success rates across all age groups.

Disability

The National Innovation Strategy will be encouraging high sector growth in our innovation priority areas, creating high value and well-paid jobs. We must ensure that these jobs are accessible to those with disabilities in order to provide equity of opportunity for well-paid jobs for those with the right qualifications, and opportunities further down the skills pipelines to be able to gain the qualifications necessary to work in these sectors.

Stimulating the emergence of new technologies through heightened innovation activity provides an opportunity to remove many of the physical barriers to work that have been in place for past generations of disabled people, through the introduction of equipment and processes that are universally designed, tested and accessible for

all. The delivery phase of the Strategy in the recommendations relating to adoption and diffusion will ensure that mechanisms are put in place to ensure these new technologies are suitably accessible and beneficial for wide adoption and use.

Whilst the National Innovation Strategy promotes good relations among disabled and non-disabled people, it is recognised that disabled people who may be in lower skilled jobs may be disproportionately affected by any phasing out of these low skilled jobs due to the introduction of new technology and industries. However opportunities to close the existing disability pay gap can arise through the recruitment, or reskilling of people with protected characteristics to undertake new jobs, transformed jobs or substituted jobs in new and emerging industries.

Disability may create barriers to accessing appropriate training / support, affecting the diversity and accessibility of talent pipelines of emerging innovative sectors. Mitigating action will need to be undertaken in collaboration with skills and education policy areas to ensure that the training and support available for transition into appropriate roles in emerging highly innovative sectors is accessible for those with a disability.

Gender Reassignment

As recommended in the Trans People and Work Survey Report by LGBT Health and Wellbeing^[88], more can be done to promote positive visibility in new and emerging industries to attract diverse talent and promote inclusion. Work through the National Innovation Strategy's Productivity Programme will involve Skills Development Scotland (SDS) working with enterprise agencies and other partners to ensure we are investing in skills demanded by our prioritised sectors, exposing a more diverse range of talent to emerging opportunities where possible.

More information is required to determine how this group is impacted and how the National Innovation Strategy can be used to break down barriers to a career in emerging industries.

Sex

The Scottish Government has a priority to address women's labour market inequality and to close pay gaps, with Scotland's labour market strategy committing to "continuing to tackle inequalities around pay gaps and occupational segregation in the labour market."^[89]

Analysis undertaken for A Trading Nation, Scotland's Export Growth Plan found that "the priority sectors identified for specific focus in delivery [of the plan had] a lower proportion of female employees than Scotland overall (43.4% v 48.3%). These priority sectors include Engineering and Advanced Manufacturing and Energy (16.5% and 15.7% respectively),"^[90] which map onto the innovation priority areas outlined in the National Innovation Strategy.

Part of the National Innovation Strategy's Productivity Programme will involve Skills Development Scotland (SDS) working with enterprise agencies and other partners to ensure we are investing in skills demanded by our prioritised sectors, including a more equal gender balance of talent where possible.

The lower percentage of female founders, CEOs and Board members is highlighted in the National Innovation Strategy. It is worth noting that the percentage of female-led companies differs according to sector, with the Health Wellbeing and Social Care sector sitting at 39% compared to lower rates in Information, Communications and Technology (15%) and Financial Services (10%).^[91] The Scottish Government also has a commitment through the Scottish Technology Ecosystem Review (STER) and Stewart Review to facilitate an increase in support for female entrepreneurs, in both the tech sector specifically and the wider economy. Work to bring hidden female entrepreneurs to light as part of Scotland's innovation ecosystem will align with the work out lined in the Stewart Review on widening access to entrepreneurship for women and minorities, as well as the NSET work in creating new pathways into entrepreneurship through a variety of new means.

Working alongside Scottish Government teams implementing the Scottish Technology Ecosystem Review (STER), NSET and the Stewart Review, the National Innovation Strategy will aim to stimulate both an entrepreneurial and investor mindset in Scotland and improve access to innovation investment and support mechanisms for female entrepreneurs, addressing the particular barriers faced. For example, positive results are already being seen through the Stewart Review's Recommendation 11, where the Scottish National Investment Bank (SNIB) acts as a limited partner to 'cornerstone' a fund, fund managers should have at least 20% of their senior investment personnel being women, with proven results in diversifying investment recipients. We will work to evaluate the proportion of funding provided to female innovators and female-led businesses as part of our Innovation Funding Review, and seek to mitigate any imbalances.

Opportunities to close the existing gender pay gap can arise through the recruitment, or reskilling of people with protected characteristics to undertake new jobs, transformed jobs or substituted jobs in new and emerging industries.

