How to turn Scotland into a world-leading digital nation

MAY'S Scottish Parliament elections will cast a spotlight on Holyrood like never before. With a fresh fiscal settlement coming on the back of the Smith Commission's report and further tax-raising powers being handed to ministers north of the Border, the next Scottish Government will have more levers to pull than any of its predecessors.

Scotland is en route to become a leading digital nation. Picture: TSPL

No matter which party or parties form the next administration at Holyrood, Scotland’s digital future will be high up on the political agenda.

Near the top of the in-tray for the next First Minister will be a report compiled by accountancy firm Deloitte and commissioned by the Scottish Futures Trust (SFT) entitled The economic and social impacts of enhanced digitisation in Scotland.

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The SFT was setup in 2008 by the-then First Minister, Alex Salmond, to come up with an alternative to public private partnerships (PPP) and private finance initiatives (PFI) for public sector infrastructure projects.

Scotland's digital future is high up the political agenda. Picture: PA

The trust’s remit to deliver value for money on infrastructure investment now extends into the digital sphere, recognising the growing calls from business organisations for broadband to be treated as the “fourth utility” and highlighting the role that connectivity – whether it’s through super-fast broadband connections or fourth- (4G) or fifth-generation (5G) mobile phone signals – can play in improving both Scotland’s economic and social performance.

£30bn boost to GDP

Published in December 2015, the report will make for interesting reading for the incoming First Minister and their Cabinet. 
The document paints three scenarios for Scotland’s digital future, highlighting what would happen if the nation follows an “incremental” path, a “world-class” route or a “world-leading” trajectory.

Under the world-leading scenario, gross domestic product (GDP) could be boosted by £13 billion a year by 2030, creating 175,000 jobs in the process.

Scotland's digital future is high up the political agenda. Picture: PA

The world-class scenario would boost GDP by £9.5bn and create 120,000 jobs, while the incremental scenario would raise output by £4bn and produce around 40,000 posts.

With “productivity” one of the buzzwords on the lips of both the UK and Scottish governments, such digital enhancements create a mouth-watering opportunity for ministers, while the report’s authors suggest the world-class scenario could increase the employment rate by up to 6 per cent; an attractive proposition when the unemployment level for 18-24 year olds stood at nearly 18 per cent in 2014.

Boosting connectivity and then exploiting those superfast connections would also bring social benefits too: using telemedicine to diagnose patients more quickly and monitor their long-term health conditions could save more than 4,500 lives by 2030; promoting the use of information and communication technology (ICT) could help bridge the attainment gap between children being educated in rich and poor areas; and increasing digital availability could help ease social deprivation, allowing unemployed people to search for jobs online and access public services.

Creating a ‘digital nation’

Harnessing the opportunities presented by the report will require political consensus and the 15-year timescale laid-out by its authors extends well beyond the lifetime of any single sitting of the Scottish Parliament.

“The next Scottish Government and incoming Scottish Parliament need to find ways of embedding digital outcomes across all the policy planning frameworks needed for the next 15 years,” explains Steven Grier, Country Manager for Scotland at Microsoft.

“We need a commitment to creating a truly great Digital Nation that would be binding for successive governments in the same way as those for big public infrastructure projects, like the Queensferry Crossing that’s being built across the Firth of Forth.

“Digital spending is now being seen as part of the infrastructure of a nation because of the economic and social benefits that it can bring.”

Grier points to the successes already achieved by the Digital Scotland Superfast Broadband Programme, a £410 million scheme that brings together the Scottish and UK governments, the European Union and local councils to connect 95 per cent of the nation by 2016 for the Highlands and islands and 2018 for the rest of Scotland.

Foundations in the cloud

Ways in which digital outcomes can be embedded and subsequently measured across all Government policies is part of the Microsoft Digital Blueprint, the company’s manifesto to raise the level of debate among prospective Members of the Scottish Parliament (MSPs), businesses and citizens in the run-up to the vote on 5 May.

“Going into the Holyrood elections, there needs to be a debate about what it would take to make Scotland a truly great digital nation and what policy framework would need to be developed to achieve that aim, building on what’s gone before,” Grier adds. 
“We could consider a specific digital remit for the Council of Economic Advisers for example or how we strengthen accountability for Digital Scotland via the Scotland Performs scorecard.

“The size of the prize in terms of GDP is huge… £13bn by 2030– that won’t just benefit the national economy but will also trickle down to individual businesses and households, creating more high value jobs and bringing more income into households”

“It’s not just big companies that will benefit either because boosting connectivity could also create nearly 6,000 small and medium-sized enterprises (SMEs) and small office and home office (Soho) businesses.

“Cloud computing can enable all of this to happen – the big technology players are making the investments that will allow companies, schools and the health service to collect and analyse all the vast amounts of data needed to fuel a digital nation and so government doesn’t have to worry about the capital costs but instead can concentrate on how this capacity can be used.”

‘Revolution’ for e-government

Microsoft isn’t the only voice calling for action on connectivity, with a Digital Services Bill also forming a key strand of the Federation of Small Businesses’ (FSB’s) manifesto.

FSB Scotland wants the Bill to “revolutionise” the relationship between government and business, with measures including all businesses having access to broadband at speeds of at least 10 megabits per second (Mbps) by 2018-19 and all business support websites – such as Business Gateway, Scottish Enterprise and Skills Development Scotland – being rolled into the portal.

“Broadband providers need to give details of minimum speeds rather than estimated maximum speeds,” says Stuart Mackinnon, senior public affairs adviser at FSB Scotland.

“We wouldn’t accept that sort of service from other business – if you paid £2.80 for ‘up to one pint of lager’ but then ended up with only half a pint then you wouldn’t be very happy.”

Procurement of public services is one of the topics high-up on the agenda for Polly Purvis, chief executive at digital technology trade body ScotlandIS, who wants to see the process made easier for her members to bid for government supply contracts.

“I don’t think procurement just affects small companies,” she says. “I think large companies would also tell you that the cost of procurement is still too high.

“That’s an area within the government’s gift – to make sure the procurement process is as good as it possibly can be and make it as easy as feasible for small companies to work with that process.”

Scale-up funding

While Scotland has made substantial progress in finding start-up funding for businesses – thanks in large part to the nation’s business angel networks and the Scottish Investment Bank’s co-investment funds – the lack of “scale-up” finance is now working its way up the political agenda, joining “productivity” among the buzzwords for ministers.

“This is not about asking government to throw money at this – it’s about asking government to help create the environment that will encourage venture capital funds to come to Scotland and generate the debate around how we all work together,” explains Purvis, pointing out that the lack of scale-up funding is simply a new name for the venture capital gap that has plagued Scotland’s ICT sector for decades.

“We have billions of pounds of insurance and pension money managed from Edinburgh, yet none of that seems to come into the tech sector, so is there a way of getting some of that money invested in the local economy? I’m sure there are some smart things that could be done there and again it’s down to governments to be the facilitators.”

- This article was produced in partnership with Microsoft