Innovation is one of four priorities in the Scottish Government’s 2015 – 2018 Economic Strategy, and is considered vital for the development of a competitive, sustainable, resilient and prosperous economy. Innovation is a vital component in improving productivity in any economy and as Paul Krugman said “Productivity isn’t everything, but in the long run it is almost everything.”

Fostering cultures of innovation is the current SUII programme theme.

The EU’s Innovation Scorecard classifies Scotland as an ‘Innovation Follower’ (see map). But within the overall assessment there is a much more varied picture. The biggest contrast is perhaps between the level of business and public sector R&D, with the latter being well above the EU average.

Over the past year innovation has been a key area of focus for EDAS’ Route Map of Common Ambition policy framework (alongside internationalisation and skills). Next Monday (21 March 2016) EDAS will be holding an ‘Innovation in Action’ event at SUII to discuss the work of its innovation group and learn from a number innovation case studies.

Headlines from the deliberations of the EDAS innovation group include the following:

• There have been recent signs of improvement in Scotland’s business innovation, but there is still a long way to go to match leaders – performance is mixed between and within sectors – some of it is world class
• Sources and methods of successful innovation vary a lot and traditional measures don’t always capture the full picture
• Process, organisation and service innovation alongside product innovation have an important role to play in improving productivity and developing new markets – alongside this innovation in public and 3rd sectors can significantly boost productivity and improve services
• Access to finance on the right terms, workforce skills, workplace culture etc. remain constraints on innovation – particularly for SMEs
• Significant externalities (e.g. returns on R&D investment) mean the public sector has a key role to play
• Scotland’s university research base is comparatively strong and provides a solid foundation for promoting innovation
• Careful consideration required of how best to handle the intellectual property generated by publicly funded research to optimise returns to society as a whole
• A broad underlying culture of innovation alongside specific initiatives is needed to realise potential and ease constraints – returning diaspora and new citizens with different (sometimes international) perspectives can help stimulate a culture of innovation
• Systemic approaches are needed in developing the complex eco-systems where innovation thrives – cause and effect are often difficult to disentangle in these systems
• Close collaboration across organisations at local and national level is critical – successful collaboration requires a good understanding of the different needs and interests of partners

Charlie Woods, Director SUII