The report – commissioned by the Cabinet Secretary for Finance, Economy and Fair Work Derek Mackay – sets out the existing strengths of the higher education sector in Scotland and the actions necessary to marshal all of Scotland’s skills and expertise to reimagine the country’s proud industrial legacy for the 21st century.

Sir Anton has set out a range of specific recommendations for the Scottish Government, its agencies and for universities themselves.

The recommendations include:

  • A national innovation strategy should set a number of priority areas which should be the focus for research and innovation activity. These should be areas in which Scotland has a genuine competitive advantage or which have the potential to play a strong role in job-creation and economic growth, and which fit into a mission-orientated approach to innovation.
  • Assuming that public finances continue to be constrained, the Scottish Funding Council should consider focusing its research and innovation funding in a way which maximises the potential for Scotland to leverage additional funding from external sources.
  • Government investment streams should be better aligned to national priorities to drive innovation from the research base – for example, the Chief Scientist’s Office (Health) currently makes investments in innovation and research which could exert significant leverage if brought under the auspices of a more visible part of the innovation landscape
  • Recognising that Scotland currently underperforms other parts of the UK in accessing research funding from bodies like Innovate UK, a national target for accessing investment from external sources for innovation activity should be set.
  • The Scottish Government should introduce a new mechanism to ensure greater collaboration and coordination for Scottish bids to UK funding streams, preventing conflicting objectives or duplicating efforts, maximising the chance of Scottish success.
  • Universities should work with Scottish Enterprise, Scottish Development International and the Scottish Funding Council to provide an improved offer on intellectual property to inward investors looking to base major R&D activities in Scotland.

The Scottish Government, supported by the HE sector, should press for powers over skilled immigration to be devolved to the Scottish Parliament and should explore the possibility of introducing flexibility in R&D tax incentives between the devolved nations.

Speaking at the report’s launch at the Royal Society of Edinburgh today, Sir Anton said: “Scotland’s universities are a real success story for the country – already making a huge impact on economic growth at home and punching well above our weight internationally.

“But it’s important that we continue to be ambitious both for the higher education sector and for Scotland – and I know that there is so much potential for our universities to contribute even more to our economy and our society.

“This report sets out precisely how our universities, government and funding agencies can work together to do just that – calling for a shared national mission to put Scotland among the most innovative economies in the world.

“Scotland is known throughout the world for our proud industrial history – but we can no longer afford to look backwards to past glories.

“Instead, we should reimagine our industrial and scientific legacy as a springboard to create a new legacy of invention and innovation for the 21st century, equipping our children and young people with the skills and opportunities to lead the world in the industries of the future.

“Our country drove the industrial revolution and led many of the scientific advances which defined the 20th century. If we are to succeed in the modern economy, we need to retake our place at the forefront of international innovation in the emerging fields like Precision Medicine, Quantum Technology, FinTech and nanofabrication.

“Whether we can do so will depend on a number of factors – investment, collaboration, a national clarity of purpose and many more. But the will is there and our fundamental assets are strong – and I have every confidence that by working together we can each play our part in ensuring that Scotland meets its full economic potential.”

Economy Secretary Derek Mackay said: “I want to thank Professor Sir Anton Muscatelli, one of Scotland’s foremost economists, for this report examining how universities can continue to work alongside industry to prepare our economy for the future.

“Scotland’s world-class universities are already a major economic driver and it is important we ensure they can continue to fulfil their significant potential.

“We look forward to considering Professor Muscatelli’s recommendations in detail and responding over the coming year.”



University of Glasgow