• New Nesta report looks at the characteristics of five small innovative nations

Getting innovation right could be worth £12billion to Scotland over the next five years, according to new Nesta research which recommends how the country can best reap the rewards of innovation-led growth, regardless of the outcome of September’s referendum.

In the report When small is beautiful: lessons from highly innovative smaller countries, Nesta found that innovation can and does drive prosperity in smaller countries. It compared the recent economic fortunes of two groups of countries with populations under 10 million - innovation leaders and innovation laggards - and found that the innovation leaders enjoyed greater economic growth.1 The predicted £12billion growth for Scotland was based on what would happen over the next five years if it experienced the same increase in productivity as the leaders.

The research also analysed five small innovation leaders - Estonia, Finland, Israel, Singapore and The Basque Country – that score highly on a range of innovation measures, such as research and development (R&D) investment and the adoption of new technologies, to identify common themes. The key characteristics that underpin these countries’ innovation were found to be:

·         Getting downstream innovation right: Not just having ideas and inventing technologies, but taking them to market. This requires big business, entrepreneurs, government and universities to work together.

·         Openness: Not just selling innovations to the world but also embracing the best global ideas and prospering from them, and welcoming talented workers from overseas.

·         Innovation pervading the whole of government: Supporting innovation directly through research and funding and promoting it through government’s wider activities as well, such as public service procurement.

·         Effective, entrepreneurial innovation institutions: Small innovative countries have effective well regarded innovation institutions which are related to the state but removed from central political control.

·         A sense of national mission: A belief that innovation is an important part of the country’s future, and national story.

However, some longstanding innovation policies that have been promoted in the UK differ from the policies adopted by smaller innovative countries. This means, whether Scotland remains in the union or not, innovation will be crucial to its future. Scotland’s innovation system is currently weighted towards academia, with world-class educational institutions but low business R&D.

Stian Westlake, director of policy and research at Nesta, comments: “This report shows that small countries can be world-beaters when it comes to innovation. The ones that do have a few features in common. They’re good at commercialising technologies, not just having ideas. Their governments work together with businesses to make innovation happen. And they have a strong sense of national mission, a belief that innovation is important to the future of their country. We believe this research is relevant to the discussion of Scotland’s future, whether Scotland chooses to stay in the UK or become an independent country.”

The report also reveals that getting innovation right could be worth £5billion each for Northern Ireland and Wales.

When small is beautiful: lessons from highly innovative smaller countries will launch at a roundtable event in Edinburgh on Monday 30th June.

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Nesta has offices in Dundee and London.

Footnotes:

1. The countries analysed were: Israel, Singapore, Sweden, Finland, Austria, Denmark, Switzerland

About Nesta: (www.nesta.org.uk) is the UK's innovation foundation. We help people and organisations bring great ideas to life. We do this by providing investments and grants and mobilising research, networks and skills. We are an independent charity and our work is enabled by an endowment from the National Lottery. Nesta is a registered charity in England and Wales with a company number 7706036 and charity number 1144091. Registered as a charity in Scotland number SC042833. Registered office: 1 Plough Place, London, EC4A 1DE

For all media enquiries please contact Laura Scarrott in Nesta’s press office: [email protected] / 0207 438 2697