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Meeting of the Parliament 11 September 2013

11 Sep 2013 · S4 · Meeting of the Parliament

Item of business

Enterprise Networks

Fraser, Murdo Con Mid Scotland and Fife Watch on SPTV

It was in 2007 that I previously held the economy and enterprise brief for my party, but it is almost as if nothing has changed in the interim. Here we are, back debating Scottish Enterprise again. I well remember all the debates that took place years ago in which Scottish Enterprise was regularly a kicking boy. I confess that I did my fair share of kicking in those days, and I was not alone in that. Front-bench spokesmen from the minister’s party, which was then in opposition, were more than happy to put the boot in regularly.

However, times have changed and the enterprise networks have changed with them. We now see much slimmed-down organisations that have smaller budgets, fewer responsibilities and a much more focused approach.

The debate is held in the week when a new study has come out about Scottish Enterprise’s account-management approach. The study is largely positive, although it highlighted concerns about the low level of churn in the account-management portfolio, a slow transition from the business gateway growth pipeline to account management and shortages of management and performance data for account-managed companies.

At this morning’s Economy, Energy and Tourism Committee meeting, we heard evidence from WeDO Scotland that there is a lack of information about who can apply to be part of Scottish Enterprise’s high-growth programme and that account managers with relevant experience and expertise need to be aligned with the high-growth companies that are accepted on to the programme. Companies to which account managers from relevant backgrounds are assigned have had positive experiences, but that has not always been the case. We also heard evidence about the disconnect between business gateway and the transition to account-managed programmes, which Jenny Marra picked up on, and about a general lack of knowledge of the help that is available to small and medium-sized enterprises.

There are improvements to make, but they should not detract from what is a positive story overall. There remains a deeper philosophical issue about picking winners, which I debated with the minister a few moments ago. I am sure that that debate will continue.

In her amendment, Jenny Marra makes the case for a full review of the enterprise agencies’ work. I listened with great interest to the case that she made, but I am not convinced at this stage that a review is the right thing to do. We had a major restructuring and upheaval in the enterprise networks not long ago. That has had time to bed down and, overall, the change has been positive. We should keep a close watching brief on that, but I am not sure whether a full review to dig that up and examine the roots is the right way to go at this stage.

My amendment raises a specific issue in connection with Scottish Enterprise—that of the intermediary technology institutes. Members with long memories will recall that, in 2002, the then Scottish Enterprise chief executive, Robert Crawford, set up the ITIs with the laudable aim of helping to commercialise research from Scottish universities. Three ITIs were established—in life sciences, energy and digital media—with offices in Dundee, Aberdeen and Glasgow respectively.

The then First Minister, Jack McConnell, was fulsome in his support of the new initiative. He said:

“Scotland’s Technology Institutes will have a crucial role in making the giant leap to more world-beating companies and high-quality jobs.”

It was not just members of the then Scottish Executive who were supportive. Alex Neil, the then convener of the Enterprise and Lifelong Learning Committee, said:

“they play a vital role in creating the industries of tomorrow”.

Sadly, the ITIs had a chequered history. In the first two years, there was a high level of turnover of senior managers, amid complaints that Scottish Enterprise was cutting back on its initial funding promises. There was a major restructuring in 2007, and in 2009 the operation of the ITIs was brought back in-house. In 2010, Scottish Enterprise took the decision to stop investing in new projects altogether. The total spend over that period was some £231 million. The value of the intellectual property that has been generated to date is assessed to be a mere £600,000. On any measure, that represents a spectacular failure.

This week, I asked the Auditor General, Caroline Gardner, to carry out an audit of the performance of the ITIs. When such large sums of public money are involved, it is important that we understand exactly what went wrong, not least so that we can learn lessons for the future.

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Meeting of the Parliament 11 September 2013

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