Life Sciences
The next item of business is a debate on motion S2M-2644, in the name of Jim Wallace, on life sciences.
I am delighted to open this debate on Scotland's life sciences sector; indeed, I think that this is the first specific debate in the Parliament on such an important contributor to Scotland's economy.
The sector is a key and growing part of our economy. Many challenges undoubtedly lie ahead, but the sector can justifiably claim to be one of Scotland's major success stories. The economic and social benefits that can arise from developments in life sciences are potentially enormous. That was brought home to me in stark terms in January this year, when I led a mission of Scottish life sciences companies to China. The companies are ambitious and innovative and wanted to seek out partnerships and opportunities in a country whose demographics mean that even securing a small share of the market promises to deliver widespread benefits and considerable rewards. Indeed, during question time, Mr Gallie highlighted the opportunities for taking life science developments to developing nations throughout the world.
From the discovery of the antibiotic to the development of the first cloned mammal, Scotland has been responsible for key breakthroughs in health-related research. Our innovations have been a key catalyst for productivity and growth, as new ideas drive enterprise, create new products and markets, improve efficiency and deliver benefits to firms, customers and society.
I see life sciences making a major contribution to creating sustainable, long-term growth in our economy, but a true partnership approach that involves the Government, industry, academia, the national health service and the enterprise networks will be required. That partnership is at the heart of our new life sciences strategy, which is outlined in "Scottish Life Sciences Strategy: Achieving Critical Mass for Sustainable Growth", which I launched last month. The publication of the strategy represents a pivotal point in the remarkable development of the sector, which is industry led, but founded in partnership.
The strategy sets out a long-term vision of a sector that is globally focused. It seeks to exploit our talent and strengths in scientific excellence, financial services and innovative business models and it is coherent for all parts of the sector in Scotland. I firmly believe that the strategy can guide our collective efforts and help Scotland to realise its full potential as a world-class player in scientific research and its industrial applications.
Page 13 of "Scottish Life Sciences Strategy: Achieving Critical Mass for Sustainable Growth" mentions the financial community. The document states:
"Scotland's investment community and the local life sciences industry are poorly connected. We will seek to improve this through dialogue between our communities to reduce the barriers to investment."
What are the barriers to investment? What is the Executive doing about them?
It has been felt that there has been disconnection—although that might be too much of a generalisation—in a number of key areas between the life sciences sector and the business and financial community. I have discussed that matter, which is reflected in the section of the document from which Fiona Hyslop has just quoted. Perhaps opportunities are not being recognised. Yesterday, I followed up the commitment that I gave when the strategy was launched by writing to a number of financial services sector leaders in Scotland to invite them to meet me and players in the life sciences community in order to try to establish dialogue. We are also trying to address another issue that has been raised: how we can help companies that are looking for venture capital in the £2 million to £5 million range. There are sometimes long lead times for drug development and much life sciences work can be inherently risky. However, I will say more about that in a moment.
First, I want to consider the different partners. Our universities are powerhouses in the field of life sciences and there are particularly large clusters of life scientists in our cities, which brings the advantages of critical mass. That has helped our life sciences sector to secure about one fifth of all United Kingdom higher education research income, which is the highest proportion that has gone to any part of the United Kingdom.
It is worth bearing in mind the contribution that our universities make in life sciences. They are responsible for 13 per cent of the UK's first life sciences degrees, 16 per cent of the UK's pharmacy degrees, 31 per cent of the UK's first genetics postgraduates and 30 per cent of the UK's microbiology PhDs. Those figures show the extent to which Scotland punches above its weight, given the size of its population.
Increasingly, that research excellence in life sciences is being translated into real benefits for the wider economy. Research at the University of Dundee has spawned a substantial biotechnology cluster that employs some 2,500 people and accounts for 14 per cent of the local economy. In Edinburgh, the creation of a £200 million biomedical research centre will create the UK's largest research site. Six thousand jobs will be provided and more than £440 million will be put into the economy each year. Edinburgh will become one of the world's top 10 locations for biomedical research and development.
I accept that it is crucial that we maintain our competitive edge. That is why, since devolution, ministers have committed record levels of investment to Scotland's universities. By the end of the current spending review period, they will be receiving £1 billion a year, which represents a 20 per cent real-terms increase since 1999. Much of that money will go into research.
Our life sciences company base is expanding. There are 550 life sciences companies and organisations that employ more than 26,000 people throughout Scotland. The sector contributes an estimated £582 million of gross value added to our economy, but the challenge remains to build critical mass. Although the strategy may be long term, the work to develop our life sciences capacity and capabilities continues apace.
I will give some examples of that. Two weeks ago, I was privileged to participate in the official opening of United States-owned Upstate's new Dundee facility and to share a platform with the Nobel prize winner Professor Ed Fischer, whose scientific discoveries are being utilised in the technology that is applied by Upstate at Dundee. That opening followed hard on the heels of the announcement by Inverness Medical Innovations of a multi-million pound investment—and the creation of 500 new jobs—in Stirling, in the field of heart disease. That speaks volumes about our highly educated workforce, our infrastructure and the increasing breadth and depth of the skills and knowledge base within a number of life science fields. Only yesterday, a £15 million package to create a centre for health science in Inverness was announced. That heralds a world-class facility for health care and biotechnology research, education, training and business development.
Those are just some of the major projects that are going on. A wide range of businesses are operating in life sciences, from Hebridean Biotech in the Western Isles to ProStrakan in the Borders and from CXR Biosciences in the east to Crusade Laboratories in the west, all of which are striving to fulfil our 15-year vision of building critical mass.
In a number of key areas, the potential for success is even more striking. The fact that Scotland is already recognised as a European and international centre of excellence for stem cell-related research makes it an attractive location for talented scientists worldwide. We appreciate that ethical issues surround some of the work that is being undertaken, but with a clear, stable and publicly acceptable regulatory framework that has been derived through full debate and engagement with the public, industry and scientists, we believe that the benefits will be recognised in the long term.
Our universities have the expertise and although our company base needs to grow, it has ambition. Where can the Government and its agencies add value?
The minister mentioned the IMI investment in Stirling, which could lead to the creation of 500 jobs. Is he able to tell the Parliament how quickly those jobs will come on stream? Are they not dependent on the manufacturing that will come from research? Can we be certain that that manufacturing will bear fruit relatively soon?
I cannot give an exact date. The proposal involves a combination of high-value research jobs and manufacturing jobs. Both when I discussed the possibility of a location in Scotland with IMI representatives and at the launch, I found that there was considerable confidence that the work that would be done would be pioneering in nature and at the cutting edge and that it would be possible to deliver on the expectation that 500 jobs would be created.
As well as having the Executive's full support, IMI will get help from the intermediary technology institutes. The ITIs, to which I will return, represent just one of the ways in which we have been supporting the life sciences sector.
The Scottish co-investment fund has played a crucial role in helping to stimulate and support a wide range of early-stage life science investments by providing up to £2 million. However, as I said in response to Fiona Hyslop, there remains a funding gap for technology companies—especially those in the life sciences sector—of between £2 million and £5 million. We have recognised that and the enterprise networks are carrying out a consultation on a new Scottish investment fund.
As part of that process, I am pleased to be able to indicate today that the Scotland Executive and Scottish Enterprise will each commit £20 million to the fund, subject to a positive outcome to the consultation. We intend to use the £40 million to lever in resources from a range of other players, including the private sector. That should provide a substantial fund to help to address constraints facing life sciences and other innovative businesses, as part of our firm commitment to help them to realise their full growth potential.
The investment of £450 million in the intermediary technology institutes—ITI Life Sciences, ITI Techmedia and ITI Energy—shows how serious we are about the importance of the contribution that science can make. All three ITIs will help to stimulate company and research base growth. Indeed, ITI Life Sciences was critical to securing the investment in Stirling Medical Innovations by IMI, to which I referred earlier.
Will the member take an intervention?
My apologies; I am in my last minute.
Scotland's life sciences sector has already benefited significantly through the support mechanisms that we have put in place and we intend to build on that initial investment. The partnership approach that the Executive is taking is not confined to my department alone. The Executive knows that Scottish science cannot continue to prosper and deliver our current level of excellence without a steady stream of future scientists. Therefore, it is vital that our schools play their part too. To ensure that that happens, we have allocated £10 million to education authorities over three years from 2003-04 in support of the science strategy. Indeed, support will also come from the Scottish Executive Environment and Rural Affairs Department and our Health Department. We cannot rest on our laurels. Scotland continues to face stiff competition from mature life sciences locations in the United Kingdom, around Europe, in the United States of America and elsewhere.
To help to ensure that we can go forward with the strategy, a life sciences alliance will be established. The group will include representatives from industry, academia, Executive departments, enterprise networks, the financial community and others to ensure that we can provide a fully joined-up approach to the development of the sector, including the broader infrastructure that is necessary for global success. I am delighted that Simon Best, the chairman of Ardana Bioscience, has accepted my invitation to chair the alliance.
We have much to be proud of—indeed, there are many good reasons to feel positive about the Scottish economy and life sciences in particular. We should remember not only that life sciences deliver a positive message for the economy but that the products benefit people's lives, health and welfare.
The strategy will allow us to play to our strengths. It is up to each of us now to play our full part in delivering the strategy. I remain confident about the future of life sciences in Scotland and I commend the motion to the chamber.
