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Another conference that ignores the problems.
Review of Royal Society of Edinburgh conference
" The Creation of Wealth"
16th November 2005
James Irvine
Teviot Scientific Publications Ltd, Edinburgh
and Perthshire
Filed 04 Jan 06
©www.land-care.org.uk
This should have been an important conference.
There is much concern expressed in the media about Scotland's economic
performance (1). Many Scottish businessmen
are aware of the problem: a problem that in the eyes of many (including
the CBI) is becoming increasingly acute (2).
Many Scottish citizens wonder where the money is coming from to
support the numerous ideological projects generated by the Scottish
Parliament with the commensurate increase in the public's expectations,
but too often linked with a failure to deliver and/or the generation
of a whole array of new problems consequent upon the extravagant
funding of single interest agendas.
Yet Scottish Enterprise (a Scottish Executive
quango) gets through an annual budget of £416.9million of
taxpayers' money (3). What is there to show
for it other than prestigious buildings and a massive staff? And
that vast sum excludes funding for the Highlands and Islands, which
has its own quango and enterprise budget from the Scottish Executive.
Quoting from the publication of the Sheffield
University 2001 Census Atlas (4), the Chief
Executive of the Edinburgh Chamber of Commerce, Ron Hewitt has stated
that in contrast to the 121,000 new jobs created in the public sector
in Scotland since 1997, only 35,000 jobs have been created in the
private sector. The consequence is that the public sector is stifling
Scotland's economic growth (5). Indeed,
one has only to look at the jobs pages of the Scotsman or the Herald
on a Friday to appreciate the reality of the problem.
The current Scottish Enterprise chairman, Sir
John Ward recently made waves - as well he should - but sadly this
was allegedly unintentional. According to press reports, Sir John
was addressing MSPs at a supposedly private meeting to discuss the
problem of Scotland's chronically low economic growth rate. His
message was that the Scottish economy was still too dependent on
the public sector. Indeed, he allegedly went on to say that in places
like Ayrshire, the dominance of the public sector was similar to
that in countries in the old Eastern Bloc (6).
The MSPs did not take kindly to such an outrageous
slander, with allegedly all sorts of defamatory comments aimed at
Sir John. But the government's own figures bear out what he was
saying. In Ayrshire public spending accounts for 74% of the local
economy, only to be beaten by Argyll and Clyde where the figure
is 76%. For the whole of Scotland the figure is 55% compared to
that for England at 40%.
Instead of reacting with such a predictable, ideologically
driven, knee jerk reaction to Sir John's statement of reality, the
MSPs should have responded by setting up a cross-party debate or
discussion. Apparently, they did no such thing. Can the Royal Society
of Edinburgh, which claims to be politically impartial, do any better?
Was a conference on the subject entitled "The Creation of Wealth",
and prefaced by a statement of the economic problem (7),
going to introduce a balanced perspective on this important topic?
Regrettably, the omens did not look good. The
website announcing this whole day conference, almost up to its start,
gave no title for one of the talks and no speaker or title for another.
There were two sessions on education with speakers from the same
university. The political perspective was represented by two speakers,
both of whom had strong current or previous affiliations with but
one political party. Even worse, although Small and Medium sized
Enterprises (SMEs), which make up 99.8% of Britain's 4.3 million
businesses and which are responsible for half of all UK jobs and
turnover, never got a mention anywhere in the programme (8).
In the spirit of trying to be constructive, this reviewer pointed
out this rather obvious omission to the organisers some months prior
to the conference, and when there was clearly an opportunity to
remedy the matter. The suggestion was refuted, with the statement
that the matter would be covered within the existing schedule. It
wasn't.
Professor Gavin McCrone:
Chairman and Vice-president of the Royal Society of Edinburgh
Addressing some 80 delegates in a less than full
house, Professor McCrone started the conference in remarkably downbeat
mode. First, he had some rather discouraging comments for the press.
After some entirely inappropriate reference to "Charterhouse
rules" that clearly did not apply to a conference that was
open to the public, was in the public interest and carried a conference
fee, he expressed his displeasure about any photographs being taken,
but " if you have to .." etc. Presumably this was specifically
directed at this reviewer, who had taken the trouble previously
to email the Chief Executive Officer of the Society seeking his
approval for a modest amount of photographs to be taken. This had
been graciously given, and the suggestions that he had made were
complied with to the letter. It was worrying that the chairman should
appear to so hostile to the press. Like it or not, but www.land-care.org.uk
is now part of the press due to its substantial online readership.
Indeed, the number of visits to the Land-Care website every day
of the week throughout the year would dwarf the attendance at the
conference. Surely, a conference of this nature should welcome press
coverage as part of its commitment to promote informed public debate.
Figure 1:
Professor Gavin McCrone
Chairman of the conference & Vice-president of the RSE
Photo ©Kimpton
Graphics
Next, he proceeded to downplay the widely recognised
problem with the Scottish economy. This is scarcely the way to stimulate
debate, especially coming from such a distinguished and influential
figure. He referred to the many years he had spent at the Scottish
Office, and how important it was to take risks and to accept that
mistakes are an inevitable part of the process. But it may be recalled
that some of these "mistakes" were massive, trying to
bribe foreign companies to invest in Scotland and leaving some very
big white elephants in their disastrous wake. When the foreign investors
left, they took with them much of Scotland's manufacturing base
and created massive redundancies.
So the conference had scarcely begun before it
became apparent that the message from the chair seemed to be "don't
rock the boat." But this reviewer is not alone in thinking
that this boat does need rocking, and urgently.
