A pipeline of skilled staff is vital for innovative firms and Scotland has an enviable record in this area, says David Lee
From the days when Clydeside rattled with the roar of shipbuilding, to steel manufacturing, engineering and medical breakthroughs, brewing, textiles, oil and agriculture, Scottish industry and skills have led the way.
Meeting the challenges that each industry brings, evolving to meet fresh demands and carving a successful reputation as a world leader – whether in distilling or banking, jute, journalism or Dolly the sheep – Scotland has consistently punched above its weight.
When an industry has significant growth ambitions, ensuring the future pipeline of skills is crucial. For life sciences in Scotland to grow into an £8 billion sector by 2025, more highly skilled people will be needed at all levels. So is the current pipeline fit for purpose?
Dave Tudor, co-chairman of the Life Sciences Scotland Industry Leadership Group (ILG), thinks we are well placed. “We have a strong mix of high-quality graduates and modern apprenticeships coming into the industry.
“The Skills Investment Plan in 2011-12 worked well and the ILG’s business environment group is involved in developing the revised plan.
“It’s about strategic workforce planning – there is always a demand for new skills, for example in sterile manufacturing environments – but I think the universities are responding well to industry needs,” he says.
Dame Anna Dominiczak, regius professor of medicine at Glasgow University, agrees: “I think we have fantastic graduates and should be very proud of what we produce.
“We have big classes graduating from our School of Life Sciences with very bright young people coming out every year.
“The same is happening at Edinburgh, Dundee, Aberdeen.
“We have to make sure they interact with industry and work with SMEs.
“We have a direct link between the Stratified Medicine Scotland Innovation Centre and a Masters programme, designed to prepare them to work in the industry of the future.
“It’s about the type of thinking they need to do and what’s coming next – including data analytics.
“We hear a lot about machine learning and AI (artificial intelligence). We need to provide experiences for our graduates that allow us to build an inter-disciplinary workforce for the future.”
However, Scott Johnstone, chief executive of trade body, the Scottish Lifesciences Association (SLA), thinks we are closing the gap in educational provision.
“There is a real thirst for talented graduates but they require technical regulatory skills to work in life sciences businesses.
“The businesses want them to be employment-ready in that respect, not to have to train them in those fundamental skills; that immediate graduate employability is key.”
Johnstone has seen progress working with universities to modify the curriculum and identifies real potential in Graduate Level Apprenticeships for life sciences, based on the direct application of academic learning to real-life situations.
He adds that the SLA’s special interest groups on higher and further education are looking specifically at ensuring there is more “shared best practice” between Scotland’s universities.
He feels the SLA has added value to the business environment for life sciences companies in Scotland.
“We have created a Scottish member-driven organisation, which is designed to make connections and drive better healthcare – and grow members’ businesses by doing that.
“Our special interest groups bring together great businesses to make connections, domestically and globally, and solve problems.”
Julia Brown, head of life sciences at Scottish Enterprise, says we also need to ensure school pupils understand more about what “life sciences” means, as well as the opportunities available.
“It’s the white lab coat and safety specs phenomenon. That image is ingrained although the industry isn’t like that any more.
“There is lots of work going on to encourage internships in life sciences businesses and there is more to do in schools to myth-bust and to make life sciences less intimidating.”
Hans Moller, director of Edinburgh BioQuarter, says hubs like it have a big part to play: “We have a role in making transformational medicine visible to the public by bringing people in to see what we do – schools and the local community – and getting them to hear stories from [for example] a researcher working on future stem cell treatments.
“That can be very interesting for young people and perhaps encourage them down the route of studying STEM (science, technology, engineering and mathematics) subjects.
“A lot of the work in life sciences is very niche and can be hard to explain; we need to translate it into something people can understand and relate to.”
So what do life sciences companies want from the business environment in Scotland?
“It is about making it tax-efficient for them to operate here and giving them access to high-quality staff,” says Johnstone.