I move,
That the Parliament recognises the important role of life sciences in Scottish society and the contribution they make to economic prosperity, wealth creation and improving the health and quality of life of millions of people; believes that the sector harnesses Scotland's world-class scientific excellence and fosters greater entrepreneurial spirit; endorses the Scottish Executive's support to the sector, notably through successful, innovative initiatives such as the Scottish Co-investment Fund and the Life Sciences Intermediary Technology Institute; welcomes the Executive's commitment to the Life Sciences Strategy, working in partnership with industry, academia, the investment community, NHS Scotland and all the other stakeholders to create a stable infrastructure in which the life sciences sector can flourish, and supports the firm intention to work in partnership to deliver the 15-year vision for 2020.
The debate is likely to be one in which there will be a large degree of consensus around what we need to do in Scotland to invest in the life sciences.
For a long time, my view has been that the key to economic development in Scotland is to make Scotland the science capital of Europe. Last week, in his budget statement, we saw the Chancellor of the Exchequer steal some of my ideas when he launched three science cities south of the border. Clearly, life sciences play a major role in the Executive's wider strategy to create a smart, successful Scotland and, specifically, to try to make Scotland the science capital of Europe.
I want to put on the record an issue that arose in relation to the role of the new intermediary technology institutes. The ITIs are part of the long-term solution to the problems of the Scottish economy. I believe that they have a vital role to play in making Scotland smart and successful. Quite rightly, the Executive has earmarked £450 million over 10 years for investment in the ITIs.
A point to which I keep returning—indeed, I have made it every time the ITIs are discussed in the chamber—concerns the onus on every politician and responsible commentator in Scotland not to jump on the passing short-term bandwagon and hammer an ITI at the first hurdle, when the first mistake is made and the first investment or risk goes belly-up, just because the ITI took a risk and failed. If an ITI has not had any failures, it is likely that it has not taken risks in the first place.
It is regrettable that someone of George Kerevan's intelligence was so critical in The Scotsman of the IMI announcement. Mr Kerevan wrongly stated that all the intellectual property would transfer to the company. However, it is a fact of life that if we want to create the high-end, added-value investment and jobs of the future, we have to be in the business of doing deals with companies such as IMI. The onus is on all of us to champion decisions where risk is taken in the light of experience.
Does the member agree that it is important for inventors to ensure that it is written into their contracts that they retain the intellectual property of their ideas? In law, the default is otherwise.
Of course I agree with Stewart Stevenson. Who could disagree with him?
Does Alex Neil agree that one of the things that holds back business in Scotland is the attitude of the Scottish banks? Does he think that the banks have become a bit more adventurous in being prepared to lend money and grant longer-term loans with such companies?
Absolutely—particularly at the lower end of the scale. As the minister said, someone who is trying to secure an investment of £15 million or £20 million in Scotland can find that such investments are generally much easier to obtain than a £2 million investment, particularly when it comes to start-ups or higher-risk sectors. Access to finance at reasonable rates and with reasonable terms and conditions is a precondition and prerequisite to achieving our objective of making Scotland smart and successful.
As the minister mentioned, we have a long track record of invention in Scotland, not just in the life sciences but in many other areas of activity. Three recent inventions in the life sciences are magnetic resonance imaging, Dolly the sheep and the p53 cancer suppressor gene. All those discoveries were made by Scottish universities in Scotland. We suffer, however, from a general problem in life sciences, as in other areas: when we invent something in Scotland, often somebody elsewhere makes it. Much of the downstream activity gets done furth of Scotland, and we need to address that.
About 17 per cent of all the patents that are registered in the UK in an average year are from Scotland, yet only about 5 per cent are actually developed in Scotland—a difference of 12 per cent. We are creating wealth for other nations and are making discoveries that other people exploit. We need to find more imaginative and innovative ways of ensuring that a higher percentage of the research that is undertaken in Scotland ends up in development and downstream activity here. That is as true of life sciences as it is of many other sectors.
I had the pleasure of speaking at the University of Glasgow just before Christmas, at the launch of a project on the pooling of research facilities in Scotland, specifically in physics and chemistry. Last week, I chaired a presentation by organisations now known as SUPA and ScotCHEM. SUPA is the Scottish universities physics alliance; ScotCHEM is the formal organisation for pooling together all the chemistry departments, and their resources, of the main Scottish universities. Their work must be developed fully, and I hope that the minister will continue to support their initiatives.
Even considering the strength that we have when we pool our resources and the number of scientists we have available, we still come below Oxford, Cambridge and University College London. Our objective as Scottish universities incorporated, as it were, should be to be larger than any one of those single institutions. I believe that we must pursue that goal in life sciences as well as in other disciplines.
Dundee provides a classic example of what we need to do throughout Scotland. When I attended the University of Dundee in the early 1970s, it only produced brilliant economists. There was no research into cancer and there were no biomedics—there were none of those leading-edge sciences and technologies. In the past 10 to 15 years, Dundee has put itself on the map, not just of Scotland or Europe but of the world, as a major centre of excellence in cancer research and, more important for the long term, gene technology and discovery.
If we can repeat the Dundee example in many other parts of Scotland, we can create the high value-added, exciting, leading-edge economy that we all desire. Unfortunately, I cannot tell members exactly how to do that in seven minutes. However, I welcome the creation of the new £40 million fund and I hope that it will be used to leverage additional private sector funding into research and development in Scotland. I tell the minister that he will have the support of members on this side of the chamber for that project.
I move amendment S2M-2644.1, to leave out from "endorses" to end and insert:
"and also recognises the need to root that spirit and its resultant wealth in Scotland by gaining the economic powers that will allow Scotland to produce an increasingly more competitive proposition, thereby retaining and attracting more investment and talented people and providing an environment that encourages the growth of indigenous and multi-national businesses in Scotland."
I welcome back to the chamber the Deputy First Minister after his mysterious absence yesterday. Perhaps this is the first success of the Executive's new anti-truancy strategy that was announced today.
Much as I enjoyed Alex Neil's contribution, he did not in any way speak to the SNP amendment, which was about a completely different subject. I suppose that we should be grateful because we have been spared Jim Mather's speech for the 15th time, although I dare say that we will hear it later.
I welcome this opportunity to debate the important role that life sciences play in Scottish society and the contribution that they make to economic prosperity and wealth creation. As has already been said—I am sure that there will be much consensus in this debate—Scotland has the potential to be among the world leaders in life sciences. There is no doubt that the life sciences sector has been a Scottish success story in recent years.
There are well over 360 organisations in Scotland's life sciences community and they employ more than 25,000 people. The number of companies in the sector has grown by an average of 28 per cent each year, outstripping the European average of 15 per cent since 1999. We in Scotland have 50 per cent of the UK industry's manufacturing facilities. As we heard, Dolly, the world's first cloned sheep, was born in Scotland in 1996. Scotland has an enviable reputation for the quality of scientific research in academia. The recent research assessment exercise saw a doubling of top-rated 5* departments and a trebling of staff.
We are particularly strong when it comes to people. As the Deputy First Minister said, Scotland is home to many top bioscience graduates. With less than 9 per cent of the UK population, our universities have 13 per cent of the UK's bioscience degrees, 61 per cent of the UK's pharmacy degrees and 31 per cent of the UK's genetics graduates.
The sector is particularly strong in the universities, which have world-class research capacity. Much of that research is funded by the Medical Research Council, which has an annual spend of £40 million on medical research in Scotland.
As Alex Neil said, one university that has a particularly strong life sciences department is Dundee, where division of signal transduction therapy—DSTT—which is a collaboration between the university and six pharmaceutical companies, has seen great success. It has been one of the largest research collaborations between the pharmaceutical industry and the UK research institution. In 1999, the pharmaceutical company Pfizer Ltd described DSTT at Dundee as its most important academic collaboration worldwide. Therefore, there is much to celebrate.
I note that the University of Dundee has made an interesting proposal to set up a Scottish institute for life sciences. Dundee would be the perfect place for such an institute if we were to go down that road. I ask the Deputy First Minister to look on that proposal sympathetically.
I should declare a small interest in passing. I have a slight connection with the University of Dundee, in that I am on the board of management of the students association. Sadly, that is not a pecuniary interest, but I put it on the record in case anyone thinks that I am being unduly partisan.
Not everything in the garden is rosy. The UK lags behind in the bioprocessing sector. The preferred investment location for bioprocessing is the United States of America and western Europe, not Scotland or the UK. At present, the UK has only 2 per cent of global capacity for microbial-derived biologics. There is a great opportunity for growth here. The BioIndustry Association works hard in the area to promote the sector. The bioscience innovation and growth team, which it leads, reported to Westminster in November, recommending that the UK build a strong bioprocessing sub-sector that would include a network of bioprocessing centres of excellence throughout the UK. The industry believes that the recommendation to set up such centres of excellence presents an opportunity for existing Scottish companies and the economy of Scotland as a whole.
The difficulty of obtaining funding is one of the greatest challenges that the sector faces. Considerable investment from third parties is required to grow life science companies and develop products for the marketplace. Since 2001 there has been a serious downturn in the investment market, with the result that many bioscience companies are struggling to realise their potential. Scotland is home to a large number of financial institutions and has an active angel-investment network, but we simply do not have enough venture capitalists. That is holding back the sector. The industry believes that tax breaks are vital for Scottish organisations that invest in bioscience, because they would encourage our healthy financial community to invest at home.
Does the member agree that a reduction in corporation tax from 30 per cent to 20 per cent would provide a major boost to the sector?
As the member knows, I am generally in favour of tax reductions across the board. I am sure that the sector would welcome any measure that would reduce the tax burden.