No mention was made of the prospect of even more
trouble ahead for Scotland's economy. According to Treasury figures,
by 2008 the block grant to Scotland will have more than doubled
since 1999, and will be almost £30bn annually. At that point
a new spending review takes effect, when the rate of increase is
expected to drop off dramatically.
According to Professor McCrone, situations
change. It is no great deal that Scotland - as with the rest of
the UK - has largely lost its industrial base, not manufacturing
anything very much. He gave the impression that he was quite content
that the financial and service sectors had more than adequately
replaced manufacturing as far as Scotland was concerned. But has
it?
Wendy Alexander
MSP for Paisley North.
According to the conference documents;
"Wendy Alexander has held a variety of ministerial positions,
serving in the cabinets of all three First Ministers since devolution
in 1999. Sometimes she is referred to as the "one time minister
for everything, but currently minister for nothing". A graduate
of Glasgow and Warwick Universities, she holds an MBA from INSEAD.
She is currently a member of the Scottish Parliament's Finance
and Education Committees and Visiting Professor at Strathclyde
University."
Figure 2:
Wendy Alexander, MSP Paisley North
Photo ©Kimpton Graphics
While this sounds all very impressive, this website
recalls her performance at the Soil Association/SAC's disastrous
conference held in Paisley in 2003 entitled "Agriculture: the
primary health service?" (9). If this
is the standard of the elite of the Scottish Parliament, then it
is hardly surprising that we are heading for such big trouble.
It is fascinating to observe how a politician's
individual social situation greatly colours how he or she views
policy appropriate for the whole nation? Although no direct statement
was made on the matter, it does appear that reproduction is top
consideration for our Wendy. Thus in her estimate, tackling population
decline, followed by investing in early years, are the top priorities
for the role of government in stimulating wealth creation. These
are important long-term objectives, but something a little more
urgent is currently imperative.
She then went on to emphasise the importance of
stimulating entrepreneurship, omitting of course to mention the
numerous obstacles that her party in government (in Scotland as
part of a coalition with the Liberal Democrats for the past 6 years)
has put in the way of budding, and even established, entrepreneurs.
For an entrepreneur to succeed, he or she must be able to rise above
the endless routine, bureaucratic tasks and energy-draining hassles
to see the wider picture, and the opportunity.
Sadly, her presentation simply amounted
to politician speak. Scotland does not lack entrepreneurs: it just
fails to give them fair breathing space in which to operate. So
Scotland's entrepreneurs prefer to go elsewhere or just give up.
After all, one of the characteristics of a good entrepreneur is
to know when to quit as well as when to start a business.
She made no mention of the problems that
face small to medium sized businesses (SMEs) in Scotland, through
over-regulation and the dominance of the public sector creating
inflated costs and salaries, overgenerous benefits and poor work
ethic. If you want a better pay scale, job security, lots of flexitime
opportunities (including an incredibly high number of sick days)
and the best prospects for a pension, why try and set up on your
own with none of these advantages? Only recently has the Scottish
Parliament promised to reduce business rates back down to match
those in England.
"Scotland needs to think harder
about how to attract and retain value mobile investment embodying
the latest technology and ideas. Today the single most important
ingredient in keeping firms in a region, and attracting new ones,
is the availability of skilled workers.
"Scotland must send strong signals
by providing an improved climate for entrepreneurship and the
implementation of structural reforms that enable innovation and
competition. Incentives to raise the level of entrepreneurial
activity, including minimising the stigma of failure, overcoming
inefficient regulation, as well as increasing innovation, R &
D and technology transfer...."
(Wendy Alexander in Conference documents)
Fine words, but from the perspective of
someone running small businesses in Edinburgh (publishing) and in
rural Perthshire (farming), they are just that. The reality is that
since devolution in 1999 the Scottish Parliament has presided over
the country's mounting economic problems. Extension of Employment
Law has become a serious impediment to the SMEs in the private sector.
Planning regulations and the excesses of the Water Authorities (Scottish
Water as well as the Scottish Environmental Protection Agency) have
added to the difficulties unnecessarily. In farming an icon of Scotland,
the quality of its beef industry, is under serious threat through
misguided and highly expensive overbuilding of the microenvironment
- the desire to have tidy fields with butterflies and to spend vast
sums on raising the standard of water purity which will make minuscule
difference to the persistently poor health of the nation.
There are countless numbers of serious problems
with the planning authorities, apart from their delays and unjustifiable
fees. A local example here is that to date it has taken Historic
Scotland (currently chaired by a previous civil servant who was
head of SEERAD at the Scottish Executive) more than two years -
and still waiting - to come up with a decision as to whether or
not they want to impose a severely restrictive preservation order
on Cultybraggan Cadet Camp, a complex of tin huts that was used
as a prisoner of war camp, and which housed some nasty Germans at
the time who murdered one of their own - scarcely something to glorify
(10). The restrictions on further use,
and the costs imposed on any purchaser who would be required to
maintain such poor buildings long after their sell by date, is frankly
absurd. Has Scotland really got the money to waste on such projects?
It certainly is mighty unhelpful to the farm business next door,
which of course is encouraged by another department of the Scottish
Executive to diversify and bring employment to this rural area,
or to raise its game so as to be more competitive in the market
place. Fat chance.
A classic example of how Government unnecessarily
interferes with business to its substantial detriment is the case
of Margaret Beckett and the use of tallow as a biofuel (11).
