Elected Member Briefing - Technology and Innovation Incubators

About this briefing note

Report by: Serge Merone, Climate Change and Smart Investment Manager 

Date: 23 January 2023 

Subject: Technology and Innovation Incubator Units 

Responsible Officer: David Littlejohn, Head of Planning and Development 

Details

Purpose

On 30 November 2022, the Finance and Resources Committee asked for a briefing note to be provided to members of the committee regarding the removal of the budget of £1m for Technology and Innovation Incubator Units under Prudential Borrowing.

Briefing information

The budget of £1m was approved by the Council on 22 June 2016 (Report 16/277) under Prudential borrowing. 

The project aimed to develop Technology & Innovation Incubator facilities to encourage new and innovative businesses. The loan charges would be met from the rent paid by the businesses occupying the facilities. The project did not progress pending discussions on the Tay Cities Deal as innovation was a key element of the new regional economic strategy underpinning the Deal. This could have influenced how Council's funding could have been used particularly as leverage. 

In 2018, a partnership opportunity was identified with Perth College UHI as part of the Aviation/Engineering Project to be submitted under the Tay Cities Deal. The partnership opportunity was to use the Council's funding to develop an incubator space within Perth College UHI facilities to support engineering start-ups and use rental income to pay loan charges as agreed. 

Announcement of the Deal was delayed but was finally signed in December 2020. The Aviation Academy/Engineering project was included for support in the Deal.  Unfortunately, the Aviation Academy/Engineering project was delayed at regional level due to specific partners circumstances, but also Covid. The timescale for the Project is still uncertain. 

Meanwhile, the national picture around innovation moved significantly. The 'Logan Review' of the Scottish Technology Ecosystem has been carried out and published which included a focus on Infrastructure including physical co-location environments for start-ups and the social infrastructure required to support a vibrant technology ecosystem.  In July 2022, Scottish Government allocated £42m to CodeBase to develop a national backbone network of "Tech-Scalers", whose capabilities would build upon and extend beyond traditional incubation programmes. Tech-Scalers will combine best practice in incubation, education, ecosystem social infrastructure, and integrated funding. Access to all services would be provided both physically and in a fully-virtualised form, enabling country-wide participation in Scotland's high-technology economy. Whilst Perth - at present - is not included as a location for a Tech Scaler we know from recent discussions that if an opportunity is presented, Codebase will look at Perth for a Tech Scaler. Discussions are on-going with CodeBase. 

As the funding was agreed in 2016, the partnership opportunity with Perth College UHI less certain, and in the light of this changed national picture, it was thought best to remove the current prudential borrowing allocation and come back with a more defined project when the position on a Tech Scaler becomes clearer.