The Conservative amendment refers to the Scottish life sciences community strategy. The industry welcomes the strategy in broad terms, but the people in the industry to whom we spoke had a number of concerns about aspects of the strategy, such as the speed with which it was drawn up and the fact that some sections of the community thought that their views were not sought or taken on board. The people to whom we spoke thought it important that the Deputy First Minister should personally chair meetings and have hands-on involvement in the strategy—rather than leave that to Scottish Enterprise—because that would give the strategy the necessary impetus. I hope that the Executive will reflect on that.
We heard about the intermediary technology institutes. The ITI in Dundee has been very active and recently announced a substantial investment in Stirling Medical Innovations. The jury is still out on whether that will turn out to be an effective use of public funds, particularly as such a large proportion of the ITI's budget has been spent on that single project. My colleague Brian Monteith will say a little more about that.
The industry's concerns are much the same as those of other sectors. There is continuing concern about the growth of bureaucracy and regulation, which holds back development, and about the lack of available skills. We need to encourage more young people to choose a career in science, to provide the flow of graduates that the industry needs.
The deputy presiding officer is looking at me menacingly and I know that I am over time. The greatest challenge for the industry remains the need to fill the funding gap. We can provide more venture capital only if we can produce more venture capitalists. For that to happen, we need a business-friendly environment in which people of high net worth are encouraged to come and live and to locate and invest in Scotland. Policies such as those of the Deputy First Minister's party, which wants to increase the higher rate of income tax by 10 per cent for people who earn £100,000 or more, would have only a negative effect on that agenda. The same can be said for the proposals to charge local income tax, which would inevitably hit higher earners and drive away potential investors. We need joined-up Government that considers all the implications of its policies on enterprise and growth, instead of just paying lip-service to the industry's needs.
The life sciences industry presents a major opportunity for Scotland—
You must finish now, Mr Fraser.
That opportunity will be realised only if we are prepared to put in place the policies that will allow the sector to grow and to gain access to those who have the confidence to invest in Scotland.
I move amendment S2M-2644.2, to leave out from "endorses" to end and insert:
"notes the Scottish Executive's support to the sector, notably through initiatives such as the Scottish Co-investment Fund and the Life Sciences Intermediary Technology Institute; regrets, however, that the Scottish Life Sciences Community Strategy failed to engage adequately with all sectors of the industry; notes the industry's very real concerns about bureaucracy, infrastructure and an appropriate skills base, and therefore calls on the Executive to supplement glossy brochures with tangible action to grow biosciences and encourage venture capitalist investment in Scotland by creating a more business-friendly environment."
I am happy to contribute to the debate. Dundee is so highly respected in the life sciences that other members have mentioned matters to which I intended to refer, but I will try not to repeat what has been said.
I agree with the Scottish Executive that the sector represents a great success story for Scotland and should be encouraged to grow, so that it makes an even more significant contribution to Scotland's economic prosperity in the future. The document "The Scottish Life Sciences Strategy: Achieving Critical Mass" identifies four key factors that will be at the heart of the strategy: the right people; the right resources; greater focus; and greater collaboration. It goes without saying that there is a need for adequate funding and the right focus, but I think that the most important factors are the need for the right people and the right collaboration.
Dundee represents a prime example of how securing the right people can act as a catalyst for future generations of eminent scientists. Our groundbreaking research in the life sciences attracted a growing list of world-famous scientists, which in turn attracted the next generation of talent from all over the world to study and work in Dundee. I will say something later about how we can make progress on that.
Dundee also has examples of collaborations. We have the BioDundee partnership, which is funded by Dundee City Council, Scottish Enterprise Tayside and the universities. There is also European funding. The partnership is unique and enables the public and private sectors in Dundee to create an environment in which the life sciences sector can grow and develop. I hope that the minister will comment on the BioDundee model and say whether he thinks something similar could be useful as part of a Scotland-wide strategy.
I speak in support of the Executive's motion in the context of my experience. My constituency of Dundee West houses the University of Dundee and the University of Abertay Dundee as well as the United Kingdom's fastest-growing biomedical cluster—one that has quadrupled in size in the past 10 years. Both universities have world-class reputations in life science research. The University of Dundee is the only top-ranking, 5* facility for teaching and research in Scotland, as well as being an international leader in diabetes and cancer research. It was voted the best scientific workplace in Europe. The University of Abertay Dundee has a growing reputation in environmental sciences and was recently rated in the top five in the discipline.
Dundee's reputation for research is very important to the city. When the First Minister and I visited the Wellcome Trust biocentre, postgraduate students from around the world told us that they were advised at their schools and universities to come to Dundee because of its reputation for international excellence.
There are also important economic benefits for Dundee. My figures are different from the minister's—I got mine from the University of Dundee; I do not know where he got his from. According to my figures, the biotechnology industry now accounts for 16 per cent of Dundee's economy. The University of Dundee has spun out 11 companies—including four in the past two years—and an amazing 20 are in development. Dundee is one of the few places where biotechnology is still rapidly expanding.
In 1971, there were no biotechnology or associated support companies in Dundee; now there are 39. The number of direct jobs has increased from 150 to, last year, 3,800. Indirect employment has increased from 450 to 11,400. There is also investment from the nine of the world's top 10 pharmaceutical companies that have contracts in Dundee. Anybody would agree that that is an enviable record.
There are too many things to go into detail on, but I will mention the Scottish Crop Research Institute. It is not in my constituency but it should be—if the Scottish Executive would agree to redraw the boundaries so that they are the ones that Dundee should have. We also have the life sciences intermediary technology institute, for which we welcomed the investment from the Scottish Executive. Other developments are in the offing, too.
All that and more is happening in Dundee in the life sciences. However, it is still not enough. As Murdo Fraser said, there is a proposal to set up a Scottish institute for life sciences in Dundee. The Minister for Enterprise and Lifelong Learning and the First Minister have been lobbied heavily on that proposal, but I am not aware of any final decision having been taken. The issue is too complicated for me to go into the details now, but I will say that meeting the Executive's key aims in its Scottish life sciences strategy would be facilitated by having a budget dedicated to the recruitment of outstanding scientists whose major remit is not to teach but to carry out fundamental research. I have been led to believe that the present set-up does not necessarily facilitate that. I do not want an answer today—because I probably would not get the answer that I want—but I would welcome the opportunity to meet the minister and his officials to discuss how we can make progress with the proposal, which would go a long way towards achieving the aims in the strategy.
I very much support the Scottish Executive's strategy for developing life sciences in Scotland. However, I hope that the minister will acknowledge that, without the contribution that Dundee makes to the sector, the performance of Scotland on the international stage would be somewhat less impressive than it is now. I hope that the tenacity and vision demonstrated by many organisations and individuals in Dundee over the past 10 years or so will be recognised in any funding and initiatives in the future.
In the Lothians, we are conscious of the life sciences as contributors to our understanding of the world and to the local economy. Life sciences in the Lothians also drive the national life sciences agenda and contribute to the national economy. It is right and proper that we should celebrate the successes, identify opportunities and debate Government policy on the issue. We have the institute for stem cell research at the University of Edinburgh, the Beatson Institute for Cancer Research in Glasgow, and, as we have heard, the Wellcome Trust biocentre in Dundee. In my speech, I will touch on the importance of life sciences to the future of Scotland's economy, the contribution from Scottish universities and the challenges facing our education sector.
The target set by the Barcelona summit in 2002 was for 3 per cent of gross domestic product to be spent on research and development and on innovation. The United Kingdom has set a target of increasing business and public investment in R and D from 1.9 per cent of GDP to 2.5 per cent—less than the Barcelona target—by 2014. We face major challenges. Only 2 per cent of the UK's 48 publicly quoted biotechnology companies are Scottish, which shows that we require more companies of significant size and scale in Scotland. We have a reputation for world-class research in life sciences, with one of Europe's most concentrated biotechnology clusters. In 2002-03, our higher education institutions filed 212 new patent applications—17 per cent of the UK total. We are punching above our weight, but the key issue is the development of that research and extending it into commercialisation.
I want to touch on the potential of our universities and on where we should be. In Finland, Sweden and Spain, more than one in six foreign students are engaged in highly theoretical advanced research programmes. Sir James Black, our only living Nobel laureate and chancellor of the University of Dundee, recently warned that low Government investment in science, combined with the mounting debts that students face, is threatening the future of scientific development. We must celebrate our successes, but we cannot be complacent.
I appeal to the minister to reflect on the challenges that foreign students face, particularly at the University of Edinburgh, in financing their studies. Will he ask the Home Office to address the issue of the increase in visa fees that is being imposed on our foreign students? That increase will deter foreign students; indeed, it is already deterring them. We want that fresh talent to study in Scotland, to stay here and to contribute to our collective future. We want investment—and we welcome the moves on that so far—but on the world stage Scotland has to compete not only with Europe, but with the big United States market. We must make major strides in order to do that. I am excited about the life sciences alliance and, like Alex Neil, about the ScotCHEM and SUPA provisions. The collaboration that the Scottish National Party has called for is starting to come to fruition. That is to be welcomed.
One of our biggest challenges lies in our schools. As much as we want to attract foreign students, we must also grow our own. I acknowledge that the Executive has recognised that in its science strategy and its overhaul of the science education curriculum, but science classes in Scotland are being cancelled because of a lack of equipment and increasingly stringent health and safety guidelines. I do not know about other members, but I remember with excitement the phosphorus glows when we had major experiments in our classroom. However, such activities have been unnecessarily restricted by over-stringent health and safety guidelines, which can put off students from what is an attractive area to study.
