Comment: How innovation centres shaped Scotland’s tech sector

Ian Reid, outgoing chief executive of innovation centre Censis, reflects on five years of change, innovation and collaboration in Scotland’s technology community.

SMEs now dominate the Scottish technology landscape. says Reid. Picture: McAteer Photograph

A lot has changed in the last five years in Scotland. Although I’d worked north of the Border before during the Silicon Glen era, when I returned to become the chief executive of Censis in 2014 it was a very different place.

Gone were the many large businesses that characterised my previous stint – the technology and business landscape was, and still is, dominated by SMEs (small and medium-sized enterprises). What hadn’t changed were many of the economic challenges Scotland faced. Encouragingly, these seemed better understood than in other parts of the UK. The public sector was playing a proactive role and had carefully considered how it might positively and productively address these obstacles.

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That process led to an active innovation agenda and the creation of the Innovation Centre programme: eight organisations established between 2013 and 2014 focused on aligning the research produced by universities with industry challenges for economic and wider societal benefits. However, bringing the academic and business worlds together was a well-travelled road – was this yet another attempt?

I was pleasantly surprised to discover this was a new take on the old concept. The programme would be industry-led, work across the research base, and, perhaps most importantly, it would look at wider problems rather than exclusively company-specific issues. Relationships with other actors in the innovation space were actively encouraged and the innovation centres had very clear economic targets. Mechanisms were in place to ensure that they did not displace existing industrial activity and they were designed specifically for the Scottish landscape.

The second surprise was the attitude of the Scottish business community. Far from incredulous at the prospect of some new gizmos, companies were excited to try new technologies and ideas – a fact now reflected in the buy-in the innovation centres have from large swathes of Scotland’s SMEs and corporates. The universities, which make the research strength of Scotland so enviable, also recognised that these centres brought something beyond their traditional knowledge exchange activities.

The fundamentals were there for something exciting; but, of course, there are always barriers – not least making everyone aware that these organisations existed. Then there’s the constantly-evolving capabilities, use and adoption of technology. So, for example, while Censis’s initial remit was sensor and imaging systems, that quickly expanded into the Internet of Things (IoT), a ready-made model for connecting these up and a key component to the digitalisation of industrial activities.

The landscape has changed in other ways, too. Earlier waves of technology-inspired innovation came with a certain fear factor for some of the established players. It was the preserve of those who developed it, sometimes disparagingly referred to as “geeks”. Few cared much about markets, economic fundamentals, and the minutiae of business. This did lead to the growth of tech giants – the so-called “FAANGs” – and radically new business models such as Airbnb and Uber. But, for every success story, another thousand ideas ended up in the bin.

The new IoT technologies are far more user friendly, allowing traditional businesses to experiment and adopt them in the development of new products and services: this potentially puts the power back in the hands of those with the market knowledge and established customer relationships. But, to make this work, we need to help companies with identified market needs access the technologies that can make their ideas a reality, helping them mature and de-risk solutions, bridging the so-called “valley of death”.

This is what innovation centres do. The hundreds of R&D projects they have brokered with academic and public assistance over the past few years are testament to that. Nevertheless, there is a recognition that more should be done to help bring technologies developed in Scotland to market.

While many organisations are singing from the same hymn sheet and there are good levels of funding, the innovation ecosystem can be tricky to navigate – especially for SMEs. One area of focus should be to make the end-to-end innovation journey as easy as possible for industry, with each innovation actor fitting into its respective niche and a joined-up approach to help smooth the way through the various handover points.

Scotland has huge potential as a hotbed of technological development. But, if I’ve learned anything over these past five years, it’s that encouraging businesses to adopt new technology isn’t just about describing it – they need to see it, understand it and experiment with it in a safe environment. Scotland is in the vanguard of such activities and it has been a privilege to be part of it in however small a way.