On the 7th December 2005 the National Farmers Union Scotland (NFUS)
said in a press release:
"The UK Government has three weeks to avoid a major set
back in the use of renewable fuels, caused by its current plans
to implement the EU Waste Incineration Directive. The plans would
also lumber the agricultural industry with a significant, but
completely unnecessary, cost.
"The industry has convinced the European Commission of the
problem. However, Brussels has only committed to reviewing the
legislation, not amending it, prior to implementation. That review
would last two years. Up to 22 of the 25 EU member states have
agreed that tallow can contribute to be used as fuel. UK farming
unions, meat wholesalers and the renderers' association are urging
the UK Government to follow suit"
NFUS President John Kinnaird said:
"The current UK Government position flies in the face of
commitments not to goldplate EU legislation. Bizarrely, if this
decision foes ahead, we will see rendering plants switching from
burning renewable fuel to burning oil just two weeks after Government
announced its plans to encourage the country to do exactly the
opposite"
With regard to this reviewer's publishing
business, the changes to the education system, both in relation
to schools and universities, have not helped in providing the skilled
workforce to which Wendy Alexander claimed to aspire. The merit
of holding a recent degree from a Scottish university has been seriously
devalued, with the product too often lacking basic skills in communication
and numeracy.
Unfortunately, at the end of the morning
Wendy Alexander MSP had to return to the new "palace"
of Holyrood (with its reputation for economic crass mismanagement
during its creation) to vote on the proposed extended opening hours
for pubs in Scotland - yet more misconceived legislation generated
by MSPs. Misconceived, because alcoholism and antisocial behaviour
(much of the latter through drink and drugs) are already massive
problems in Scotland. How extending
already pretty liberal opening hours can help the problem beggars
belief. A bit like the Land Reform (Scotland) Act which enables
the public to more or less go wherever and whenever they like over
farm land, with no effective control or education, but relying on
the individual's own assessment of what is responsible behaviour.
Likewise, the devolved Scottish Parliament found time to ban hunting
for foxes, thereby destroying many rural businesses and a worthy
tradition. Ironically its progenitor, appointed a lord of the realm
no less for his services to the Labour party when he lost his seat,
currently languishes in goal for wilful fireraising that put at
risk the lives of others.
Is this the environment that is favourable
to business and to the Scottish economy?
Dennis Stevenson (Lord Stevenson of Coddenham)
Scotland's finance Sector
According to the conference documents:
"Currently Dennis Stevenson is Chairman of HBOS (the amalgamation
of the Halifax Building Society and the Bank of Scotland), and
very recently retired as Chairman of Pearson plc. He is a non-executive
director of Manpower Inc, Chairman of the House of Lords Appointments
Commission and Chairman of Aldeburgh Productions Ltd. Until September
2000 he was the Prime Minister's Special Adviser on the application
of ICT in education. He currently sits on the cross-benches in
the House of Lords"
Figure 3:
Dennis Stevenson
Lord Stevenson of Coddenham
Chairman of HBOS
Photo ©Kimpton Graphics
There is no doubt that the financial sector has
been very successful in Scotland: indeed, much of Scotland's economy
now depends upon it. Fortunately, the HQ of HBOS is based in Scotland,
but it could have been otherwise. Indeed banking is such a global
business that the Bank of Scotland might have been involved in some
entirely different amalgamation or take over deal, that could have
left Scotland in a very different position. Witness what has happened
to the Clydesdale Bank following its take over by the National Australia
Bank Ltd: its flagship building in central Edinburgh is up for sale
and many of its staff are to be laid off.
The Royal Bank of Scotland is even bigger than
HBOS, having acquired the NatWest bank in 2000 in the biggest takeover
in British banking history. Based in Edinburgh it is now one of
the largest banks worldwide. Nevertheless, in the current global
market massive and long-established institutions like the London
Stock Exchange seem to be vulnerable to takeover bids from foreign
parts. The insurance industry is also dominant in Edinburgh, but
is even more vulnerable to change than banking. Although Abbey National
was not a Scottish based company, look what happened to it. It now
has its HQ in Spain.
While the huge success of the financial sector
in Scotland is to be applauded in terms of the amount of tax the
government receives as a consequence, it may not be so good for
SMEs who make up the vast majority of the workforce employed in
Scotland, as in the rest of the UK.
Thus in the eyes of Dennis Stevenson - and indeed
of other speakers at the conference - the driving force of Scotland's
economy should be centred on a link up between Glasgow and Edinburgh,
to make one unit competing globally as a single team. Dundee might
get a little look in, but forget Aberdeen or any of these other
places consigned to Scotland's hinterland.
With the predominance of the public sector and
the wealth of the financial sector, it is not easy to run a SME
in Edinburgh, for example. Office rates are high. Wage demands are
high even if you can attract staff, or be able to keep them for
long enough for the business to benefit from the training that needs
to provided. House prices are high, so are property rentals and
car parking is diabolical.
The banks make a substantial part of their huge
profits from within the UK: that is, from UK citizens and from SMEs.
This is achieved through high bank charges operating through a wide
range of activities, such as interest above base rate, transfer
charges, differential exchange rates, cheque charges etc, etc. Only
recently has effective pressure been put on banks to desist from
holding on to cash from UK cheques for 5 working days before releasing
funds, allowing the banks access to vast amounts of free cash at
their client's expense. The upside is that the banks may be more
inclined to take a risk on new ventures, but probably only against
security that would be worthy of a nuclear bunker.