Only last week, a report by Her Majesty's Inspectorate of Education on improving science education for five to 14-year-olds stated that school science in Scotland is improving in some respects, but is failing to achieve its potential. Graham Donaldson stated that too many pupils leave school with little interest in science and insufficient awareness about its influence on their lives. Science and technology literacy is essential to modern citizenship. On the day that a report from Westminster talks about approving sex selection of embryos, we need a population that understands that science. We need a population that understands that technology.
The HMIE report also says:
"The lack of any national mechanism to deliver high quality professional updating to all science teachers is a major barrier".
We must acknowledge that primary 5 to secondary 2 is the real problem area in science education and I appeal to the minister to talk to his colleagues about the schools of ambition programme. If we are encouraging schools to specialise, which can be done in the comprehensive system, why not have a school specialising in science in Dundee? That would be a major step forward. The minister is asking everyone else to do things, but why did he not attend the European conference on recruitment into science, technology and mathematics in Finland last year when every other nation from the European Union was represented?
If science is the pursuit of truth and technology is the pursuit of control of the world around us, it is essential for our country's future development that we have people who are educated to understand the issues. We need the review of the science curriculum and updating for science teachers, but we also need changes to initial teacher training and technology education that is related to, but separate and distinct from, science education.
The future of life sciences is exciting and we need Scotland to flourish in that respect. We must improve and have firm foundations in education to sustain us and to ensure that we have the students, the ideas, the workforce and, most important, the informed citizens that are necessary for the development and commercialisation of projects in biosciences and life sciences.
Before I start, I apologise to you, Presiding Officer, and to members, because, although I would not normally leave a debate before it is finished, unfortunately today I have to go and sort out a problem in my constituency.
I welcome the debate, as it gives us an opportunity to put on record the excellent work that is going on in life sciences and to highlight the key role that they can make to the Scottish economy and to personal well-being. The life sciences impinge on every aspect of our national life, from what we eat and drink to how we are treated in hospital. They also define our values in sensitive and complex matters such as how we use animals in research, how we deal with embryonic cloning and how far we go in prolonging life. The life sciences cover a whole range of research, from Dolly the sheep to treatment for Alzheimer's, and the application of research. The industry is based in university departments and in private companies all over Scotland.
I am pleased that, in my constituency, there is already a thriving life sciences industry based near the new Edinburgh royal infirmary and the University of Edinburgh medical school and at the blood transfusion centre in Liberton. The industry can expand only with the development of a research complex to the south of the hospital. The new biomedical research complex is expected to place Edinburgh in the top 10 locations for biomedical research in the world. Around 30 spin-off companies and 100 business start-ups are expected to be created. As other members have said, 6,000 jobs will be created in the Edinburgh area and £500 million will be injected into the city's economy. That shows the real benefit that life sciences can bring to the Scottish economy.
The aim behind the new biomedical park is to allow commercial research to interact with academic expertise and clinical practice, with the goal of enhancing Scotland's standing as a leading centre of biomedical research. However, one troubling issue is the fact that the Executive has now ruled out any further money towards the tramline to the new biomedical park, which, arguably, would attract more custom than other parts of the tram network. That is partly the City of Edinburgh Council's fault in relying on a flawed congestion charge scheme, which voters in Edinburgh roundly rejected.
In advance of the debate, I was delighted to make contact with another huge international biosciences success story that is based in south Edinburgh. Alba Bioscience is part of the Scottish National Blood Transfusion Service and is based near Liberton hospital. It supplies diagnostic products to more than 30 countries and employs 60 staff after being in business for only five years. It is currently trying to break into the American, Japanese and Chinese markets, which should cause the company to grow even further and faster. I hope that the Deputy First Minister's recent trip to China can help the company and I shall be approaching him about that in due course.
Such companies are vital to the Scottish economy and I am pleased that the Executive is committed to developing them, which is where schemes such as the intermediary technology institutes come in. I hope that the ITI in life sciences will be able to stimulate commercialisation of research and help companies such as Alba Bioscience to get good research ideas into commercial production. As I said in my intervention on Alex Neil about the money that is available for such companies, the Scottish banks need to do more to help our industries and such new businesses and to provide better start-up opportunities. Competition from other countries and within the United Kingdom for such business always exists. We are fortunate that the conditions for growth have been met in the past decade, but we must ensure growth in the future.
I appeal for any development that we make in life sciences to be sustainable and to carry the people of Scotland with us. The precautionary principle must continue to be applied to ensure that developments now are not a burden on future generations. Many views in society are fuelled by the media, but many groups have concerns over issues such as human cloning and the use of animals for testing. The BBC showed a programme about that last night. Those views can be respected. Our life sciences industry must develop sustainably.
Like Jim Wallace, I welcome our first debate on life sciences and the life sciences industries, which are a key and growing part of the economy. I recognise what Jim Wallace said about the importance of a partnership approach. I will talk about that in terms of the development in Stirling.
The university sector, particularly its research excellence, is important. As has been mentioned, we do much better than our population and other features suggest that we ought to. My colleague Kate Maclean made good remarks about the work at the University of Dundee and how the city is developing as a centre for life sciences.
I agree with Fiona Hyslop of the SNP about the importance of science education throughout the whole system—in the primary, secondary and other sectors. I have met some of the people who are concerned with the new development at Stirling by IMI, for whom engineering is also important, and I agree with them that we should examine applied science and developments between science and engineering.
I was pleased to have the good news that IMI is establishing a new company—Stirling Medical Innovations—in the Stirling area. The site is in the Presiding Officer's constituency and is at the University of Stirling. I hope that George Reid does not mind my saying so much about it, but the company's effect on Stirling and its surrounding areas will be great.
A commitment of £30 million has been made to a new research and development programme and a product will be manufactured at the end. Many jobs—500—will accompany the new company, but what is good is the variety of jobs, of which we are told that 100 or slightly more will be in research and development, on the leading edge. That is good news.
Brian Monteith asked when the jobs will come on stream. I gather that the company has taken root in Stirling already—I think that it is located in or near the Stirling constituency—and that the new building that it will move into will be completed by summer 2006.
Members will recognise quickly how needed is the work that Stirling Medical Innovations will undertake. It will develop new near-patient and home-use diagnostic tests. As Jim Wallace said, those relate to cardiovascular problems. Clinicians and patients increasingly use near-patient tests for diagnostic work and management of conditions in patients' homes, so that patients do not need to make trips to hospital. As we know, cardiovascular disease is a major cause of ill health in Scotland. It is because of that, no doubt, that we have developed clinical expertise in the area, so everything is coming together nicely.
Stirling Medical Innovations is at the cutting edge and we hope that it will lead the world in developing products from its work. When I met its management team, I was delighted to hear how the partnership arrangements, which Jim Wallace talked about, have come together. Scottish Enterprise Forth Valley and Stirling Council have had prominent roles, as has the University of Stirling. The university may not have an established science base, but parts of it have strong partnership links with the new company. Representatives from Falkirk College were also present at the meeting.
I finish by stressing the importance of ventures such as Stirling Medical Innovations, not only in improving health but, as was said at the beginning of the debate, because of the increased quantity and range of jobs that they provide and because of their input into research and development, an area in which we have been seeking improvements for many years. Alex Neil said that we have a good track record in our discoveries at the university level but that we now need to take the research and development and move it into manufacturing. I hope that that is what is happening. The new investment in Stirling is welcome not only for my constituency, but for the Forth valley and for Scotland more generally.
I endorse the comments that Murdo Fraser and other members have made about the life sciences sector. Scientists such as Professor Hillman of the Scottish Crop Research Institute near Dundee have shown how an outstanding international reputation can be developed. I believe that there is undoubtedly a consensus in the Parliament in applauding the life sciences, but there is a need for caution. In considering the Executive's strategy, we require a degree of what might be considered a Scottish trait: a genuine, unpartisan scientific scepticism. That is not to say that I do not wish the sector well—I do. However, I believe that the current strength in Scotland's life sciences is nothing to do with past Government strategies and everything to do with hard work and risk taking by universities, commercial researchers and venture capitalists.
I welcome the announcement of the new jobs that will come to Stirling through the £30 million investment by the Executive and the £38 million matched investment by Inverness Medical Innovations of Massachusetts. However, the new jobs are not immediate and I am simply asking questions to which I am interested to know the answers. What will happen if the company's research proves fruitless? How long will it take for the research to gain the necessary approvals? Those are fair questions, given the public investment in the company, and any member from any party would seek to find answers to them in order to get a better perspective on when jobs will feed into the system in the Stirling area. The 100 high-quality jobs in research are to be welcomed but, if that is all that there is, members must be cognisant of the fact that that means a public investment of some £300,000 per job. That is a great deal of money.
Is the member's £300,000 estimate before or after tax? If we have 100 well-qualified people earning substantial salaries, they will contribute enormously to the local and national economies. Surely the development is, at least potentially, a far better deal than the white elephant that the Tories invested in at Clydebank.
I was trying not to be partisan. The point that I was trying to make is that we might want to begin to compare the costs of jobs and the results that one gets, including tax revenues. Those people will certainly be paying taxes—indeed, if we are to believe what the Deputy Minister for Enterprise and Lifelong Learning said yesterday, they will be paying more taxes. It is fair to ask whether we are making the right sort of investment if everything that is pumped and promoted so heavily does not deliver.
