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  • Ian Ritchie : Scottish Business Insider

We must keep the Enterprise Fellowship Programme

A FEW years ago, Scottish Enterprise developed a new strategy for Scotland.

In agreement with the Scottish Executive it defined the overarching policy that was to drive its future decisions.

It was called 'Smart, Successful Scotland' and concentrated on developing a knowledge economy, in particular helping to commercialise the strong research base.

One of the key instruments in this policy was the Enterprise Fellowship Programme, managed for Scottish Enterprise by the Royal Society of Edinburgh.

Enterprise fellowships were awarded to young, talented researchers in Scotland's universities; usually those who have achieved a postgraduate degree and can see good prospects for commercial exploitation of their area of research.

Over the past ten years, 76 fellowships have been awarded and they are great value.

Every Enterprise fellow gets a year's salary (around £45,000) and receives targeted training in business skills and most go on to start up companies. Over 10 years for a total cost of under £4m, more than 50 new companies and hundreds of jobs have been created, great value at under £80k per new business.

The scheme has been so successful that it has also been adopted by the Biotechnology and Biological Sciences Research Council and the Particle Physics and Astronomy Research Council. They are now putting their own fellows through the programme.

So you would expect that such an excellent scheme would be enthusiastically promoted by Scottish Enterprise. Recently, however, it has given it lacklustre and grudging levels of support.

During SE's financial crisis last year, all fellowships were stopped. Despite it being totally aligned with the Smart, Successful Scotland strategy, the taps have yet to be turned back on, pending a 'review'.

This review has now been completed by Ernst & Young and Oxford Economics and will be presented to the next Scottish Enterprise board meeting.

Unfortunately, this review, disclosed at a meeting at the Scottish parliament in January, is remarkably negative about the effectiveness of the scheme. The gross value added (GVA), it concludes, was only £1.4m and only 56 per cent of the awards led to companies being created.

Of the 76 awards only 57 completed their survey and only 19 of these gave the economic information needed to calculate the value add. Bizarrely, this review has just taken the figures it got back and calculated its total result from this patchy information.

This glaringly inadequate data has led to faulty research conclusions.

Even a cursory glance behind these figures suggests dramatically better performance.

MicroEmissive Displays is reckoned to destroy around £5m of GVA because of losses incurred at this stage in its development.

But as it is currently worth over £22m on AIM, by any sensible calculation that is £22m value added - not £5m destroyed.

Another company, Photonic Materials, is reported as "no longer trading", which is true, but that is because it was successfully sold. A missing return, DEM Solutions is actually a global leader in its field, employs 20 people, made sales of over £1m last year and is growing dramatically - it must be worth well over £5m today.

And there are lots of other examples.

One can only hope that the board of Scottish Enterprise will consign this review to the waste bin and move swiftly and decisively to get this excellent programme back into operation.

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