Scotland CAN DO: becoming a world-leading entrepreneurial and innovative nation

Understanding our Challenges

Despite our strong track record of entrepreneurship and innovation, and many great entrepreneurial individuals and innovative companies, Scotland faces a number of challenges. Innovation in Scotland has been characterised as a conundrum - a high performing academic sector but lagging business innovation performance in relation to research and development.

During the past two years we have been developing our understanding of this. A review of Scotland's Innovation System undertaken by the Technopolis Group helped to crystallise the key strategic challenges requiring attention and to highlight where changes are required to improve economic growth. ^[20] This includes developing a multi-annual action plan for prioritising investments and ensuring university spin-off companies make more impact on the Scottish economy. There is also a need to increase the current low numbers of enterprises participating in research and development and innovation activity.

The Scottish team participating in the Regional Entrepreneurship Acceleration Programme ( REAP), ^[21] led by the Massachusetts Institute of Technology ( MIT), has been studying the interaction between innovative and entrepreneurial capacities in Scotland and globally. Well-functioning systems in the public and private sectors enable innovation-based businesses to grow in number and scale. These companies exploit knowledge to create employment, trade internationally and contribute more to Scotland's economy.

When compared to world leading innovation-based nations, Scotland fares well, but the following have been identified by the Scottish REAP team as areas where collective action across the private and public sectors would help businesses to grow and innovate:

• Effective connections between ambitious entrepreneurs, investors, leaders of Scotland's largest businesses, and policy makers.
• Skills for growth including sales, leadership and human resources.
• Increasing the role of universities in providing entrepreneurship education, sharing best practice, and advocacy.
• Promoting entrepreneurial role models from all parts of society.
• Securing appropriate finance to support business growth across all key sectors.

The REAP Scotland team will publish their detailed recommendations early in 2014.