National innovation strategy 2023 to 2033

4. Introduction

Our vision is for Scotland to be one of the most innovative small nations in the world. This is our ten-year strategy to deliver that ambition.

That ambition will bring Scotland in line with European countries of a similar size such as Denmark, Norway and Finland. Realising that ambition will mean that we have developed and scaled Scotland's innovation ecosystem to become a core driver of the national economy.

It will mean that we have a national network of innovative clusters where Scottish businesses are working at the cutting edge of technology and engaging in international partnerships and opportunities in areas where we have a clear competitive advantage. It will mean that we have an investment landscape, balanced and co-ordinated in line with our priorities, that delivers value and impact and re-invests in the ecosystem.

It will mean that our universities are nurtured and supported and that we are becoming a leader in the commercialisation of research, generating valuable spin-outs and student start-ups. Our businesses across the country will be supported to become active in innovation and we will have national programmes of incentives, infrastructure, training and engagement to help businesses and citizens become innovative and innovators. And we will have a public sector that takes an 'innovate first' approach and supports the development of a world-leading innovation ecosystem.

We define innovation as 'the introduction and implementation of a new or significantly improved product, service, process, or method with the purpose of helping to solve societal challenges or delivering economic growth.'^[7] Innovation is about new ideas, technologies and research being utilised, adopted and commercialised to benefit society and the economy. Innovation is closely linked to entrepreneurship and they are mutually dependent and supportive. Entrepreneurship is defined as the creation or extraction of economic or social value often using resources beyond those controlled. It is the process of creating and developing a new business to generate profit while taking on financial risk. It is about a building a national culture and mindset that will create the conditions for starting and scaling businesses.

The twin engines of an innovation and entrepreneurial ecosystem are its innovation capacity and its entrepreneurship capacity. It requires engagement from five key stakeholder communities – the public sector (including governments both national and local, agencies, and public bodies such as the NHS and Police Scotland), industry (of all sizes and sectors), academia (universities, colleges and research institutions), the entrepreneurial community (who will create the enterprises of tomorrow) and the investors and providers of risk capital (who will assess and fund new ventures).

Innovation can therefore be seen as the vehicle to deliver entrepreneurship and a thriving innovation ecosystem is fuelled by an entrepreneurial mindset. The development

of the innovation ecosystem is closely aligned to our ambitions for becoming a more entrepreneurial 'start-up' nation. The outcomes of a strong innovation ecosystem will be a pipeline of scaleable spin-outs and start-ups delivering new jobs, opportunities and investments around the country. This critical mass of activity will enable Scotland to become a world-leading innovation nation.

This Strategy builds on a range of successful activities, strategies and programmes being delivered across the nation. It connects and aligns with the National Strategy for Economic Transformation and in particular its programmes for Entrepreneurship and New Markets.

NSET's Entrepreneurship programme aims to establish Scotland as a world-class entrepreneurial nation with a much stronger pipeline of scaling businesses, and founded on a culture that encourages, promotes and celebrates entrepreneurial activity in every sector of our economy. NSET's New Markets programme aims to strengthen Scotland's position in new markets and industries, generating new well-paid jobs from a just transition to net zero. This Strategy links across these programmes and will help deliver those ambitions.

We want Scotland to be more innovative because innovation is a tool not just for achieving economic growth but also for reducing inequalities, improving societal outcomes, and achieving our net zero ambitions.

By improving our innovation performance we will support the creation of new companies, new technologies, and new products; we will bring in investment and drive collaborative relationships with international partners; we will support existing businesses to utilise and adopt innovation to grow and scale; and we will create a national network of clusters in areas where Scotland can lead the world. These initiatives will unlock investment and create jobs and opportunities across the country.

All of Scotland, our businesses, our entrepreneurs, our communities, will have a part to play in our journey to becoming a world leading innovation nation and the benefits of that journey will be felt in every village, town and city through high value jobs and economic growth powering better services and increasing the nation's wellbeing and health.

This places innovation at the heart of Scotland's wellbeing economy.