When I hear the minister talk about life sciences using words and phrases such as "strategy", "joined-up government" and "the global marketplace", I am reminded of all the ambitious programmes that previous Administrations, of all political hues and colours, have undertaken to support manufacturing, whether of cars at Linwood, of semiconductors at Bathgate or indeed of nothing at Halbeath, where Hyundai did not turn up—that was under a Conservative Government. I say that to illustrate in a non-partisan manner the point that we can be sold the idea that certain strategies are the way forward only to find that the crock of gold is not at the end of the rainbow.
It is important that we ask questions in the Parliament. I am not saying that ministers will be able to answer them immediately, but the fact that we are asking them means that it is incumbent on the Executive to have a plan B and a fallback position. It is only right that politicians press the Government in that regard. Many Governments have said that they are not in the business of backing winners only to prove it by showing that they back losers. I hope that the Executive can avoid that.
When Murdo Fraser talked about tax, he said that we need joined-up government. It is clear that we need a joined-up coalition—this is the partisan part of the speech. We need taxes that are coherent and predictable. We need a coalition in which the partners are competing to cut taxes, not to raise them—a policy on which Mike Russell now agrees with me, for which Scotland is all the better. I support my colleague Murdo Fraser's amendment and look forward to hearing more probing questions about the strategy in the debate.
I am delighted that the Executive has elected to debate this matter. I do not share Brian Monteith's scepticism, because I firmly support the Executive's policy and strategy on Scottish life sciences. Developing Scotland's life sciences industry must be a key priority for the Executive. Over the coming years, the research and development that is carried out by Scotland's life sciences community can have an almost immeasurable effect on the health of people in Scotland and beyond. Our challenge as politicians is to create an environment in which life scientists can flourish.
It would seem that we have a unique opportunity to establish Scotland as one of the leading life sciences nations. As members have said, we have an impressive track record, which is underpinned by an academic base that is second to none. We have heard from my colleague Kate Maclean and others about the work that is being done in Dundee and Stirling in particular.
In Glasgow, the three universities are all providing excellent research to maintain the city's reputation for bioscience excellence. By combining previously disparate departments, they are driving forward research in this crucial area. The University of Glasgow is the largest science-based university in the UK outside London and has one of the biggest medical schools in Europe. By collaborating with other universities, it provides a critical mass of opportunity in life sciences that was not attainable previously. For example, PharmaLinks—the new gateway to the combined biomedical strengths of the University of Glasgow and the University of Strathclyde—is providing the pharmaceutical industry with direct access to a wealth of new opportunities for therapeutic targets, drug candidates and drug delivery.
In 1994, the University of Glasgow's 11 specialist scientific departments merged into a single institute of biomedical and life sciences. That merger has created a focal point for research, technology and teaching in a host of disciplines. With the creation of that unified department, the university can support large-scale research initiatives and interact much more effectively with industry, commerce and the public sector—the sort of collaborative work that we read about in the strategy.
That is an impressive track record, which shows the Executive's clear commitment to supporting the industry, and the time is now right for Scotland to forge ahead in the life sciences. If the Scottish Executive can provide genuine leadership and support to the industry, we can establish Scotland as a leader in the field. What an opportunity that is.
Advances in life sciences, biotechnology, diagnostics and pharmaceuticals can help us to detect, treat, prevent and even cure diseases. As we have heard, we have a good story to tell on that. Scotland has been at the forefront of the industry for many years, but we can do more. I have worked in medical research, which is an area that allows the extensive clinical expertise that exists in Scotland to be showcased. More important, it provides a well-documented patient population from which crucial medical advances can be made.
The strategy talks about the need to attract more young people to careers in the life sciences; obviously, that is crucial to maintaining and developing the industry. It is imperative that we continue to do that, and the fresh talent initiative will help in that regard. The Executive has provided significant new investment in school science education over the past three years, and it has invested in programmes such as the Scottish space school foundation and the Scottish schools equipment research centre. One of the best ways in which we can encourage young people to follow a career in this discipline is by talking up the industry. If we are able to inform our young people that a career in Scottish life sciences would be a diverse career in a truly world-class industry, we could attract many highly skilled students.
The strategy highlights the need to bring to Scotland people and companies that are looking for a place to succeed. Kate Maclean mentioned the importance of people. I firmly believe that this afternoon's announcement on the long-awaited M74 extension will go a long way towards making Scotland a more attractive and competitive option for businesses—something that is necessary for the collaboration that we have heard so much about today.
The challenge for the Scottish Executive is to ensure that life sciences throughout Scotland are allowed to flourish in an environment that encourages them to work in collaboration. The strides that are being made in Glasgow are testament to the increased benefits of collaborative working. That is why the creation of a life sciences alliance is one of the most important developments in support for the life sciences in recent times. There is much to be proud of, but much to be done. I encourage the Executive to maintain its drive on the issue and I support the motion in the minister's name.
I will take a slightly different tack from that which has been taken by my colleagues around the chamber and look a little wider. Scotland has a proud and long record in the life sciences. Edinburgh, in particular, became one of the leading centres—if not the leading centre—in Europe for the study of medicine. The reason for that was the specific local "asset"—ill health, or morbidity, made the old town of Edinburgh an excellent area for scientists and doctors to study, to test whether their remedies could deliver for the community.
That opens up an important area of interest. Just as we had, in the past, that pool of morbidity for a medical school, we now have for the future an enormous pool of knowledge in Scotland, which we are under-exploiting. We have a community that is genetically diverse, so we have a wide range of people who can be part of the community that participates in the developing and testing of new drugs. We also have one of the best-documented genealogical systems in the developed world. Our register of births, deaths and marriages records more information about both the mother and the father than is recorded even today south of the border. That is an important way in which we can create a database of information that may or may not be used in vivo—as distinct from in the computer—to support the life sciences. It is a priceless resource that very few countries have.
Yesterday we had an interesting debate on entrepreneurship, albeit that there was no motion for debate and perhaps a slightly uncertain purpose. Today we are touching on that vital subject again. The support for universities and the additional funding that the minister has adumbrated are terrific, because our universities are the intellectual engine of an important part of our future economy. However, that pool of information about our community and that intellectual engine are but two legs of a three-legged stool. They are not in themselves sufficient.
The Government's "Scottish Life Sciences Strategy" document makes reference to the disconnection between the financial community and the life sciences community. I agree that there is little connection. However, that might be based on something of a misunderstanding of the nature of our financial community. Our clearing bank system is highly developed, experienced, effective and world class, but it exists to support mature enterprises; it does not exist inherently—even through business and corporate banking—to do other than support mature enterprises. At the other end of the scale are start-ups, which are relatively well supported by our enterprise network. If start-ups can sell their idea to the enterprise network—if they cannot do that, they will not be able to sell their developed product to anyone—they are probably in with a semi-decent shout of getting some seedcorn money to get on with the job.
In the middle, frankly, there is a muddle. Scotland is far from alone in that. There are successful entrepreneurs who make their way through that muddle; they might get access to funds informally, or they might be more successful in persuading people to take risks. There is not enough support for businesses in the middle. That is not because of a lack of venture capitalists, because they do not always suit all our enterprises. Too many of our ideas falter after the idea has been proven by use of seedcorn funding, but before it has developed into something that can be delivered. We must examine that area.
Alex Neil referred, properly, to the need to fail. Oil companies demonstrate that very well—they strike oil by drilling enough dry wells. In other words, we must follow through on the things that we do not know will succeed so that we can find some that do succeed. When I worked in banking for 30 years, one of the dreadful things that used to happen to my colleagues in the branch network was that inspectors would appear periodically to look at the branch's books. If there was no bad debt on the books, the branch manager was relieved of his post immediately. If he had no bad debt, he was not taking sufficient risk in supporting his customers. The same must be true of us. We must have courage and ambition, and we must be prepared to allow for failure, but we must also be geared to learning from failure.
One of the interesting things about life sciences is that, compared with other scientific areas, the discipline is comparatively accessible to the broader non-scientific public. People can see the benefit that the life sciences deliver to human beings, whereas it is difficult for them to see the benefits of sub-atomic research with its quarks, mesons, charm, spin, charge and mass, all of which are only mathematical concepts. It is very different with the life sciences.
I will highlight some of the areas of the Government's document that the minister might want to consider further. On page 14, there are six objectives; I like that. However, only indicators are shown rather than something that would enable us to measure and manage the way forward. On page 18, there are 11 milestones, which give the dates by which the tasks will be undertaken. However, if we do not say how we will measure or how we will know that we have achieved what we set out to achieve, we will find it difficult to help the minister to help Scotland in that area. I encourage the minister to consider the subject further.
Some money can be made from having ideas in Scotland. Some money can be made from manufacturing, consequent on our developing those ideas, but our future is not likely to be in mass market manufacture. Once the manufacturing process is established and understood, international competition is likely to undercut us—competition is very fierce. The key for us is to occupy the middle ground of turning ideas into intellectual property, which is the process by which manufacture can take place in the future. We must retain control of intellectual property. We may need to have hunters who travel the world to find other people's ideas that are under-exploited. We will then become a centre that is known for turning ideas into products and which will attract more people here. The trick is not to discover or invent—it is to discover again when the time is right.
