Boosting business investment in research and development and enhanced workplace innovation

Key points:

  • From 2018 over a period of 3 years we will provide £110m in grant support for business research and development (R&D)
  • Aim to grow Scotland’s business expenditure on R&D
  • Delivering workplace innovation programmes to support companies to unlock hidden talent and innovative new ideas.

We have set an ambitious target of doubling Scotland’s business expenditure on research and development (R&D) from £875m in 2015 to £1.7bn by 2025. To assist with this, we are providing over £110m in grant support for business R&D over the next 3 years by increasing grant support for R&D from £22m to £37m per annum. Significant progress is already being made – business expenditure on R&D in 2018 was £1.242bn. Businesses in Scotland employed around 14,000 R&D staff in 2018, up from around 13,000 in 2017 – which takes BERD jobs in Scotland to their highest level in the series.

In addition we are committing up to £750,000 until 2020 to support the Rural Innovation Support Service to broker collaborative innovation specifically in the food and drink supply chain.

Business R&D in Scotland is closely linked to the world-leading R&D taking place in our universities. We will continue to support university research activities in Scotland, and related interactions with businesses, through SFC.

Case study: State-of-the-art new freshwater salmon hatchery will enhance fish health and welfare

Salmon farming company Scottish Sea Farms announced in 2018 that it was to open a new £48 million freshwater hatchery at Barcaldine near Oban, with the aim of further improving how fish are farmed in Scotland.

The new centre of excellence will create at least 10 new high-value jobs in rural Scotland, as well as enabling company growth for further job creation in future.

The onshore hatchery will supply the company’s 40 farms across Scotland’s west coast, Orkney and Shetland. It will also carry out industry-leading R&D work there to help the company tackle a range of challenges facing the fish farming industry.

To assist with this pioneering work, the company received a £1.28 million R&D grant. In addition to supporting the work at Barcaldine, the funds will help the company develop new, innovative processes and technologies across all its sites. This will include data capture and analysis to drive efficiencies, developing more humane processes, recycling a greater proportion of by-products, as well as harvesting wind and wave energy to reduce reliance on fuel.

Scottish Sea Farms MD Jim Gallagher said: “Researching and developing new approaches and technologies is key to ensuring that we continue raising the healthiest fish in the most responsible but also the most environmentally sustainable way, and this latest £48 million investment aims to advance our work in both areas.

“The £1.28m grant means we will be able to do more of this planned R&D even sooner, accelerating both the innovation and the anticipated benefits for fish health and welfare and for the environment.”

We are working collaboratively across the public sector to build on the investment made in phase 1 of Scotland’s university-hosted Innovation Centres which are having a transformational effect on our economy. Funding for the next phase has already been announced for Censis (the Centre of excellence for Sensor and Imaging Systems, up to £9.25m), IBIoIC (Scotland’s Industrial Biotechnology Innovation Centre, up to £11.1m), the Data Lab (up to £13.5m) and the Construction Scotland Innovation Centre (up to £10.1m).


The Scottish Edge competition for entrepreneurs has funded 369 start-ups and has created over 1800 jobs

We recognise the importance of progressive business models, workplace innovation and Fair Work as central to our approach to creating value and business innovation. In partnership with SCDI, we are working with business to pilot two Productivity Clubs. Launched in late summer 2019, the initial pilots are supporting businesses who want to improve their own performance and share their advice and experiences to help others do the same. The Clubs, based in Edinburgh and Glasgow but including businesses from surrounding rural areas, are helping build managerial capability and increasing the diffusion of innovation.

Case study:

Perth and Kinross Council, supported by the Can Do Innovation Challenge Fund, is co-developing an innovative smart low carbon energy network with five Scottish small to medium enterprises. The project aims to reduce carbon emissions while delivering a cost saving to the council.

The project has already led to 15 new jobs across the five companies, with an additional 66 jobs forecast in the next three years. Three of the five companies have developed protectable IP and have managed to gain £2.5 million additional investment as a result of the project. The forecasted, future revenue from the project is expected to be over £5 million.

One of the companies, Edinburgh based technology developer StorTera, has developed innovative battery technology, attracted additional investment, grown the business and started exporting - all as a direct result of the project.

The council has gained valuable innovation management experience through the process while being able to develop five innovative proof of concept solutions. The initial carbon savings in phase 1 alone has been 17 tonnes of CO2 with considerable future savings expected in phase 2. A clear line to future procurement has been established which will deliver significant economic impact directly, and indirectly, for the council.

Michael Figures, Business developments project officer at Perth and Kinross Council said:

“The Can Do Innovation Challenge Fund is a great way to encourage and explore innovation to develop cutting-edge solutions to meet the challenges of today and tomorrow, for an ever-more inter-connected and complex world.”

In Realising Scotland’s Full Potential in a Digital World: “A Digital Strategy For Scotland” Scottish Government made a commitment to support people and communities through social changes. Developing the frameworks and principles that provide the foundations of an ethical approach to digital technologies will that appropriate guidance is in place to enable a confident and secure digital society.

Lastly, our new Research Data Scotland service will launch in Spring 2020. It will provide support for researchers to access and use data about people, places and businesses in a secure setting for public benefit and help to attract investment to Scotland.

Key resources:

Scotland CAN DO: an innovation action plan for Scotland

Scotland Can Do

Scottish Enterprise: Workplace Innovation Fund

Fair Work Convention

Productivity Club Scotland

Science and research - University research