“Tax, skills and patient capital are absolutely crucial. Businesses need investors who will share risks.”
He warns that any move to impose differential income tax rates by the Scottish Government would be a disincentive.
“The big lever is tax and there are concerns. You could argue that you could pay more because of the better quality of life in Scotland but if businesses are trying to recruit high-quality people from the rest of the UK or further afield, those potential recruits may be put off by higher income tax.
“There are attractions to businesses like R&D tax credits, Patent Box and so on, but there are no differentials across the UK for these.”
There is work to do in informing life sciences businesses about the tax opportunities, says Demetrios Kyriacou, a senior R&D consultant with tax specialist Leyton UK.
“Scottish businesses must be made more aware of the tax incentives available to them in the form of Patent Box and R&D tax relief.
“We have helped a number of companies to claim and they have received benefits, usually in the form of cash.
“This assists both cash flow and profitability for innovative businesses who are incurring high costs in the development phase, before a product/process is brought to market. Also companies are often unaware of the wide scope of the R&D criteria.”
Kyriacou adds: “The environment needs to remain stable following Brexit – we predict that R&D tax benefits will remain at the same level or increase in order to compensate for Britain’s exit from the single market.
“This is likely only to benefit companies that are already based in Scotland which are innovating.”
One important area of the business environment is ensuring capital is available for businesses looking to scale up.
The Life Sciences Scotland strategy says: “Scotland is only second to London in the UK for numbers of companies receiving venture finance.
“However, deal sizes are still smaller compared to competing regions in the UK.”
Brown thinks this is crucial to success: “We need sympathetic investors and patient capital. Investing and doing interesting things costs money and takes time.
“We have one of the most active angel investment groups for life sciences and start-up funding is less of a challenge – it’s growth money that’s needed, especially where companies are looking for more than £1-2 million and up to £10m.
“The Scottish Investment Bank has addressed some of these issues, while Scottish Enterprise helped to set up Epidarex to get a specific fund for Scottish life sciences operating – and to draw in other funds.”
Richard Gibbs, managing partner of patent attorney Marks & Clerk in Glasgow, agrees more must be done to help businesses looking to grow, especially when they need finance quickly. “Life sciences businesses can struggle after the initial rounds of funding,” he says.
“While advice and funding for a start-up life science business is often readily available, it can be very difficult to secure funding to take you from that initial ‘incubator’ phase to the next, higher level.”
Infrastructure is another key area for a growing sector.
Tudor identifies a specific issue with “clean rooms”, the sterile environments needed for life sciences manufacturing processes.
“When you are manufacturing with large molecules, you need a sterile environment akin to an operating theatre.
“Companies need that kind of facility to move to the next scale but we don’t have enough of that.
“It needs to be some form of public-private collaboration – and conversations are happening.” n
The strategy identifies the core aspects of the business environment that are critical to support the sector’s growth. They are:
Develop Scotland’s life sciences infrastructure plan
To support the continued growth of the sector, we will map out the key infrastructure developments required, seeking appropriate investment for our ambitious plans.
These could include scale-up facilities, clean rooms, digital infrastructure, start-up and follow-on space to support growth.
Maintain a world-class regulatory environment
We will continue to maintain our globally recognised regulatory standards to ensure Scottish products are of significant quality and continue to be globally competitive.
Support the delivery of the life sciences Skills Investment Plan
Our people are still our greatest asset and the Skills Investment Plan, developed in partnership with Skills Development Scotland, provides a framework to ensure continued supply of a highly skilled and educated workforce to meet the needs of the sector.
We will continue to support the implementation of the current plan and the development of future plans as required by our dynamic sector.
Improve access to funding and investment
Scotland is only second to London in the UK for numbers of companies receiving venture finance.
However, deal sizes are still smaller compared to competing regions in the UK.
We will support Scottish companies helping them to engage with international investors to generate larger deal opportunities.
Source: Life Sciences Strategy for Scotland 2025 Vision