Building on some capital ideas

Edinburgh is at the heart of Scotland’s burgeoning collaborations between academia and dynamic, businesses – and the results are impressive

by Mark Ford

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Scotland is setting the pace in the fast-evolving technology sector with a flourishing growth rate that is helping to drive Edinburgh’s emergence as a key hub to rival London.

With more than 50 years of technology manufacturing experience, Scotland continues to forge a global reputation for innovation, and for excellence. This is an encouraging success story that is rooted in a dynamic collaboration between business, universities, and the Scottish government; partnerships that are underpinning a sector in the business of generating success.

There have now been around 3000 start-ups in the last five years, and Scotland’s wealth of talented people and world-class universities, together with support for research and access to funding, is spawning some of the most exciting businesses in the global technology market.

At the heart of this burgeoning sector is Edinburgh, one of only a few UK cities outside of London that is home to technology unicorns, where businesses have been valued at more than $1 billion (£700 million), with predictions for that number to grow as technology industries continue to develop their international muscle. Edinburgh’s existing unicorns are digital big-hitters Skyscanner, the flight comparison website, and FanDuel, the fantasy sports website, and with overseas investor interest on the up, the potential for international growth is clear.

The role of the University of Edinburgh’s research and innovation unit, Edinburgh Research & Innovation (ERI), remains key to developing this success. ERI is one of the UK leaders in the successful commercialisation of the intellectual property generated from the university’s world-class research, through licensing technologies to existing companies, and new university spin-outs. In the last five years, the university has supported the start up of more than 180 new businesses in the area, with 44 helped by ERI in the past year alone.

Edinburgh’s technology hub is now made up of fast-growing start-ups such as Cortex, purelifi, and Pufferfish, in addition to the established international companies Microsoft, Apple, and Amazon. Edinburgh also hosts business-based assets such as Codebase, the UK’s largest incubator, CodeClan, Scotland’s Digital Skills Academy, and Informatics Ventures, the Edinburgh-based commercialisation support mechanism.

The university is also working with Scottish Enterprise’s High Growth Spin-Out Programme to build Scottish companies that have the potential to achieve a £5 million turnover or a commercial investment of £10 million within five years, with projected continued growth.

Another important aspect of making Scotland, and Edinburgh in particular, so attractive to investors, in addition to the quality of research and projects, is the entrepreneurial culture surrounding our world-renowned universities. It’s also significant the higher education system, where Scottish university and college students do not have to pay course fees, results in the creation of highly trained individuals who are not carrying the levels of debt that may burden graduates from other areas, and are therefore more inclined to take a chance on a start-up rather than look immediately for the security of employment.

Edinburgh can also offer an affordable and attractive quality of life, and this overall vibrancy in terms of entrepreneurial culture is helping to fuel the levels of success, with students in this city immersed in an environment that is alert to the potential of innovation and commercialisation.

Investment in Scottish technology has increased in each of the past three years, up by 45 per cent in 2014 against the previous year, with the amounts invested also rising by more than 20 per cent, and with a particular surge of interest in ICT. Total investment is now close to it highest level of £250m which was reached in 2001.

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Pictured: David Smith

David Smith, Director of Technology and Engineering at Scottish Enterprise, says Scotland’s capital is providing a platform for the upsurge in Scotland’s new and innovative companies. “There’s a real buzz around the Edinburgh technology scene which is growing in prominence as one of the leading European tech cities due to years of sustained investment in talent and innovation,” he says.

“Edinburgh is now one of Europe’s most successful technology clusters, built around an impressive collection of entrepreneurial talent, science and innovation assets.”

Playing a significant role in helping to attract, and to encourage, overseas interest is Scottish Development International (SDI), the international arm of Scottish Enterprise and Highlands and Islands Enterprise that helps overseas businesses to tap into Scotland’s world-class capabilities in innovation and commerce, and also works to help Scottish companies to do more business overseas, while also promoting this country as a good place to live and work.

 For potential investors, who will be able to access an extensive range of opportunities in funding, the message from Scotland’s thriving technology sector is one of opportunity, and connectivity: to education, to skills, to innovation, and to markets.


City a central digital hub

SCOTLAND’S digital technologies industry contributes around £4bn in Gross Value Added (GVA) to the Scottish economy, with export revenues on the up, and around 80,000 people estimated to be working in this expanding industry, while data capture and informatics are also features of technology and engineering, in turn contributing £12.7bn GVA, and employing around 161,000. From health to banking, and retail to gaming, digital technology is revolutionising every aspect of our lives, and Edinburgh’s technology hub is at the heart of this flourishing Scottish sector.

Scotland’s capital is where you’ll find the UK’s most successful computing start-up community, with the University of Edinburgh’s School of Informatics home to the largest concentration of internationally significant and world-leading informatics research in the UK, and the UK’s largest supercomputing centre (EPCC).

Here also is Scotland’s main focus for UK medical research data sharing, via the Farr Network, and UK administrative research data sharing, via the Advanced Data Research network, and a world-leading genomics data facility at the Roslin Institute, along with a world-leading centre for Earth observation data at theScience and Technology Facilities Council/ University of Edinburgh’s Higgs Centre for Innovation.

Edinburgh is also the focus for major Scottish activities in translational data science, through the SFC Innovation Centres in Data Science and Digital Healthcare, and a major joint venture with the UK’s other principal data science universities at Oxford, Cambridge, UCL, and Warwick, to found the Alan Turing Institute.

 


Life in a cultural oasis

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With its population of almost half a million, Edinburgh not only has three world-class universities, but also offers those who choose to live and work there a picturesque setting, and rich historic and architectural legacy that has earned the city status as a UNESCO World Heritage site. An international creative and cultural centre, Edinburgh is also the world’s first UNESCO City of Literature, and hosts 12 main festivals each year, including the Edinburgh International Science Festival, Edinburgh International Film Festival, Edinburgh Jazz and Blues Festival, and the Edinburgh International Festival, plus the Edinburgh Festival Fringe, which is the largest arts festival in the world, with 49,497 performances of 3193 shows staged two years ago as ticket sales hit 1.94 million.

Named by uSwitch as the UK’s best place to live, the city is home to the second-highest average wage rate in the UK, while the average cost to rent a one bedroom flat in Edinburgh is less than half of the cost in London. Scotland’s capital also tops the UK city charts for the number of people who walk to work, at 16 per cent. Indeed, with the bus and tram network a popular and easy way to get around the city, it’s estimated 54 per cent of Edinburgh residents, who also work or study there, do their commute via public transport, on a bike, or on foot.