When a sector such as banking is so dominant it
can have serious consequences for SMEs when a main player changes
its trading arrangements. Thus, it is alleged, one or more of the
main banks headquartered in Edinburgh decided to stop using a certain
Edinburgh printer, preferring to transfer their printing contracts
south of the border. As a result a long established Edinburgh printer
went out of business. That had a knock on effect on this reviewer's
publishing business. Printing in Edinburgh has declined from the
state of excellence that it used to enjoy to a shadow of its former
self. On discussing this situation with a banker at the conference,
the hard-headed response was "the printing company should not
have had its portfolio so heavily based on such a limited range
of customer". Fine, but if banking and the public sector are
so dominant and since SMEs are finding it difficult to survive,
where are these other customers supposed to come from?
The high salaries and massive bonuses (based on
the bank's profits) paid to many bankers contribute to widening
the gap between the "haves" and the "have nots"
in Scotland, as in the rest of the UK. The level of debt incurred
with the banks by the average UK citizen has, in the views of some,
reached alarming proportions, but a rich source of income for the
banks.
Banks are a bit like supermarkets with severe
competition between the few that remain, as each fights for dominance.
The main providers of the wherewithal (SMEs and private citizens
in the case of banks, and farmers in the case of supermarkets) that
enable these institutions to make their huge profits generally get
a raw deal. Of course it is better that the HQs of some of the banks
are in Scotland. Whether Scotland actually benefits from the tax
that they pay depends on the performance and policies of the political
party in power: for devolved matters in Scotland and for reserved
matters in Westminster (REF Linklater review 2005).
Back in the year 2000, the UK government said
that it recognised that SMEs were fundamental to future UK economic
growth, and pledged to make the country the best place in the world
to start and grow a business by 2005 (12).
It set up the Small Business Service (SBS), but according to the
CBI this has failed to achieve four of its seven targets (13).
"To build an enterprise culture: failed
To make it easier to start up a firm: achieved
To encourage entrepreneurs in disadvantaged areas and by under
represented groups: failed
To make Government more accessible and helpful: achieved
To improve regulation: failed
To improve access to funding: achieved
To create a positive environment for growth: failed"
In the view of the CBI:
"The SBS is not to blame for these results. How can an enterprise
economy break through when the Government presides over systematic,
stifling red tape, a discredited planning regime and a society
that becomes more politically correct and risk-averse by the day?"
This reviewer does not recall Lord Stevenson
making any significant reference during his presentation at the
conference to the role of small or medium-sized businesses (SMEs)
in the economy of Scotland or of the UK as a whole. Perhaps in his
view they are but fodder for the highly successful financial sector.
Jim McColl
Chairman & Chief Executive, Clyde Blowers Ltd
The conference documents state:
"Jim McColl started his career as an engineering apprentice
with Weir Pumps in Glasgow. After six years in engineering and
six years part-time study he left work to take up full-time study
for a BSc degree in Technology and Business Studies on a four
year course at Strathclyde University. After achieving a BSc degree
with Honours in 1978 he returned to Weir Pumps where he remained
for three years while studying part-time for a Masters Degree
in Business Administration.
"In 1992 he bought 29.9% of Clyde Blowers plc a small engineering
company with a full listing on the London Stock Exchange. Prior
to purchasing his stake in Clyde Blowers it had a market capitalisation
of £2.2m. In 1999 Jim led a management buyout of Clyde Blowers
plc to take the Company private. Over the 10 years Clyde Blowers
has grown at an annual rate in excess of 35% and has developed
into a portfolio of truly Global Engineering."
Clearly this is a major success story concerning
an individual and a Company. Clearly also this success is good for
the Scottish economy and for employment in the area. Clearly lessons
are there for others to try and emulate. But this example is hardly
likely to be the way forward for the Scottish economy in terms of
the broad picture. Too much industrial expertise has been lost from
too many areas. Even Jim McColl referred to the absurdity - particularly
in relation to time scale - of the administration of some of the
government grants that are currently supposed to help. In farming
this is all too obvious, with grants that are conceived to help
(ironically encouraging people to get out of farming) coming on
line far too late with a time scale that is far too slow, and flanked
by so many rules and regulations that it may well be wiser either
not to try, or to go it alone without the government aid that is
so often wasted (14, 15).
For every one farmer there would appear to be 10 bureaucrats. Or
is it now even more?
But hopefully some new entrepreneurs will be able
to follow Jim McColl's example, with enough resolve and energy to
fight through the plethora of excessive regulation and service charges.
Two examples are to be found in the food industry in Scotland -
Andrew Macphie of Glenbervie and Andrew Booth of The Store (16).
In the former, the company has already achieved growth and established
its national reputation: in the latter, it will be important to
see whether it opts to remain small or to try and grow but still
retain the standards of genuine quality that have come to be associated
with it.
The Rt Hon Brian Wilson: Energy
According to the conference documents:
"Brian Wilson stood down at the last general election after
18 years as an MP for Cunninghame North in the West of Scotland.
Following the election of the Labour Government in 1997, he held
five ministerial posts - each of which gave him an involvement
in energy and particularly the North Sea. He was the Scottish
Industry minister in 1997-98 and the UK energy minister from 2001
- 2003. When he announced his intention to leave Parliament, the
Prime Minister asked him to act as his Special Representative
on Overseas Trade, with a particular focus on energy issues. Although
no longer an MP, he has been asked to continue in that role. In
addition, he is now involved in advising several energy companies,
particularly in the renewable sector."
He gave a well prepared and forthright talk on
the sources open to the UK for the supply of future energy. Indeed,
his talk was a model of presentation - clear, precise and to the
point.