There is no doubt but that Scotland has a genuine claim to be a world leader in life sciences. Our small country has always provided a disproportionate number of scientists and engineers, who export knowledge and scientific enterprise around the world. Equally, there is no doubt that Scotland's economy benefits from activity in the sector. The Scottish Enterprise website lists the number of companies and employees in life sciences. More than 25,000 people are directly employed in the sector, and presumably there is a great deal more indirect employment.
The establishment of the ITI in life sciences in Dundee was a welcome initiative, not least because it spread the opportunities for huge potential economic benefit beyond the central belt. The institute has put Dundee on the world map as a centre of excellence in medical science, in particular. My daughter-in-law works in a small spin-out company that was developed from the work of a group of scientists at the University of Dundee. It is an innovative project, which makes human liver enzymes for use in the pharmaceutical industry and provides a more focused system for testing new drugs, with the important added element of reducing the use of animals in such tests. The company markets its products around the world and is planning expansion from its present five-employee site. However, that expansion has been slowed considerably by the bureaucracy that has been imposed on the company. That situation is regrettable, because it does not send out the positive messages of support and assistance that we should aspire to give.
During the debate on science and the Parliament last November, my colleague Patrick Harvie stated that Greens are routinely portrayed as being anti-science. We are not anti-science—we seek to be informed by scientific evidence on a wide range of issues. However, perhaps our view is more holistic than is usual. It is understandable to want to encourage high-tech enterprises, which have much to offer. However, such support must not be given at the expense of more traditional, lower-tech alternatives. If organic farming received even a small fraction of the funding that is poured into agricultural biotechnology, the sector would be transformed.
There appear to be elements in the scientific community that believe that, because something is possible, it must be desirable—science for its own sake. We Greens will never take that view. We prefer to take into account the moral, ethical, social and cultural factors before approving a technology. That explains our opposition to genetically modified crops. The technology is very clever, but the costs to the environment and human health are currently far greater than the benefits. Consumers seem to agree with us. Our attitude to medical biotechnology is different. The potential benefits to human health and the controlled nature of the science make it a very different proposition from fields of GM oil-seed rape scattering pollen to the four winds.
However, life scientists must never lose sight of ethical considerations. In that respect, the news this morning that a committee of MPs has recommended the disbanding of the Human Fertility and Embryology Authority and its replacement with a weaker regulatory body is cause for concern. Although we welcome a debate about the increased use of life sciences in the treatment of fertility and other conditions, there is no case for a knee-jerk relaxation in the regulation of experiments on human embryos and other life forms. The message is one of balance. It is up to society to determine the extent to which life scientists should apply their science to people's lives. As Albert Einstein said:
"we should be on our guard not to overestimate science and scientific methods when it is a question of human problems; and we should not assume that experts are the only ones who have a right to express themselves".
It is very fashionable to talk about the knowledge economy. Indeed, the nation's scribes, who have abandoned us today, have been known to deride us, the politicians, for using exactly that sort of jargon. Of course, life sciences are the pre-eminent example of the knowledge economy, because economic growth that is created through the exploitation of knowledge is what that economy is all about.
As Shiona Baird and many other members have mentioned, Scotland has a strong history in life sciences. Indeed, penicillin, antiseptics, anaesthesia and Dolly the sheep were all created here. Moreover, as Murdo Fraser—when he was in the chamber—pointed out, that inventiveness continues today. For example, a fifth of the 5* departments in Scotland's universities are in the life science field. The challenge in recent years has been how we play to that strength because, as others have pointed out, such inventiveness has in the past brought Scotland too little commercial benefit.
The Scottish Executive has scored some major successes in that respect and I pay tribute to it for creating that pipeline of support for companies. First, the proof of concept fund was introduced to allow academics to test their ideas; then, as the minister said, we had the small firms merit awards for research and technology and the support for products under research awards; and now there is the major success story of the co-investment fund, which allows groups of private angel investors such as the ArchAngel network to invest 40 per cent of their funds in the life science companies in their portfolio. Moreover, we heard today about new support for the fund of funds, which will provide up to £5 million of capital to finance the early-financing needs of life science companies before they need to move into the venture capital field. Of course, the ITI in life sciences is attracting global recognition for its work. That said, if it were all so simple, one wonders why it did not happen under a previous or different Administration.
Will the member give way?
Yes, indeed. I am happy to take an intervention.
Is it not the case that Scottish Enterprise has developed that train of measures over the past 10 or 15 years and enjoyed Conservative support even after the baton of power was handed over? Indeed, I worked as a consultant with Scottish Enterprise on the very commercialisation projects that led to some of the initiatives that the member has mentioned.
It is fair to say that the proof of concept fund was being thought about in 1997. However, I can say without a shadow of a doubt that the ITIs, the co-investment fund and the fund of funds were not being developed when the Conservatives were in power. Indeed, I find it all the more extraordinary that their current manifesto pledges to cut the Scottish Enterprise budget by £250 million, which would more than halve it.
Cash is not the key to the future in life sciences. Scotland has long had the ideas for success, and the Executive has made huge strides in creating the infrastructure for such success. However, the challenge is how we help to create a society in which the life sciences can flourish.
I want to pick up on some things that Shiona Baird said from a rather different perspective. She was right to say that we need look no further than today's headlines on the disputed report on fertility regulations to feel the fear that exists out there. Creating a society in which success in the life sciences is possible is the next challenge for Scotland, and that challenge is much more important than the more pedestrian recipes that we have heard about today.
I turn to Shiona Baird's theme of ethics and morals. The big picture in life sciences is that biotechnology is democratising in exactly the same way that computing technology has democratised over the past 30 years. In the United States, a DNA testing kit can be bought for $70. Such democratisation compels us to think through how we should handle a science that has been developed not to do bad things to people, but to do good things to them—indeed, it has been developed to enhance the human potential.
We should consider what is happening in the world of sport or what happens when elderly people want to hang on to their youth. There is an infinite and near-reckless demand for things that will make us better and smarter and for things that will make us live longer. Today's row about fertility regulations highlights what lies ahead in our having to decide what it means to be human. Enormous ethical issues are involved and the limits that we might put on developments must be decided, but dealing with science's dilemmas will determine where life sciences companies will invest and grow in the future. In the past 12 months, there have been attacks on scientists elsewhere in the UK from some of the Greens' fellow travellers, a ban on stem cell research in the United States and today's splits at Westminster. We must think differently about what constitutes a society in which life sciences can prosper in the future.
Scotland has much to offer to the debate. It could accommodate the best civil dialogue on the ethics of the new science. What happens in the field in the next decade will define which areas of the world are at the cutting edge of tomorrow's knowledge economy. Scotland has a real contribution to make in leading a dialogue about the place of the life sciences in our society. That debate is a debate for politicians because, contrary to what Shiona Baird said, the decision that was advocated by the Westminster committee was about separating the technical regulation of fertility clinics from the much more fundamental societal choices about what is, and is not, appropriate for enhancing the human potential. Those are questions not only for politicians at Westminster, but for politicians in the Scottish Parliament and for people in this society. We have led on inventiveness for a long time and the Executive has led on creating the right environment for support for a decade. It is now time for us to lead a civic dialogue on the place of life sciences in the future.
There have been points at which I thought that this first debate in Parliament on the life sciences was in danger of becoming the Dundee debate. There have been constant references to Dundee—even Alex Neil claimed a tenuous link with Dundee, not so much through the life sciences as through counting and adding up big sums.
I was born and brought up across the River Tay. When I was young, I was told that Dundee was the city of jam, jute and journalism. Kate Maclean, Shiona Baird and other members talked about the scale of the former industrial city's transformation, which we should not only welcome, but learn from. We should learn that the main trigger for the change was the academic base that put life sciences at the top of the agenda in Dundee.
We found out that Dundee attracts world-class scientists who, in turn, attract top research workers. Research work is then spun out to businesses, which get support from Government. As the minister pointed out in his opening speech, it is all about partnership, which is how Dundee has been successful. Dundee is not the only place where there are such clusters; there are similar clusters close to our other universities. The Pentland science park, where Dolly the sheep was created, is part of such a cluster.
Alex Neil was right to stress the dangers of the vulture culture, whereby the carrion gather whenever a company goes belly up. The unfortunate reality is that cutting-edge companies are high risk. I am pleased that the SNP will not be among the crows in the trees when such an event happens next.
Life was not easy for scientists in the UK in the final decades of the 20th century. As several members mentioned, scientists faced pressure from increased regulation and they continue to face pressure from groups that do not believe in the progress of science. I include in that category the Greens who, in general, have a luddite attitude to science. We should not unthinkingly support all science, but we need to create a socioeconomic situation in which we can ensure that Scotland is again at the forefront of innovation. I think that Parliament has spoken in favour of that today.
Three months ago, I found it interesting to read in the Financial Times "fDi" magazine that Scotland had been named as the European region of the future. The citation for the award specifically mentioned how Scotland had
"successfully targeted high-value-added sectors, such as microelectronics, financial services and life sciences."
That is a wonderfully positive note on which to end what has been a harmonious debate, in spite of the fact that Murdo Fraser insisted on bringing up local income tax. I do not know why he did that; he must have been filling in a gap.
I had not intended to participate in the debate; therefore, in doing so I am on a learning curve.
The debate has been most enlightening and the degree of consensus among all parties is a credit to Parliament. Many of the points that have been made—some of which have been contrasting—are worthy of future consideration. I welcome Shiona Baird's thoughtful comments, which contrasted well with those of Wendy Alexander. Their speeches allowed us to hear two sides of the argument. Of course it is important to consider the ethical and moral issues, but at the same time we should not put brakes on our scientists, who have achieved so much for our society over many years. Shiona Baird took a balanced approach, which I go along with. Today's debate is unique in that Shiona Baird and I agree almost all the way along the line.
