Hansard

Coronavirus is, first and foremost, a crisis of public health, but it has also emerged as the defining economic challenge of our time. Its impact is already devastating, and that will continue to unfold over the coming weeks and months.

The Scottish Government tackled the immediate crisis head on. We moved swiftly to inject £2.3 billion into the economy to preserve businesses, protect jobs and provide new opportunities for reskilling. Today’s publication of the programme for government marks the beginning of a new phase of Government action in which we look beyond crisis management to Scotland’s economic future.

Over the past few months, we have seen businesses, through necessity, embrace new technologies at pace and at a scale that would normally have taken years. Members will be as proud as I am that so many businesses chose to pivot their operations to serve our national health service. They have innovated to save jobs and lives.

We are seeing a blurring of the distinction between tech and the traditional. The everyday economy is striving to maintain productive capacity, just as our most inventive tech minds seek to ignite innovation in sectors as diverse as finance, healthcare and tourism.

The lesson is clear: against the backdrop of the pandemic, there will be acceleration in the global trend towards innovation-led economies. Scotland has nothing to fear from that future—few nations do innovation and ingenuity as well as we do.

However, that means that our recovery cannot be built purely on restoration of the status quo. What we require is economic renewal. That means moving with vigour towards a high-tech, low-carbon economy that creates high-value jobs and harnesses the power of technology as a force for social and economic good.

To realise that vision, we need to catalyse our most innovative emerging sectors, and to ensure that they maximise both their individual potential and their capacity to drive growth and job creation across the whole economy. That is why, in July, the Cabinet Secretary for Economy, Fair Work and Culture announced a new £38 million package to support early-stage high-growth businesses.

It is also why, earlier in the summer, I invited Mark Logan to conduct a review of Scotland’s tech ecosystem. As members in the chamber will know, Mr Logan brings a wealth of experience that has been accumulated through 30 years of building Scottish start-ups that perform on the global stage. That culminated in the success of Skyscanner, which remains to this day one of the most significant European tech unicorns ever created. He is widely respected across industry as an investor and adviser, and is passionate about creating an ecosystem that provides a new generation of tech talent with the opportunity to replicate his success. I put on record my sincere thanks to him for his time and his dedication to the review, which was published last week.

Seldom have we seen a report attract such universal acclaim, with key figures from across business, technology and academia endorsing it as being potentially transformational—and with good reason. It is a work of intellect and ambition that makes 34 detailed recommendations that lay down challenges to Government, universities and industry across the key themes of talent, infrastructure and funding.

Mr Logan defines a clear and simple purpose for the ecosystem: it is to produce a consistent

“stream of technology start-ups that reach sustained profitability, including a significant proportion that do so at scale”.

He dismisses complacency with a sober analysis of Scotland’s current performance. Yes—we have had some high-profile successes, but that must not obscure the fact that too few of our best start-ups and university spin-outs succeed in the long term. That is costing us in growth, jobs and tax revenues for reinvestment in a better Scotland.

The report goes on to explain the differences between “post-tipping point” ecosystems, such as London and silicon valley—which achieve a critical mass of investable start-ups, capital and talent—and high-potential “pre-tipping point” tech hubs, such as Scotland. The review’s objective is to identify the actions that are necessary to nudge Scotland over that tipping point.

In the programme for government, we have committed to multiyear, multimillion-pound investment to implement the recommendation to establish a national network of tech scalers. Such facilities are the report’s centrepiece, and would transform the quality and intensity of support that is available to Scotland’s start-ups. In addition to networking, meet-ups and cross-pollination of ideas, they would deliver formal world-class founder education, which would potentially be secured on a national licence from the best providers in silicon valley. Those are powerful commitments that will put the wind of silicon valley commercial technique in the sails of Scottish ingenuity.

Over the next five years, we will also invest in the creation of an ecosystem fund. The fund responds to multiple recommendations, and will be used to make strategic investments in the organisations and activities that create the best possible environment for our start-ups to succeed. Examples include learning from the Finnish model of investing in key tech conferences to attract talent and external capital, programmes to increase the volume of new start-ups emerging from universities, and extracurricular activity in schools to ignite pupil interest and tackle gender imbalance.

We also accept Mr Logan’s view that, in the context of the pandemic, we need to do more to help people to get the digital skills that are necessary for them to enter high-value employment in the technology industry. To that end, we are actively considering how immediate action could be taken through the recently announced training transition fund.

The review sets out proposals for a series of radical interventions across the education system, as it relates to teaching of computing science and related disciplines. However, a hallmark of the review’s quality is its refusal to engage in oversimplifications.

Mr Logan acknowledges that the challenges can be met only through investment of significant time, energy and resource. He places a mutual obligation on Government, educators and industry to work together to deliver progress.

Although we might differ on points on implementation of the recommendations, we do not shirk from the overall challenge. To paraphrase Mr Logan, the Government is prepared to do its part in bringing to life the inherent magic of software development. I am pleased to confirm that the Deputy First Minister is fully engaged with the report, and has already held discussions with Mr Logan about next steps.

In such a short statement, it is possible to offer only a snapshot of what is a very detailed and inventive analysis. There are more recommendations on matters as diverse as improving start-up infrastructure in universities, collaboration with investors, and more effectively harnessing the strategic value of the Scottish diaspora.

That is why, in line with Mr Logan’s advice, we will establish a formal partnership with the tech industry in order to drive progress on the recommendations for which a sustained implementation programme will be required, in order to achieve the necessary outcomes. We are working with Mr Logan to develop that model as a matter of urgency, and will make further announcements in due course. Let there be no doubt, however, that the Government will do what it takes to ignite Scotland’s rise as a first-class start-up nation.

It is my hope that members have been as refreshed as I am by the excitement and optimism that have been provoked by the review. I share that excitement. We have an opportunity to advance a model of economic development by which we not only back singular programmes for incremental progress, but by which we make more systematic interventions that are co-designed by and co-delivered with industry, investors and academia.

I have had responsibility for tech from the very beginning of my ministerial career. I have often said that I consider it to be one of the most exciting portfolios in Government. I am consistently inspired, not just by the community’s creativity and imagination, but by its desire to use those gifts for the good of our country.

What we have lacked is what Mr Logan has now given us: a compelling blueprint with which we can channel that collective energy and spirit. I look forward to getting started.