He made no bones about it. If the UK's energy
supplies were to be secure in the future, nuclear was a must. He
dismissed renewable sources from wave and wind as not being sufficiently
developed or sufficiently reliable on which to base the UK's economy,
although they may have an important ancillary role. He correctly
emphasised the political vulnerability of depending on gas or oil
supplies piped to the UK from or through countries that have not
always been the best of friends with the UK. The recent behaviour
of Russia towards the Ukraine and eastern members of the EU that
depend on gas coming from Russia illustrates his point well. Russia
quadrupled the price, and when it was not paid Russia shut down
supplies on January 1st, 2006. It took some international pressure
before a temporary compromise was reached. And it is President Putin's
turn to head up the G8.
Brian Wilson gave his audience some insight into
the political shenanigans played by some parties at Holyrood and
at Westminster, whereby they use the vital topic of future energy
supplies as political lever in order to achieve some other agenda.
On account of the limited lifespan of our current
nuclear power stations and the limited future supplies of North
Sea oil and gas, he emphasised how important it was to get on with
making the necessary decisions - based on facts, rather than fancies
- before it is too late. Failure to make these decisions in the
very near future would result in Scotland (along with the rest of
the UK) becoming dependent on the import of energy to keep the lights
on. The UK would then be dependent on the importation of energy,
food (following the government's decision to decouple farm subsidies
from food production) and most manufactured goods.
It was pity that he was not able to stay to contribute
to further discussion throughout the conference. But he did raise
the level of anxiety as to what the current Scottish Parliament
at Holyrood was up to on the vital matter of our future energy supplies.
Scotland's future wealth creation would heavily depend on coming
up with the right answer and in time. The French have already built
their new nuclear facility and could build one for us in Scotland
as soon as asked, he said. Have we really fallen so far behind that
we might have to get France to do the job for us? But, there again,
the French showed a long time ago that they can make "modern"
trains to schedule, that both tilt and run on time.
Sir Alan Langlands: Education 1
Principal and Vice-chancellor, University of Dundee
According to the conference documents
"Alan Langlands has been the Principal and Vice Chancellor
of the University of Dundee since 2000. The University is recognised
as world leader in biomedical research, the UK's first ranking
university for teaching quality and a key contributor to the economic
development of Scotland. In the past 5 years, turnover has risen
by 40% to £150m pa; the value of research grants and contracts
has risen to an average of £60m pa and the number of spin
out companies has doubled.
"Alan maintains a wide portfolio of interests relevant to
healthcare and higher education. He recently led the Gateways
to the Profession report published on 2nd November 2005 (16b).
He chaired the Commission on Good Governance in Public Services
published in February 2005. He chairs a steering group representing
25 medical schools world-wide, committed to developing an "international
virtual medical school" which aims to achieve maximum benefit
from new educational technologies and is convener of the Universities
Scotland Funding Policy Group. He also chairs the Biobank's Board
of Directors, overseeing a major £62m genetic epidemiology
project on behalf of the Wellcome Trust and the Medical Research
Council.
"As Chief Executive of the NHS in England from 1994-2000
and the Secretary of State principle policy advise for the NHS,
he was accountable to Parliament for the effective stewardship
of a £42bn revenue budget."
Sir Alan Langlands
Principal and Vice-chancellor, University of Dundee
Photo ©Kimpton Graphics
As the last speaker of the morning, Sir Alan talked
about creating the right conditions for improving the economic contribution
of Universities through new company formation, effective collaboration
with existing businesses, new models of technology transfer and
new educational initiatives. His focus was on life sciences "from
the cell to the community" as he put it: including the emerging
era of "translational medicine" (whatever that is) and
therapeutics. The challenge for Scotland - and it is indeed a challenge
- is to "stay at the leading edge of scientific and technological
development in clearly defined areas" and "to win in the
global competition for capital and good people". His aim was
"for universities to created the environment in which great
students and great research contribute to progress."
Fine words indeed, but what about the reality?
Sadly the debate never got round to discussing the reality in any
depth. The reality is that in the UK both the NHS and the education
policy are in turmoil. Billions of pounds have been spent by government
trying to get the NHS to deliver what the government promised it
would. As in other areas, the expectations of the public were raised
but not met. Worse still, too many hospitals are dirty with the
result that hospital infections, such as MRSA, claim alarming numbers
of avoidable deaths. Excessively restrictive working time directives
have created havoc with staffing and their training. Out of hours
GP services often now amount to a highly unsatisfactory telephone
service with a "nurse" at the end of the line. In some
areas rural services are reduced to frankly dangerous levels, and
NHS dentistry a scarce commodity. We are told that the UK is beginning
to catch up with our European neighbours. What a disastrous fall
from grace for a country that once boasted with some justification
the excellence of its health service.
Education has not done much better. Scotland was
indeed once famous for its focus on education. But the policies
that are now being followed are doing much to undermine, rather
than enhance, that reputation. Education in schools currently produces
youngsters generally lacking in numeracy and communication skills,
and a dearth of science. How is this going to help Scotland become
a globally competitive nation in focused areas of expertise?
And what has happened to our universities? With
political pressure for more and more scholar leavers to go to universities,
the consequence is that the standard of teaching necessarily falls.
Commensurate with that is the standard of the qualifications awarded
(17). The fact that an academic education
following school is not the best option for the majority of school-leavers
is not recognised, in the ideological but illogical drive to "give
as many young people "the best chance in life irrespective
of their backgrounds." Does one really need a plumber or a
bus driver with a degree in philosophy or medieval history? If a
country wants a prosperous economy it needs to have the skilled
workforce to maintain it. Most of these skills do not require a
university type of education, and are none the worse for that.
