1. Scottish Smart Specialisation Strategy Journey
Rob Clarke, Highlands and Islands Enterprise
Alison Munro, Scottish Enterprise

2. Presentation objectives
Scotland’s Smart Specialisation approach
Overview of Scotland
Scotland’s economic priorities
Insights - Renewable Energy and Food & Drink
Next Steps on Scotland’s RIS3 journey
Opportunities & Challenges of RIS3

3. Scotland’s Smart Specialisation Approach
Supportive of “Specialisation” concept
Part of a DG Regio S3 “pilot assessment; not (yet) on the S3 Platform
Driven by a Scottish-wide approach
Value in the process - opportunity to learn from others, to share ideas and to refresh our approach
Supportive of “Specialisation” - have pursued a cluster/sector approach since the late 1990s. Joined up public sector governance
Driven by a Scottish-wide approach – engaging all public agencies.

4. Overview of Scotland Population: 5.2m (8.5% of UK)
Area: ,420 sq miles (33% of UK)
Geography mix of urban & rural
Working Population 2.5m
GVA (economy) £105 billion (8% of UK)
Scottish Parliament Established in 1999
Devolved powers: Education, health, justice,
(Scottish controlled) economic development, transport
Reserved powers: Defence, tax,
(UK controlled) social security,
macro-economic, foreign policy, etc

5. Purpose
To focus the Government and public services on creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth.
GES articulates the purpose of government and whole of public sector to support growth
Originally written in 2007, refreshed in 2011 to add objectives around low carbon economy

8. Growth Sectors Food & Drink Sustainable Tourism Financial & Business
Creative Industries
(Digital Markets)
Energy
Life Sciences
Financial & Business
Services
Food & Drink
Sustainable Tourism
Enabling Technologies
Universities

9. Renewable Energy “Once in a generation” opportunity
Harnessing natural advantage; building on existing capability
Driven by government policy –100% of electricity demand to be renewable generation by 2020
The challenge: to capture economic and social benefits

10. Renewable Energy
Strategy led by Energy Advisory Board – govt, industry, academia
Collaborative approach to:
Infrastructure: ports & harbours, R&D, device testing
Funding: public (UK, Scottish and EU) and private

11. Renewable Energy Collaborative approach to:
Research: R&D, device testing and deployment
Skills: from apprentice to Ph.D

12. Renewable Energy International Connections are key success factors:
Inward Investors
Global Supply Chain
International Markets

13. Scotland Food & Drink - The key numbers
Primary sector – 69,000 jobs
farming, fishing and aquaculture
£2.9bn turnover
£836m GVA
Manufacturing – 44,000 jobs
1200 companies
£9bn turnover
£5.4bn exports
£4bn GVA
Retail & Services – 246,000 jobs
wholesale, retail and foodservice 13 13

14. Scotland's Strengths
Bakery - 11,300 jobs £1bn turnover £417m GVA
Drinks –10,800 jobs £4.4bn turnover £2.7bn GVA
Fish & Seafood - 8,300 jobs £1.3bn turnover £278m GVA
Meat processing - 5,900 jobs £968m turnover £178m GVA
Dairy - 2,700 jobs £524 turnover £134m GVA
Fruit & Veg - 2,000 jobs £476m turnover 14 14

15. Scotland’s strengths Strong research institutes
Product and process innovation
Positive global brand, identity & consumer image 15 15

16. The Scottish Food & Drink Strategy
Strategy was developed and owned by the Industry – led the development process through Scotland Food & Drink
Took 18 months to refresh and engaged a huge amount of the industry in the process.
First Strategy to have an accompanying PUBLIC SECTOR ACTION PLAN – brings together all the public agencies who have a hand in making the strategy happen.
Sets our clear Roles and Responsibilities 16 16

17. Strategy Model Grow the Industry to £12.5 bn by 2017
Cememting a global reputation,
With products available to match demand
Authentic description
Scottish where appropriate
Romance the image
£0.6Bn
An inclusive target for our industry
£12.5bn includes fishing and agriculture
Processing target remains £10bn
Adding more value
Premium brands
Moving up the value stream
£1.2Bn
Building on the capabilities we have or need to develop
Naturally Healthy
Better for You
Health Enhancing
£0.7Bn
Core to the strategy is economic and environmental sustainability
Reputation as a “Land of Food & Drink”
Premium
Health
Provenance
Sustainability
Innovation Skills for Growth
Collaboration Scale

18. Delivering the Food and Drink Strategy
Meet the Buyer & Buyer Briefings
It’s a Team Effort and involves a wide range of interventions :
Highlight a few initiatives:
INSIGHTS –
SKILLS ACADEMY
FOOD & HEALTH INNOVATION 18

19. Key Performance Indicators
Measure
Target
Progress and Comment
Turnover
£10bn to £12.5bn
£11.9bn – Great progress – increased sales in UK and international markets
GVA
£4.1bn to £6.1bn
£4.8bn – Good progress,
Continue outperforming GVA of UK & Scottish benchmarks
On track – although challenging with variations from quarter to quarter
R&D Spend
0.25% to 0.75% of sector GVA
0.25% - No progress to date, and significant growth still required.
Innovation and R&D are focus of a number of big new projects in the sector which are just launched and may have a positive impact over time
Productivity
Equal UK level for food processing
Continue outperforming UK level for food & drink processing
Particular performance issue with food processing sector
The outstanding productivity performance of the scotch whisky industry
means the overall performance of the Scottish food & drink
Exports
£3.7bn to £5.1bn
£5.4bn – Great progress – food exports £1.16bn
new stretch targets to 2017 in development
Real Focus on performance and building future success.
All parties – Industry and public bodies are bought into ensuring that Scotland Food & drink is successful
Proof that the process is working even in difficult economic times. 19

20. Next Steps on the Journey
Working with our “Assessor” to refresh our S3 approach
Tell a better story on the why and how
Understand the focus of our specialisation
Drawing more on the evidence base
Priorities for future EU Funds
Using the process to learn and explore new ideas
Why – have we focused our approach in certain sectors, what do we hope to achieve and telling the story of the how-development process. Industry led with real understanding of demand and focus on success criteria.
Specialism – we are no good at everything in our Key Sectors – over the years we have been drilling down to areas where we have real competitive advantage.
e.g. in Food & Drink – focus is not on bulk, commodity items but on premium products in Red Meat, Whisky, Seafood.
In Renewables are specialists areas are in Wind, wave and Tidal generation.
Evidence Base – say more about how we are using evidence to shape and refresh our approach e.g. Work underway to refresh our Key Sectors which is focussing on better understanding key companies and their competitive position in global markets and value chains.
EU Funds – a need to tie the strategy together with a clearer understanding of how we will bring together the “Package” of funding from EU (structural funds, Horizon 2020 programmes and TRES) with UK and Scottish monies to bring about our future ambitions.
Biggest opportunity is for learning - building new understanding by engaging with other regions. 20

21. Smart Specialisation Opportunities / Challenges
Learning and peer review
Potential for collaboration
Enhanced private sector role – leading and funding
More Strategic use of EU funding
Challenges
Demonstrating RIS3 impact on economic growth
Matching academic and industry focus

22. Role for the Commission
Lead the process of evaluation to demonstrate the value of RIS3 as a driver of economic growth
Maximise the learning potential of RIS3
Identify potential synergies between Regional Policy and Horizon 2020
Don’t adopt a rigid approach to ex-ante conditionality
Make clearer the synergies / alignment between SFs and H2020

23. Questions?