As we deliver this Strategy and its transformational programmes we will do in line with broader ambitions to transform our country's economic model so that we build an economy that celebrates success in terms of economic growth, environmental sustainability, quality of life and equality of opportunity and reward.

This Strategy focuses on the areas which will make the biggest impact, taking action in five interlinked key areas.

1. We will identify and promote the innovative technologies and sectors in which Scotland has clear potential to lead the world. We will take a cluster building approach to supporting these areas to become world-leading and internationally facing – driving mutual benefits from international partnerships.

2. We will adopt an investor mindset to supporting our most innovative businesses – investing where we have a competitive advantage, providing a comprehensive

and co-ordinated package of support and leveraging in venture capital.

3. We will transform our commercialisation landscape, strengthening the role that our research base plays in driving economic and societal prosperity.

4. We will rapidly increase the rate and scale at which innovations are adopted in Scotland – by businesses, by communities, and by the public sector.

5. We will measure and monitor the performance of our innovation ecosystem and benchmark this against other nations in an annual Innovation Scorecard.

The Strategy has been informed by an extensive, inclusive and collaborative approach which has utilised the diversity of Scotland's innovation ecosystem. We have engaged across the country with a series of roundtables and workshops for business, universities, colleges, investors, and the wider public sector. We have engaged with a range of independent industry experts and commissioned research from SCDI to develop the set of actions which form the Strategy.

The Strategy is evidence-led, making best use of all available data to clearly identify where we should focus our efforts to build a technologically enabled, net zero wellbeing economy, with the principles of fair work and sustainability, inclusive growth and Community Wealth Building at its heart.

It has been informed by a public consultation and is supported by an accompanying Evidence Paper which has been undertaken by Scottish Government economists and analysts in close collaboration with independent experts.

The Strategy sets out, across each of its five themes, a vision of what we want to achieve, the opportunity for transformation, the current landscape including the barriers we are seeking to overcome, and the actions we will take to address those barriers, engage with those opportunities and achieve the vision we're aiming for.

Case Study – Edinburgh BioQuarter

In the Little France area of Edinburgh is Edinburgh BioQuarter, an innovative place where improved healthcare treatments and patient care are developed and taken to the world.

Edinburgh BioQuarter is where industry meets first-rate academics, clinical practitioners and medical innovators: an innovative place that is attracting businesses, investors and tenants. Partners include Scottish Enterprise, the University of Edinburgh, NHS Lothian and the City of Edinburgh Council.

The 'BioQuarter Vision' is to unlock BioQuarter's full innovation potential, accelerate its growth and for it to become a global destination for pioneering health innovation and enterprise. Over the next decade BioQuarter will transition into Edinburgh's Health Innovation District - a new mixed-use urban neighbourhood of Edinburgh, centred around a world-leading community of health innovators and companies.

Building on the £600 million capital invested to date and the City Region investment, through a new strategic joint venture partnership, new commercial health innovation accommodation will be developed alongside residential, retail and leisure amenities and high-quality public realm. By creating a thriving place, we can attract, nurture and retain high-growth companies, establish a community of health innovators and make a positive impact to our local communities.

A Health Innovation District is forming with the Royal Infirmary, a new Children's Hospital, the University of Edinburgh Medical School, an Institute for Regeneration and Repair and the Usher Institute for Data-Driven Health Innovation sitting alongside the Cell and Gene Therapy Catapult and commercial research space at BioCubes and at Building Nine.

BioQuarter is an innovative place:

• where more than 7,500 healthcare and life sciences experts are working towards improved patient care, new treatments and therapies.
• that connects academics, scientists, clinicians, healthcare professionals and entrepreneurs.
• for tenant companies, spin-outs and start-ups, giving them the potential to grow, to forge international partnerships and to take advantage of co-locating alongside world-leading expertise across the BioQuarter campus.
• that is strengthening its connection to the local community.

The ambition for the future is for a further £1 billion of private sector investment to establish the BioQuarter as a world-leading Health Innovation District. A new vibrant mixed-use district supporting a community of more than 20,000 people. BioQuarter will be a place for people to innovate, live, study and thrive.