The debate has been buoyant because Scotland has done well in the life sciences. There is much that we can be proud of and that we can boast about and I am not talking only about the past five or six years; I am going back much further than that. We should all be proud of our country's achievements.
However, we must take as warnings some of the issues that have been raised today. I think that it was Fiona Hyslop who raised Professor Black's concerns about youngsters who go through university. The percentage of graduates in Scotland is very high in UK terms, but not enough of them are following the science trail. As Murdo Fraser demonstrated, although the position of Scotland in that regard compares well with that of the UK as a whole, if we look further afield to western Europe and the USA, we find that the minister might have to address the issue in the future. The matter is one in which the Government can offer input but, that said, members throughout the chamber recognise that the private sector is all important in the life sciences.
Does the member share my concern about the dramatically reducing number of mathematics teachers in our secondary schools? Science in all its forms is difficult to understand unless one has the necessary skills of arithmetic, mathematics and statistical analysis.
Yes—there is no doubt that there is a problem in that respect. One of my concerns about the education system is that fewer students are studying maths these days.
Shiona Baird introduced an important word—"engineer"—into the debate, although I may be biased on the issue. We need to face the fact that engineers play an all-important role in the world of science. Engineers back up scientists and provide the hardware without which scientists could not undertake experiments or other processes that they wish to carry out.
Does Phil Gallie acknowledge that the study of technology may be the vital bridge between science and maths education at school and the study of engineering at university and which would encourage engineering students in the future?
Yes—I certainly acknowledge that. As far as I am aware, the idea is one that my party is concerned to support. We want far more people to study technology than is the case today: we want them to choose technology over the other subjects that seem to prevail in our education system.
I have made sufficient points on the subject of education, so I will not continue further down that road. Given the number of comments that were made about Dundee today and some of the other parochial remarks that have been made, I ask Parliament to forgive me for raising an issue that is dear to my heart; of course, it is the Hannah Research Institute in Ayrshire, which has been a centre of agricultural research excellence for 70 years and more. Nowadays, the institute is under pressure because of different requirements in agriculture. High-calibre research scientists are leaving the site because there is no funding to support them.
We have talked a lot today about the need to take a joined-up approach to the life sciences. I agree entirely with that, but there seems to be a lack of joined-up thinking in respect of the Hannah institute. The point that I want to make is that there are aspects of its research programme that could be of benefit to the life sciences industry. The level of research expertise at the Hannah in diabetes, obesity and breast cancer, for example, could have a major impact. Because the Hannah Research Institute was established in the agricultural landscape of the country and is funded under SEERAD, it seems that there is no way of linking its work to other health research. We need joined-up thinking.
I draw the member's attention to a report that the Enterprise and Lifelong Learning Committee produced two years ago when the idea was floated that the Hannah Research Institute and other such bodies in the agricultural sector should be brought within the remit of the funding councils instead of being funded directly by SEERAD. If that had happened, the threat to the Hannah would not be as great as it is today.
Once again, I agree. The present short-term funding options are not suitable for the type of research that the Hannah Research Institute undertakes.
Having mentioned the Hannah and knowing that Cathy Jamieson has also mentioned it on behalf of her constituents, I have great hopes that ministers will take on board the representations that have been made and that they will consider making changes in the future.
I turn to a point that Jim Wallace made on drug development and I point to the great success of the Scottish pharmaceutical industry over the years. All too often, that industry is subjected to unfair comment with respect to the price of drugs. We all forget just how much research goes into the development of drugs. We also forget that, for every drug that is seen to be a success, time has probably been spent on another 20 that have ended up in the bin.
I would have liked to speak about the comments of other members—one point that Alex Neil made is worthy of comment in particular. His initial point—
Could you hurry please, Mr Gallie?
I will. Alex Neil spoke about risk and failure. It is important that we acknowledge that the life sciences are a risk industry, so we should not regard it as a failure every time a product goes down the tubes.
On a point of order, Presiding Officer. Could you take the opportunity to remind members, perhaps at decision time, that it is appropriate for members to remain in the chamber to hear the closing speeches in a debate? I know that Mike Pringle gave notice of the reason why he could not be here now, but at least three other members who participated in the debate are no longer here for the final speeches. Although we cannot all be life sciences anoraks, I think that it would be respectful if members returned to the chamber for the close of the debate.
As members are aware, we monitor the absence of members during closing speeches. We tend to have a word, rather than make announcements from the chair. I accept your point.
I call Jim Mather to close for the SNP. Mr Mather, you are due seven minutes, but you have a couple of minutes' latitude—although perhaps not as much as before Ms Hyslop's point of order.
Jim Wallace started by painting a positive picture, which I recognise and applaud, and the debate has been useful and informative. It has shown and showcased real strength in the life sciences in Scotland. The fact that we have a strong life sciences sector is a given, but we need to ensure that it remains really strong. Although there are other wonderful strong sectors in the Scottish portfolio, they exist in quite a narrow range. Beyond oil and gas, banking, financial services, electricity, transport and beverages, there is not a lot. Our strong life sciences sector, with its good track record, is very welcome, especially if it can lever in its strong academic reputation. If Scotland's reputation for integrity can be levered into the life sciences, that could play very strongly and would be a real ace in our hands in the years to come.
I was taken by Brian Monteith's comments about the investment at SMI in Stirling and I sympathise with some of his concerns. We must monitor that situation and investment there must be part and parcel of an on-going process. In the past, there has been what I would describe as lean foreign direct inward investment in manufacturing, so it would be a source of genuine regret if we also ended up with lean research and development, with Scotland not getting as much residual benefit as might otherwise be the case.
I am keen that we monitor the cost of investments that are made and that we monitor intellectual property rights and ownership and the royalty income that emanates from that over time. We should also focus on helping to create small Scottish companies in our universities. They could start as little nuclei of research and development, but they will be in a good position to make deals with the big players.
We should consider what is happening in other parts of the world. In Utah, the problem of investment being mobile and leaving the state is being overcome through a not-for-profit approach, which allows investment to remain and to be rooted, perhaps with profit-making entities downstream. At least there is a root in place.
Our party recognises the positive need to work with the big players; there is acknowledged benefit in that. The lack of independent big players in Scotland is the stuff of our amendment, and we need to address that issue in the longer term. Having big allies is key to getting to the market, and to moving on. Much more important, that would break the cycle that we have seen in Scotland in the past. In the absence of big allies, we have typically built and designed technologies and then attempted to sell them, but that approach can be difficult. Now, we have the ability to turn that polarity around and get into a position to sell and design technologies with the big players, with products being built and sold in Scotland.
That leads me on to Brian Monteith's concern about the lack of manufacturing jobs. That is a legitimate concern that we need to monitor because, in the absence of a virtuous circle in which the tax revenues from such employees and the value added tax from the companies come to a Scottish exchequer, we need to be very careful with the pennies.
We also need to monitor what we are doing with great care and openness because that feeds into the benchmarking process. I want us to monitor the cost of investment per R and D job and per manufacturing job. I would like us to benchmark what we are paying against what is paid in other jurisdictions because we are not alone in our aspirations to move towards the life sciences—everyone wants to do that.
That leads me back again to the SNP amendment, which is practical and sensible and aims to retain and to root for the long term much more of our wealth. The constraints that we currently face on investment in the lower levels of research and development and on spending are clearly connected to the lack of headquarters in Scotland and to the lack of critical mass of venture capitalists. As members know from my repeated speeches, I believe fundamentally that a different tax regime in Scotland would make all the difference and would give us that rooting compound, along with other things that we could do in the short term on business and water rates, as well as the not-for-profit organisations that I mentioned.
It was a delight to hear Murdo Fraser echo the need for tax breaks and the recognition of the positive impact of a lower rate of corporation tax that is not relative to the rest of the UK. However, Murdo Fraser is not yet in a total state of grace.
We have heard a lot from Jim Mather about corporation tax, which is very interesting. Will he share with us the SNP's proposals for personal taxation?
We cannot build Rome in a day, but the idea is this: we are going to have a competitive Scotland and the SNP is committed to doing all that is required to create a competitive Scotland. We need to be competitive.
We have heard positive announcements today that will push us in a good direction. However, not only are neighbours far and wide—Norway, Singapore and America—involved in the life sciences, our neighbours in Ireland are, too. They have been in the slow lane until now with not such a strong academic base or track record in the life sciences, and with fewer skills and less momentum than we have. We have to remember that their international financial services centre was not even on the radar of our financial services sector just 10 or 12 years ago, but now they are moving forward. We have to consider what they are doing and what they are doing differently. I could focus on the fact that the Irish are able to offer people 12.5 per cent corporation tax, but I will not dwell on that today.
The Irish have taken a much more objective view of eight key conditions, not all of which they or we currently meet fully, but the objectivity and focus that they apply are admirable. I encourage the minister to emulate that approach; I will happily copy to him the material that we have on that subject.
I want us to do as much as we can as meaningfully as possible. I want us to monitor and undertake the annual reporting that is referred to on page 14 of the strategy document and it must be adopted in a structured way with much better measurements. One measurement that was referred to almost offended me: we are to monitor the number and quality of foreign direct inward investments. I would rather have us manage and monitor the number and value of foreign direct inward investments year on year.