What can be an alarming experience is to enquire
as to what now constitutes an honours degree or an MSc degree, even
at long established and famous Scottish universities. Such is the
drive to commercialised university funding that its "bums on
seats" and "numbers at graduation" that count: a
commodity rather than what used to be a quality product.
But even Sir Allan seems to appreciate that, saying
in diplomatic speak:
"we should not underestimate the difficulties we face in
maintaining our present position"
This reviewer would go further than that. If present
policies are continued it will be inevitable that foreign governments
will recognise the drop in quality and send their students elsewhere,
or generate equally as good or better education for them at home.
If our students were better at languages they may even in the future
opt to study abroad.
After all China was due to overtake the UK in
the international economy stakes by now or in the very near future,
and they would appear to be getting rather good at science and its
application.
As an employer of students and recent graduates,
the changes described above in Scottish education are all too obvious.
Indeed, the situation is now such that it is hardly worth interviewing
graduates from certain universities, as there is little confidence
that the qualifications that they boast might even suggest employable
material - although the aspirations, and indeed expectations, encouraged
by the authorities in these individuals seem to have no bounds.
Douglas Anderson
Founder and Vice Chairman, Optos plc
According to the conference documents:
"An engineer by training Douglas is founder and Vice Chairman
of Optos plc, a company that designs, manufactures and supplies
advanced retinal imaging systems particularly into the US primary
eyecare Market. Optos plc today commands a leading position in
the primary eyecare market in the US. Having grown rapidly in
recent years (listed in Sunday Times Tech Track 100 fastest growing
companies for the last 3 consecutive years) with revenues for
last fiscal year of $48m and projected current year $68m.
"Douglas is also Chairman of Crombie Anderson Associates
Ltd, a long-established and profitable multidisciplinary design
consultancy employing 30 full time designers and engineers offering
services in business communications, and technology product development
focussing on healthcare in particular.
"Douglas has extensive experience in the successful management
of the product development process and in building early stage
companies in the healthcare field. He is the founder of four high-tech
start-up companies, two of which are operating in the medical
technology arena. He has been involved in raising over £40million
in private and institutional funding including taking one company
to AIM"
Here was another commercially highly successful
entrepreneur, although he was at pains to point out that it was
not thanks to market analysts or other forms of advisers, who had
repeatedly told him that the product he was developing was not wanted.
The idea behind the Optos technology is excellent, and it is difficult
to understand how the official advisers were not able to recognise
it as such.
His experience shows that It is not always useful
to seek advice from "advisers" who may know little about
the technology of business in question, but who may have an MBA
or diploma from some university or other, or indeed have no such
qualification.
Clearly he succeeded on account of persistence,
focus and confidence in his own project and abilities, but he did
not make it clear how he managed to stay in funds after so many
years of being turned away. Neither did he describe what difficulties
or otherwise he had encountered concerning the more recent start-up
companies with which he has been associated.
Surprise, surprise! This
reviewer never managed to catch the chairman's eye to ask a single
question throughout the whole conference thus far.
Professor Jane Brown FRSE
Chair in Enterprise Management, University of Dundee
The conference documents state:
"Jane Brown holds the Chair in Enterprise Management at
the University of Dundee. Through research, teaching and consultancy
she has been involved for many years in the management of technology
innovation in a number of international, high technology industries.
For the last six years she has delivered the business training
programme for the RSEESEn successful Enterprise Fellowship Programme.
She worked initially for 15 years as a biomedical researcher at
Stanford and Edinburgh Universities, and at the MRC Human Genetics
Unit. She became increasingly involved in the process of developing
g novel technologies in the UK, USA and Japan, directly and through
consultancy and research. The life science industries have been
the main but not exclusive focus. During two years in the Oil
& Gas industry she designed and raised funds for the Nova
oilfield technology venture fund based in Aberdeen, and since
1999 she has worked with young firms in a wide range of industries.
She was a member of the Scottish Science Advisory Committee 2002-4,
a member of the Scottish Higher Education Funding Council 2001-5
and is currently the Chairman of the Scottish Stem Cell Network."
 Professor Jane Bower FRSE
Chair in Enterprise Management
University of Dundee
Photo ©Kimpton Graphics
Certainly the concept of trying to harness scientific
research in Scotland to commercial gain is of paramount importance
to the future economy of Scotland. Professor Bower was the only
speaker to make any significant mention of the importance of the
development of small companies, but probably thought it undiplomatic
in the context of the conference - and indeed on account of her
affiliations - to highlight the difficulties.
Again, there was little other than anecdotal evidence
of what success a university department of enterprise management
was achieving. Or indeed what the quango Scottish Enterprise was
achieving, or not achieving.
Dr John Brown FRSE
Chairman, BIA Scotland
The conference documents state:
"Dr Brown is an independent Non-Executive Director. He currently
Chairs the Governing Council of the Roslin Institute in Edinburgh
and is Chairman of Scottish Biomedical (a division of Biomedical
Industry Association, BIA). Dr Brown is a Non-Executive Director
of a number of private and public biotech companies including
Ardana plc, Prothenics plc and Cambridge Antibody Technology plc.
He sits on the Advisory Board of the Life Sciences ITI in Scotland.
Dr Brown is a member of the DTI Technology Strategy Board and
the DTI Biotechnology Leadership Council. He is also Chairman
of BIA Scotland.
