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Who

Nick Sherrard is a long-standing figure in Scotland’s innovation and enterprise landscape with deep knowledge of how public and private investment flows through the system. He brings data-driven analysis to questions most people discuss anecdotally.

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What is the core argument?

Scotland is not a starved innovation economy. It spends roughly the same per capita on innovation as Estonia. The problem is not resourcing — it is system design. Nobody tracks the whole system end-to-end, nobody owns the outcomes, and fragmented delivery produces many small companies but too few scaling ones.

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What are the key themes?

Scotland spends £230 per person per year on innovation. Nick’s data comparison is precise: R&D tax credits account for approximately £600 million, enterprise agencies approximately £370 million per year, and university R&D a larger figure again. Combined, this puts Scotland at roughly £230 per person — comparable to Estonia. The outputs do not match. Nobody is accountable for the whole system. Individual projects are heavily measured, but the system is not measured at all. Everyone is doing something; nobody can state whether the whole thing works. Scotland builds MUPPETs, not scaleups. Economists call them MUPPETs — Multiple Undersized Poorly Performing Enterprises. Scotland has an abundance of early-stage companies but too few scaling companies and even fewer exits. The ecosystem supports startups early then leaves them without a domestic market or growth engine to take the next step. Public procurement is Scotland’s biggest untapped scale engine. Public procurement in Scotland totals £16.6 billion per year — far larger than any innovation support budget. Even minor shifts toward Scottish digital products would dwarf existing startup support. Nick argues that if Scotland wants growth companies, the state should be their earliest and best customer, as banks were during the fintech boom. But procurement today is mainly an administrative process, not an innovation lever. Over-segmented into tiny islands. Every sector has its own strategy, committees, and funding streams. Functionally similar groups run parallel efforts. The result is duplication, blurred accountability, and a system founders cannot navigate. Stuck in a development mindset. Scottish policies mimic development playbooks — identify gaps, create programmes to fill them. Top-performing small nations doubled down on their own strengths rather than trying to catch up by copying. AI changes the game — and Scotland is not reacting. AI makes it possible to build global products with small, high-performance teams — the environment where Scotland should thrive. Yet Scotland’s current strategy still focuses on job creation and headcount growth, metrics misaligned with how modern tech companies actually work.

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What ideas were discussed?

  • Consolidate sector-specific strategies into a smaller number of cross-cutting priorities.
  • Publish a full map of innovation spending so the system can be assessed as a whole.
  • Shift public procurement from administrative process to innovation lever, including medium-sized contracts (£100,000 to £500,000) accessible to scaling SMEs.
  • Move from a “gap-filling” development mindset to a “strength-doubling” approach.
  • Align metrics with modern tech reality — revenue and productivity, not headcount.
  • Re-evaluate R&D tax credits to determine whether they contribute to scaleup creation or simply subsidise activity.
  • Treat simplicity as a national innovation strategy — fewer sector plans, fewer working groups, fewer disconnected initiatives.

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Pledge

Nick Sherrard committed to publishing an open, accessible dataset showing how Scotland funds innovation — how much is spent, where it flows, and how it compares internationally — to spark a national conversation about system design and accountability.

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