There are two RDA's in Scotland , Scottish Enterprise and Highlands and Islands Enterprise. In addition, these Agencies themselves have a network of Local Enterprise Companies which show considerable diversity in operation. The Boards of Scottish Enterprise and Highlands and Islands Enterprise then have an over-arching role in bring issues together at the higher level. One other important difference between England and Scotland currently is that Scotland has a single Department and Minister responsible for both Higher Education and Enterprise , giving greater opportunities for strategy convergence.

Regional Development Agencies, however, are not the natural bedfellows of the Higher Education and Research Institutes and they need structures and incentives to work together. The recent white paper, on the Future of English Higher Education, placed an increased emphasis on mechanisms for encouraging such interactions. Some of these mechanisms already exist in Scotland , for example, through the Conditions of Grant imposed on Universities by the Scottish Higher Education Funding Council (SHEFC), but SHEFC and Scottish Enterprise have also been looking at further means of incentivising Knowledge Transfer processes, recently identified in the Joint SHEFC/Scottish Enterprise Task Group Report on Research and Knowledge Transfer. In addition, in 1996, the RSE developed, in partnership with Scottish Enterprise, a national strategy for commercialisation (the Technology Ventures Strategy), which aimed to encourage more of Scotland 's science and technology to be commercialised in Scotland .

An important area of consideration is the economic context in which the Regional Development Agencies and universities are operating. For example, despite the considerable emphasis placed on encouraging commercialisation of research-generated ideas, one of the major weaknesses of the Scottish economy in this respect is the absence of locally based businesses capable of developing such ideas. The current model is very much one of higher education institutions (HEIs) 'pushing' research findings out into the community rather than industry 'pulling' such ideas and actively developing them. Scotland does not lack 'institutional push'; it does, however, lack 'industry pull'. Of the top ten publicly quoted companies in Scotland , five are either banks or utilities and as a country, we have too few major directly research-dependent industries. Most Scottish companies are small to medium sized enterprises (SMEs), often in rather ‘traditional’ sectors. In many of these SMEs the barrier to knowledge uptake is that the companies are not able to analyse their business process in a way that allows them to envisage technological solutions. Moreover, there is a paucity of university staff with the knowledge, ability and time to undertake the kind of business or process analysis required to interact successfully with these companies.

There is, therefore, perhaps an insufficient recognition that in some regions the industrial base simply does not exist to exploit the scope for collaboration with academia. In some cases world class researchers cannot find any local businesses to work with and need to collaborate with industry outside their region or indeed outside the UK . This means that benefits flowing to the local area are indirect and therefore limited.

It is not easy to see how this can be addressed beyond encouraging such local collaboration as can take place, promoting academic spin-outs and attracting appropriate inward investment. In this context, the RSE in partnership with Scottish Enterprise has run a successful series of Enterprise Fellowships since 1997. These one-year Enterprise Fellowships have equipped former post-doctoral researchers, or younger lecturers, with the hands-on business knowledge to enhance the commercialisation potential of their own research. They encourage the establishment of new start-up companies and allow young entrepreneurs to devote time to develop their research into a commercial project. In Spring 2001, Scottish Enterprise commissioned SQW Ltd to carry out an independent review and evaluation of the 13 Enterprise Fellowships that had been completed at that point. Its report concluded that: “The Enterprise Fellowship programme is shaping up to be an excellent contributor to economic development in Scotland . It is enabling progress to be made in the commercialisation of university research and the establishment of technology-oriented new businesses.” The companies which these Enterprise Fellows have created to date include: Intense Photonics, Microemissive Displays, Surfactant Solutions, Edinburgh Biocomputing Solutions, Photonic Materials, Kymata and Intrallect. In recognition of this, Scottish Enterprise announced this year a major expansion in the number of Enterprise Fellowships to be run by the RSE, with funding of £5.5 million for a further 80 new Enterprise Fellowships in Scotland.

Other examples of valuable initiatives in this area, supported or encouraged by Scottish Enterprise, include the development of the Strathclyde/Glasgow E-Institute, the Edinburgh/ Stanford Alliance, The Scottish Institute for Enterprise , Connect, Scottish Enterprise's Proof of Concept Fund and the Intermediate Technology Institutes. Details of these can be found in Scottish Enterprise's 2002 Operating Plan (http://www.scottish-enterprise.com/publications/ operatingplan2002.pdf). Highland and Islands Enterprise have also instigated a competitive Research Challenge Fund to encourage technology transfer, details of which can be found at http://www.hie.co.uk/competition.html.

Additional Information

In responding to this consultation the Society would like to draw attention to the following Royal Society of Edinburgh responses which are of relevance to this subject: Commercialisation Enquiry: Final Report (1996); A Framework for Economic Development (March 2000); Research and the Knowledge Age (April 2000); A Science Strategy for Scotland (July 2000); The Are We Realising Our Potential Inquiry (July 2000; January 2001); Review of Research Policy and Funding (April 2001); Review of the supply of scientists and engineers (August 2001) Scottish Higher Education Review (January 2002); Scottish Higher Education Review: Second Consultation Paper (August 2002) and Research and Knowledge Transfer in Scotland (September 2002).

Professor Andrew Walker
Vice President
Royal Society of Edinburgh

March 2003