"Until Dec 2003, Dr Brown was Chief Executive of the FTSE
250 biotech company Acambis plc, a leading producer of vaccines
to treat and prevent infectious disease. Dr Brown joined ICBMs
as Finance Director in 1995 and was appointed CEO in 1997. At
Acambis he was responsible for the acquisition of OraVax Inc,
a Boston, US-based vaccines company, together with a £23
million rights issue and a $40m strategic alliance with Baxter
International. Dr Brown managed Acambis through the UK IPO (Initial
Public Offering) process and most importantly on to profitability."
 Dr John Brown FRSE
Chairman, Biological Industry Association Scotland
Photo ©Kimpton Graphics
All this is very fine, but compared to the global
market where are the results for Scotland, or indeed for the UK?
As one who served on the Foot and Mouth Inquiry for the Royal Society
of Edinburgh (18), and as a farmer who
appreciates just what a disaster that epidemic was, this reviewer
is left wondering what had happened to UK biotechnology: and how
useful it could and should have been if it had been properly applied.
Included among the submissions to the inquiry
was the complaint from Colin Fink, Joint Scientific Director, Micropathology
Ltd, about how his offer to help was rejected (19).
Also included was the complaint from United Biomedical Inc (20),
who were working with the USA Department of Agriculture, whereby
the offer of help with modern PCR technology was refused.
Diagnostic slide tests suitable for use on farm
were available at the time of the outbreak, but were never deployed.
PCR technology was also available, but not used. To this day the
objection by those with influence that "the tests have not
been validated' goes on, while mighty little effort has been made
to try and achieve such "validation." Indeed, there was
much public suspicion that the UK Government was deliberately preventing
the use of technology until such time - however slowly - government
sponsored institutions such as Pilbright and Porton Down managed
to advance enough to get their own patents in place (21).
In his submission to the RSE FMD Inquiry, Magnus
Linklater (22) clearly articulates the
concerns of many as to the manner in which such a disastrous epidemic
was handled. The points he makes are highly relevant to the environment
in which industry can effectively operate within the UK. One of
the central aspects is the trust, or lack of it, that the public
has in science.
The emphasis in terms of the UK's science base
went into statistical epidemiological modelling, rather than applying
and expanding the existing biotechnology in terms of vital rapid
on farm diagnostic tests. As a consequence the slaughter policy
lead to vastly more animals being slaughtered than was necessary.
Again, in relation to the SARS outbreak there
was impressive international cooperation between Asia and Europe,
but the UK did not register in the effort. Where is all this impressive
biotechnology that we are supposed to have? Germany, for example,
did much better.
With regard to Avian Flu, China can apparently
make and vaccinate billions of birds, while the UK waits in the
queue to buy stock of vaccine that would be due for delivery well
after the main risk period is over - coincidentally coming into
the next financial year.
Vaccine production is in the hands of large commercial
companies. If they don't think there is enough money to be made
they do not participate. Organisations such as WHO and OIE that
might be expected to co-ordinate international effort to control
diseases such as FMD seem to be ineffective. How then does a small
or start-up company get involved in this massively important area?
No mention was made of the criminal activity of
animal rights protestors and the serious effect it has had on the
development of biotechnology in the UK. Huntingdon Life Sciences
left the UK for the US some 3 years ago, and Cambridge University
abandoned plans for a neuroscience centre in January 2004 (23).
Minority groups, with or without the use of criminal techniques,
bolstered by disproportionate media coverage, have excessive influence
on biotechnology, be it related to progress in medical research
or agriculture. Indeed single interest lobby groups have a too much
influence on how farming is conducted in the UK today. Having no
financial responsibility for what they advocate, they are free to
indulge in ideological programmes that greatly affect the viability
of many businesses in Scotland, as in the rest of the UK (24).
The GlaxoSmithKline plant at Montrose on the Scottish
east coast - an area desperately in need of employment - is under
threat. 700 jobs are thought to be at risk following the collapse
of a proposed deal to buy the plant. The Dutch Chemical giant, Alzo
Nobel, was planning to buy it but pulled out, citing the poor current
economic conditions in the pharmaceutical sector. Whether it was
poor economic conditions within the UK or internationally is not
clear.
Conclusion
As an entrepreneur of the ME variety, I did not
get much encouragement from this conference. Indeed it was profoundly
depressing.
Here, the successful and the good did the speaking
- with rare exception (and he had got so big that he was pretty
well untouchable) every speaker gave the unspoken impression that
it was undiplomatic to criticise the establishment, lest their own
boats be rocked. There was no doubting the sincerity of all involved,
but it could perhaps be said that they or their organisations had
become successful in spite of the system, or by going along with
it although realising that possibly in the long term it was not
the course to follow. But to fall out of favour with the ruling
politicians would result in being starved of the possibility of
having influential status and might put their access to public financial
support at serious risk.
Perhaps that is what is wrong - why the Scottish
economy is not doing as well as it should. Apparently nobody can
tell the emperor that he has no clothes, and so the embarrassment
continues. The CBI would appear to be correct in its assessment
that the Small Business Service (SBS) , set up by Government as
an agency of the Department of Trade and Industry, has failed in
4 of its 7 targets:
it has failed to build an enterprise culture;
it has failed to encourage entrepreneurs in disadvantaged areas
and by under represented groups;
it has failed to improve regulation;
it has failed to create a positive environment for growth.