I would also like us to monitor better the graduates and talent that Scotland produces, including indigenous talent and people who come here to learn their skills. One of the successes of Ireland was that when it won the Intel deal, it did so with virtually no electronics engineers. Instead, they put the word out through a database and in that way got in the engineers to meet their requirements. If we produce such skills and do not retain that talent in the short term, we must have their postcodes so that we can follow them up in the long term.
Through our amendment, we aim to create a climate in which the life sciences can prosper and become rooted firmly in Scotland and we aim to enhance our potential and our contribution to the worldwide common good. All other countries are trying to achieve those objectives. However, every other country that competes with us has the full range of powers that mean that their contribution can be infinitely open-ended and more likely to encourage retention of skills and wealth. We need to learn those lessons. I support the SNP amendment.
I call Allan Wilson to wind up the debate. You can have about 14 minutes, minister.
Excellent stuff.
We have had an excellent debate on a subject that probably all members agree will play a key role in determining Scotland's economic and social future. Our smart, successful Scotland strategy highlights the need to raise our long-term growth rate if we are to achieve our broader economic and social objectives. Again, I think that all members would agree that the life sciences sector is one of the key sectors that can help us to deliver on that ambition.
As we heard, principally from Jim Wallace but also from other members, we have an impressive track record. We have an internationally recognised science base from which world-class research is being developed through the creativity and enterprise of our people—a subject that we debated in Parliament only yesterday. Our research base provides the foundation for commercial success through new and established businesses, helps to attract leading international skills and investment, including international investment, as we heard, and puts Scotland firmly on the life sciences global map, in the global economy in which we compete.
As the life sciences strategy says, we must be "ambitious yet realistic" and we must
"capitalise to the full on the spirit of co-operation, networking and partnership"
that makes Scotland stand out from the rest of the global competition. In that context, we have real benefits of scale and connectivity, which we must use to our advantage. The strategy seeks to do that.
However, growing the economy is like growing a business—if Brian Monteith were still in the chamber I would debate the point with him. It is not just about whether the statistical indicators point in the right direction; it is about focus, building on our strengths, people—as Kate Maclean said—jobs in a real, not imagined, economy and the overall contribution of businesses to growth. The strategy mentions those factors under the heading, "Achieving Critical Mass for Sustainable Growth".
In response to Brian Monteith's direct questions, I acknowledge that there is an understandable need to balance resources against opportunity and to take account of risk, to ensure that we can capitalise on the opportunities that we all acknowledge exist. The strategy identifies four vital and interrelated factors on which achieving critical mass depends: the right people; the right resources; focus; and—I suspect, most important—collaboration across the sector.
Contrary to what Jim Mather said, we can draw advantages from our position in the United Kingdom. The Scottish Executive does not control the global factors that have such a bearing on the open, trading, global economy; neither does it control the key fiscal and monetary macroeconomic levers by which Jim Mather puts so much store. However, we benefit from those levers.
It was pointed out that 17 per cent of UK patents are raised in Scotland, whereas only 5 per cent are commercialised here. Why does the minister think that that gap exists?
There will be a plethora of reasons why an individual patent might never reach commercialisation. My good friend Murdo Fraser referred to venture capitalism and access to funds to let good ideas develop and become commercial. Such funding can help, but he failed to welcome our announcement of £40 million of further co-investment finance to encourage the private sector to take the risks that we would want it to take in areas of development.
Does the minister agree that nothing would do more to deter venture capitalists than to increase the top rate of tax by 10 per cent?
I can think of a range of things that would deter venture capitalists from investing in this economy. The principal one is probably the return of a Tory Government. Thankfully, that is not on the cards.
We benefit from the stable macroeconomic environment in the UK. Mr Mather again mentioned Ireland in support of his contentions but, as I said only yesterday, figures from the Organisation for Economic Co-operation and Development show that the UK business tax burden is below that of Ireland. Therefore, Mr Mather's argument is unsustainable.
We have had a sustained period of low inflation that supports business competitiveness and allows greater certainty for the range of business decisions. That would be at risk were a Conservative Government to return. We provide low levels of interest rates—half the level that prevailed during the period of Tory government—which reduces the cost of borrowing in the business and personal sectors. The cost of borrowing is half the level that prevailed during the Tory years.
As I have said, we provide favourable levels of corporate taxation. We also provide well-defined fiscal rules. The nationalists do not even have a fiscal or monetary policy so that we might compare it to ours.
The minister refers to the economic position during the period of Conservative government. Does he recall Mr Blair going to the Council of Ministers in Amsterdam in 1997 and boasting of the strongest economy in Europe? Does the minister think that that will still be the case in a few years' time, given the high percentage of public expenditure against GDP that is being encouraged by this Government?
I believe that Mr Blair will be the Prime Minister for the foreseeable future and, yes, that the economy will continue to grow and prosper under the astute stewardship of the Chancellor of the Exchequer. The chancellor's budget builds on our strengths and ensures that we can base our microeconomic policies on a robust macroeconomic foundation.
The Scottish economy has performed well recently. We have GDP growth over the year to the third quarter of 2004 of 1.8 per cent, and our most recent quarterly growth rate of 0.9 per cent is above that of the UK as a whole.
Will the minister take an intervention?
If Alex Neil does not mind, I want to make some more references to what has been said in the debate, rather than go back over yesterday's territory.
Murdo Fraser made some criticisms—as does his amendment—of the financial contribution to the sector. However, we heard from Wendy Alexander—very succinctly—about investment over the years. We have had the proof of concept fund, the SMART scheme, SPUR, SPUR plus and, of course, the Scottish co-investment fund to which I have referred. All of those have been crucial in stimulating and supporting a wide range of early-stage life science investments of up to £2 million. Of the 62 investments concluded to date, 16 have been in life sciences, leveraging in more than £9 million for those companies.
Murdo Fraser quoted an anonymous source—I have no idea who it was—saying that the consultation was too rushed and not comprehensive enough. I am reliably informed by my colleague Jim Wallace, who was in charge of the process, that he was being told by the industry at the time not that we were being too hasty in developing our strategy but that we were not being hasty enough. Furthermore, I have seen a list of those who were invited to participate in the consultation and I do not see any prominent academics in the life sciences industry missing from that list.
As Wendy Alexander correctly commented, we are being successful in accessing UK funding. Stem Cell Sciences, for example, led a winning bid to the Department of Trade and Industry's competitive technology strategy fund and secured £1.75 million for a project to develop a resource for high-throughput screening. That is a classic example of the benefits that are to be gleaned from a UK-wide approach.
I do not agree with Phil Gallie's assessment of Shiona Baird's contribution, which I thought was anti-science in some respects in its prejudice against a particular form of technology. We support the science base and we cannot pick and choose from within it. The longer-term potential of GM technology should not be dismissed out of hand. We recognise that people have strong views about GM crops, and about the technology as a whole. We recognise that it is not solely a scientific issue. However, most people support the development of GM medical applications because they can see the benefit that those applications could bring. I ask Phil Gallie, and any other member who poses the question, why we should undermine our future competitiveness by closing the door to the potential benefits of that technology.
Does the minister agree that if we are to have a public that understands the challenges facing us, such as ethics in life sciences, technology education must be taught and supported in our schools?
I do indeed, and I take the member's point about resource and the claim that science lessons are being cancelled due to a lack of equipment. I do not know whether that is true—I am sure that the Minister for Education and Young People would wish to look into it. What I do know to be true is that the Executive has provided an extra £16 million of resources for additional science equipment since 2002, and that we are providing a further £2 million next month for that development. I hasten to add that all of that investment would be put seriously at risk were the nationalists ever to stand where I am standing and have to account for the black hole in their finances that is so obvious from their economic strategy—or lack of it.
Will the minister give way?
I am in the process of winding up.
Another minute would be helpful, Mr Wilson. [Laughter.]
Currently, 0.7 per cent of our GDP is spent on research and development. In his budget, the Chancellor of the Exchequer set a UK target of 2.5 per cent of GDP. What will the minister do to close the gap between 0.7 per cent in Scotland and the target of 2.5 per cent for the whole of the UK?
That will be achieved through the progress and development that we are hoping for in critical sectors such as the life sciences sector. The Parliament has debated the matter. The Executive has set targets and we are improving on our record. The level of public sector investment must be matched by private investment. As Mr Neil readily accepted, collaboration between the public and private sectors is critical to that process. The co-investment fund is a key instrument by which we might lever in more private sector investment.
I welcome the contributions from Kate Maclean and Alex Neil, although Alex's contribution bore no relation to the amendment. However, his point about the University of Dundee was well made. He was no doubt too modest to tell the chamber that the reference to the production of leading economic graduates was a personal one, but I recall that he was a member of the Labour Party at the time. As Kate Maclean said, contemporary Dundee is at the centre of the successful development of the biotechnology industry.
When I was in Dundee a couple of weekends ago, I was told by a pre-eminent Cambridge academic that, if somebody wants to study biotechnology, they go not to Cambridge, but to Dundee. Yesterday, we heard—albeit grudgingly—from Alex Neil's colleague, Brian Adam, that Aberdeen is a smart, successful city. It is great to have the SNP enterprise spokesman's endorsement of the fact that Dundee is also a smart, successful city under the Executive's direction. I am sure that everybody would agree that it is good to see the north-east prosper under the Executive. It is good for Stirling, Glasgow—
What about the south-west?
It is good for Ayrshire too.
The life sciences are, in general, a success story. Scotland will prosper as the life sciences prosper, and the life sciences will prosper under the Executive's strategy.