This is how independence can boost our innovation nation status

The growth in some of these Scottish sectors has been astonishing. Life sciences, for example, has seen a 24% growth in size. The software sector expanded by 72% in eight years, with projected growth of 17% creating 63,000 new jobs before 2025. The number of gaming companies in Scotland soared by 1800% between 2008 and 2019. One of the world’s top selling game series is made in Scotland. Grand Theft Auto is the fifth most successful games franchise of all time with 220 million sales and counting.

The fact Scotland, and Glasgow in particular, are leading the way in satellite technology across Europe is something that often surprises people. With 70 satellites a year built in Glasgow, it’s no surprise that Scotland will also be the location of the first spaceport in the UK. Where else could you find enough room and the ideal conditions to launch so many satellites?

All this demonstrates that Scotland’s entrepreneurial base is innovative and ready to play a leading role in emerging new industrial sectors. This gift for innovation has a central role to play in driving Scotland’s economy to future success. But as impressive as our performance has been, we can still do far better. The UK is consistently outperformed by independent nations with similarly-sized populations to Scotland when it comes to spending money on research and development (R&D). Norway, Belgium and the Netherlands devote significantly bigger budgets to the sector, as do larger nations such as Germany and France.

The faster-growing, more prosperous, smaller European nations spend an average of more than 3% of GDP on R&D, yet the UK spends only 1.68%. A report by Nesta, a UK innovation foundation, claimed that if Scotland could build towards an R&D spend of 3.4% of GDP over five years, that would allow its economy to grow by around £12 billion annually. However this report was not heeded and Scotland is missing an opportunity to create high-value employment as the Scottish Government does not posses all the policy tools required to place innovation at the top of the industrial agenda.

Small and medium-sized enterprises (SMEs) are a large part of Scotland’s economy. A Scottish government report in 2019 calculated that they account for 99% of all private-sector businesses and more than half of all private-sector employment in Scotland.

SMEs employ more people for less turnover. This creates more jobs here than in nations dominated by large corporations. One of the best opportunities for rapid growth and increased productivity in the Scottish economy would be to rapidly increase R&D commercialisation, as well as innovation and productivity investment in SMEs.

The nature of innovation is changing. We often think of it in terms of those eureka moments when a real breakthrough is discovered or a startling new idea shocks and captivates the world. And mind-blowing discoveries do indeed take place. One of the biggest in recent years was the discovery of the Higgs boson particle in Geneva in 2012, and there was a Scottish connection here, too. It was named after Edinburgh physicist Peter Higgs, who predicted its discovery in 1964.

However, the more mundane truth is such moments are rare. Real economic growth comes from what is known as close to market, applied or downstream innovation.

The latter is all about adding value to products, understanding customer needs, analysing niches, proof of concept and testing prototypes. The need for businesses of all sizes to connect to and partner with universities conducting relevant research is key. The fact we have four universities in the top 200 in the world for research – more than any other nation on a per-head basis (that has more than one university) – is a real advantage. Scotland needs to invest in the changing face of innovation and promote those changes so our economy can grow in added-value sectors and create more highly skilled, highly paid, better quality jobs. But the fact is this is another area in which our position within the Union holds Scotland back. The UK’s poor performance in R&D spending in comparison to European countries makes it clear that its innovation policy is lacking in ambition and that this negatively impacts on Scotland.

The Scottish Government doesn’t have the powers to change corporation tax, for instance, or offer credits to encourage innovation. Neither does it have any control over the nation’s defence budget – most of which is spent outside Scotland and therefore does not directly benefit our economy.

We also currently lack the powers to create research connections and the investment culture that could take our success to the next level. The key innovative sectors currently have to rely on EU skilled labour and access to the single market, so Westminster’s disastrous Brexit deal is a real threat. The end of freedom of movement means those highly skilled EU nationals we so desperately need will not be able to come. Those industries will stall, the new investment will dry up.

The attitude to innovation displayed by the UK Government is another threat to our potential to grow success in this area. Mariana Mazzucato, an economist described as one of the most influential in the world, has criticised Boris Johnson for “taking the wrong economic lessons”from the Covid crisis.

Mazzucato said that while the Prime Minister attributed the development of vaccines to a private sector driven to achieve greatness by greed, the reality is “an unprecedented amount of public funding has been poured into vaccine research, development and manufacturing”.

Mazzucato, who advised First Minister Nicola Sturgeon on the development of the Scottish National Investment Bank, is keen to give proper credit to government investments of public money into, for example, health innovation rather than a private-sector motivated by greed. In a recent interview she said: “History tells us innovation is an outcome of a massive collective effort – not just from a narrow group of young white men in California. And if we want to solve the world’s biggest problems, we better understand that.”

Taking this advice and investing public money in innovation and cutting-edge industries will be a key plank of the economic strategy of an independent Scotland. We will create bespoke innovation policies for Scotland, rather than a one-size-fits-all policy that caters only for London and the south-east’s finance and service industry-dominated needs.

An independent Scotland would take control of the powers needed to turbocharge innovation and serve as a key to building a better future for this country and those who live here. Let’s make things again in an independent Scotland, in fact let’s make clever innovative things that demand high prices and create higher paid jobs and sell them to the world.