Innovation is the key to a fairer economy, writes Andy Kerr
Another election! And one that has seen voters swamped by competing economic claims from political parties. Unfortunately, this has shed more heat than light on the issues facing our country. Claims and counterclaims about the Government debt and the deficit. And which party will cost “hard working families” more. But the main UK political leaders remain united in asserting that the UK is one of the world’s richest economies.
What is less comfortable for all UK political leaders is that the UK barely makes the top ten of wealth creating nations in Europe as measured by wealth creation per person.
Yet, creating the conditions for more wealth creation, and ensuring a fairer distribution, will achieve far more for the UK economy than any political pronouncement on the deficit.
To achieve this in Scotland, we need to develop a more entrepreneurial mindset and help it thrive. We need to generate wealth by exporting products and services around the world. And we need to encourage the skills training and learning that will help a much wider range of people – and enterprises - in society.
How can we help Scottish enterprises to thrive? A stable political environment with clarity about the future taxation regime is usually high up the list. But public funding is also crucial.
In circumstances where markets are changing rapidly or new ideas and technologies are emerging, public funding can help support enterprises to translate new ideas into products and services and take advantage of emerging markets.
One such area is the low carbon – sometimes called “clean-tech” or “green-tech” – market. It is one of the few economic sectors to see sustained growth in recent years.
There are huge – and largely untapped – potential markets overseas: the biggest investors in renewable technologies in recent years have been China and the USA. And Scotland is blessed with some outstanding Universities with leading expertise in low carbon ideas and technologies, along with ambitious small and medium-sized enterprises.
For example, a cornerstone project of the ECCI at the University of Edinburgh, since its inception in 2011, has been the award-winning Low Carbon Innovation programme.
This project, which matched public funding with private finance, has enabled ECCI to engage with over 1,000 Scottish enterprises and support over 160 businesses to develop more than 100 new low carbon products and services.
These include products and services such as biofuels from waste; transport services, software and management systems to help manage energy in buildings; renewable heat, electric and fuel cell technologies; and food and drink systems.
This approach reflects the understanding that building clusters of expertise – with close collaboration between Universities, the public sector and enterprises – is key to creating the skills and learning in Scotland to support wealth creation. It allows Universities and Colleges to work with enterprises and help match expertise to new ideas, to new people, to new markets and to new finance. Crucially, it focuses on the knowledge and skills of the people involved in enterprises.
This approach is also at the heart of the emerging Innovation Centres, business-led initiatives hosted by Scottish Universities. The successful experience of the Low Carbon Innovation programme has also led ECCI to expand abroad. New offices in Hong Kong are planned later this year, aiming to support Scottish enterprises with low carbon products and services to access the huge Chinese market.
The measurable success of these initiatives points to how Scotland can take a huge step forward in building a wealthier and fairer society. They build on existing expertise within the economy. And, most importantly, they focus public funding on improving the skills, knowledge and learning of people in Scottish enterprises that create wealth in Scotland.
So, at this forthcoming UK election, pay less attention to claims and counter-claims about deficit reduction. Instead, consider which party has the most effective policies to create a supportive environment for the skills and learning needed for wealth creation by Scottish enterprises. Because the political party that gets that right will be best placed to deliver the vibrant economy that we all seek.
• Andy Kerr is executive director, Edinburgh Centre for Carbon Innovation