Pregnancy and Maternity

More information is required to determine how this group is impacted and how the National Innovation Strategy can be used to break down barriers to a career in emerging industries.

Marriage and Civil Partnership

More information is required to determine how this group is impacted and how the National Innovation Strategy can be used to break down barriers to a career in emerging industries.

Race

Working alongside Scottish Government teams implementing the Scottish Technology Ecosystem Review (STER), NSET and the Stewart Review, the National Innovation Strategy will aim to stimulate both an entrepreneurial and investor mindset in Scotland and improve access to the innovation ecosystem and its support mechanisms for ethnic minority entrepreneurs, addressing the particular barriers faced.

Data points particularly to barriers to investment for ethnic minority founders at a UK level. The National Innovation Strategy's funding review will evaluate the balance of public sector innovation funding at a Scotland-wide level, and work on the commercialisation recommendations within the National Innovation Strategy will include how to further support an increase of ethnic minority spin out founders from Scotland's universities.

Opportunities to close the existing race pay gap can arise through the recruitment, or reskilling of people with protected characteristics to undertake new jobs, transformed jobs or substituted jobs in new and emerging industries.

Religion or Belief

More information is required to determine how this group is impacted and how the Innovation Strategy can be used to break down barriers to a career in emerging industries. However the National Innovation Strategy is anticipated to have a positive impact on people from all religious backgrounds as a result of the opportunities that will be provided by the increased opportunities for flexible working in new and emerging industries across the whole of Scotland.

Sexual Orientation

The National Innovation Strategy is anticipated to have a positive impact on this group as a result of the opportunities that will be provided by the increased opportunities for new, good, green, high value jobs in the innovation priority areas across the whole of Scotland. This will help advance equality of opportunity by providing the opportunity for this group to learn new skills, upskill or reskill, create more inclusive and diverse work places and provide more flexible working opportunities for people in this group through emerging industries' adoption of Fair Work practices.

As above, work through the National Innovation Strategy's Productivity Programme will involve Skills Development Scotland (SDS) working with enterprise agencies and other partners to ensure we are investing in skills demanded by our prioritised sectors, exposing a more diverse range of talent to emerging opportunities where possible.

Intersectionality

There is data to suggest that particular intersections between gender and multiple other protected characteristics give rise to additional barriers. Consideration of parttime or more informal working arrangements via tailored support for specific needs within new high-paid work opportunities presented through the National Innovation Strategy will help to mitigate marginalisation.

More data information is required on the multiple intersectional barriers to innovation activity, however through the various impacts on people with protected characteristics identified in this EQIA, it is anticipated that a number of barriers to working in new or emerging industries will be captured and mitigated.

Conclusion

The National Innovation Strategy provides an opportunity to become one of the most innovative small nations in the world, building expertise in a number of different economic areas by utilising the breadth and diversity of talent and expertise across Scotland. Growing and scaling our innovation priority areas to become world leading in an inclusive way will ensure that we harness Scotland's full potential and deliver positive impacts for all of Scotland's citizens.

A ten year Strategy provides the opportunity to scale the number of new high value jobs in a range of rapidly growing sectors, nurturing diverse pipelines of talent and providing careers for people across all of the protected characteristic groups for now and in future decades to come.

The findings of this EQIA will be used in wider policy making decisions to tackle and address inequalities and socio-economic issues. The National Innovation Strategy sets out an ambitious ten year programme, and it is not anticipated that changes to equalities outcomes as a result of related programmes of work will be immediate, but a gradual change over a number of years is more likely to be seen.

This EQIA did not identify any negative impacts on people with protected characteristics from implementation of this policy, and there are numerous areas within the National Innovation Strategy that will have a positive impact on people with protected characteristics or groups. These include:

• Taking a tailored approach to evaluating and addressing the unique barriers and opportunities within each of the innovation priority areas
• Reviewing innovation funding mechanisms and distribution and ensuring access is widened and receipt is more equally distributed between genders
• Targeted intervention to widen the opportunities for people from diverse and underrepresented backgrounds and communities to participate in commercialisation
• Stimulating an entrepreneurial mindset in Scotland
• Emphasising recognition of pioneers in underrepresented areas, including firms in sectors with proportionally lower levels of innovation overall and innovators from underrepresented groups.

This EQIA analysis will be kept under regular review and develop over the ten year lifecycle of the Strategy, seeking to incorporate additional data on equalities, diversity and inclusion as data becomes available.