This reviewer can only agree with the CBI when
it states:
"The SBS is not to blame for these results. How can an enterprise
economy break through when the Government presides over systematic,
stifling red tape, a discredited planning regime and a society
that becomes more politically correct and risk-averse by the day?"
Yes, it was another conference that ignored the
problems. The Outlook 2005 conference held by the Scottish Agricultural
College (SAC) the previous day, also did just that (16).
But one had hoped for better from the Royal Society of Edinburgh.
©www.land-care.org.uk
References
1. Linklater, Magnus (2005). Linklater's
Scotland. Once a nation of adventurous entrepreneurs.
This article, originally printed in the Spectrum section of Scotland
on Sunday on 15th May 2005, is reproduced here with the kind permission
of its author and of the newspaper.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 16 May 05,
www.land-care.org.uk Click Here to View
2. CBI (2005). Growing north-south
divide in business start-up rates is cause for serious concern.
New Release. 10th October 2005.
http://www.cbi.org.uk
3. http://www.scottish-enterprise.com
4. Sheffield University 2001 Census
Atlas.
http://www.shef.ac.uk/sasi/publications/peopleandplaces.htm
5. Hewitt, Ron(2005). Public sector
is stifling Scottish growth.
The Scotsman, 13th Sept 2005
http://www.scotsman.com/?id-1929392005
6. Barnes, Eddy (2005). Revealed:
state's grip on Scotland
Scotland on Sunday. 9th Oct 2005, p1
7. http://www.royalsoced.org.uk/events/recent.htm#wealth
8. Irvine, James (2005). Scotland's
continuing economic decline.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 10 Oct 05,
www.land-care.org.uk Click Here to View
9. Irvine, James (2003). Agriculture:
the primary health service? Soil Association and SAC conference,
Paisley 28 May 2003. High in hype but poor in credibility.
See FOOD Homepage, filed 29 May 03, www.land-care.org.uk
Click Here to View
10. Irvine, James (2005). Historic
Scotland obstructs as it sits on its hands for 9 months.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 05 Sep 05,
www.land-care.org.uk Click Here to View
11. Editorial (2005). The absurdity
of Margaret Beckett's goldplated tallow.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 08 Dec 05,
www.land-care.org.uk Click Here to View
12. CBI (2005). A more dynamic
start-up market: enabling the enterprise revolution.
Enterprise revolution2.pdf
http://www.cbi.org.uk
13. CBI (2005). Government missing
targets to help small businesses. News Release. 11th August 2005
http://www.cbi.org.uk
14. Irvine, James (2001). New
enterprises -new beginnings. Farmers workshop sponsored by SAC,
Coupar Angus.
LandCare Scotland: vol. pp 45-50.
15. Editorial (2005). Land Management
Contracts - a joke, if they were not so sad.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 28 Feb 05,
www.land-care.org.uk Click Here to View
16. Irvine, James (2005). Talk
up farming, don't talk it down, and never mind reality.
Review of SAC Outlook Conference "Taking market opportunities"
Edinburgh 15th Nov 05
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 17 Dec 05,
www.land-care.org.uk Click Here to View
16b. http://www.dfes.gov.uk/hegateway/hereform/gatewaytotheprofessions/index.cfm
13. http://www.dfes.gov.uk/hegateway/hereform/gatewaytotheprofessions/index.cfm
13. http://www.dfes.gov.uk/hegateway/hereform/gatewaytotheprofessions/index.cfm
17. Editorial (2004). The fallacy
of university top up fees. If you are going to employ a graduate
you had better ensure that he or she is a good one.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 25 Jan 04,
www.land-care.org.uk Click Here to View
18. Royal Society of Edinburgh
(2002). Inquiry into Foot and Mouth Disease in Scotland.
http://ww.royalsoced.org.uk
19. Fink, C. G. (2002). Submission
of evidence to the RSE FMD Inquiry, in his capacity as Virologist,
Physician and Jt Scientific Director, Micropathology Ltd, University
of Warwick Science Park, Coventry.
See Submitted evidence, RSE FMD Inquiry, www.royalsoced.org.uk
20. Walfield, A. M (2002). Submission
of evidence to the RSE FMD Inquiry, in his capacity as Director,
Patenting and licensing Affairs, United Biomedical Inc, Hauppauge,
NY, USA.
See Submitted evidence, RSE FMD Inquiry, www.royalsoced.org.uk
21. Critchley, Mary (2005). "Tests
have to be validated by the OIE. We are waiting on that" Lord
Bach.
See entry 14th December 2005, http://www.warmwell.com
22. Linklater, Magnus (2002).
Submission to the Royal Society of Edinburgh Inquiry into Foot and
Mouth Disease in Scotland.
See Submitted evidence, RSE FMD Inquiry, www.royalsoced.org.uk
23. Mansell, I., Henderson, M.
and Charter, D. (2004). Oxford's research centre's contractors pull
out after animal rights protests.
http://www.timesonline.co.uk/article/0,,3561-1185350,00.html
24. Irvine, James (2004). Concerns
about the validity of statements made by on the condition of SSSIs
by members of Environment LINK,
Review and comment on a case study presented by Kirsty Macleod at
People Too conference, Perth
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 17 Nov 04,
www.land-care.org.uk Click Here to View
13. http://www.dfes.gov.uk/hegateway/hereform/gatewaytotheprofessions/index.cfm
REF. Irvine, James (2003). SARS: just look at
the speed of scientific progress. If can be done for SARS, why not
for FMD?
See SCIENCE Homepage, filed 06 Apr 03, www.land-care.org.uk
Click Here to View
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