National Software Strategy for Scotland : The Strategic Options

Option 3: “Aim for Innovation”

As we discuss later in this document, Scottish software lacks clear identity and numbers of new start-up firms; our exemplar studies showed that it is not known for any specific strengths or advantages.

Innovation is a feature of stronger, deeper more internationalised software regions throughout the world. Evidence from the exemplar work shows that innovation is an embedded and important characteristic of more mature software clusters such as those in Israel, Colorado and Silicon Valley.

The necessary pre-conditions appear to be:

• a strong higher education system producing high level skilled software graduates;
• a critical mass of software development activity (including independent software firms and embedded software development/hardware firms).

Evidence from Israel and Colorado suggests that given local will and entrepreneurship, suitable capital can be attracted to the region, which can also in itself provide linkages to wider marketing networks and commercial skills.

Scotland has a significant output of computer science graduates and universities with strong international reputations. However, again it lacks any critical mass or presence of international software firms to retain, train and apply their skills in significant numbers. More start-ups in software arise from large firms than directly from universities, and this is not unique to Scotland.

Israel provided evidence of how two local start-up firms ( Magic and Checkpoint) had a major impact on attitudes to innovation in software. However, the Israeli economy was locally bounded (unlike the South East of England for Scotland) and had no easy exit route for graduates.

Recent work by the Royal Society of Edinburgh and Scottish Enterprise on commercialising Scotland’s Science and Technology puts forward a strategy to increase the contribution Scotland’s science base makes to economic wealth in Scotland. A number of priorities are identified aimed at:

• existing companies;
• spin-outs;
• corporate base;
• finance;
• academic achievement;
• infrastructure.

These provide an added framework to help develop the innovation potential. Overall we believe support and encouragement to innovation and commercialisation should continue, including within the software community. However, self generating, sustainable software innovation of a significant scale will largely depend on developing the scale and linkages of the software community in Scotland. As such it should be both a continuing theme and a mid to longer term aspiration.