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EL/03/06/A

ENTERPRISE AND LIFELONG LEARNING COMMITTEE

AGENDA

6th Meeting, 2003 (Session 1)

Tuesday 18 March 2003

The Committee will meet at 2.00 pm in the Chamber, Assembly Hall, The Mound,Edinburgh

1. Entrepreneurship for young people: The Committee will take a briefing from:

Jack Burns, Dionne Coyle, Rachael Kennedy, Paul Moran, Paul Cannon,Rachael Brennan, Carleen Smith and Lisa Naidoo, St Helen’s Primary School,Cumbernauld, who will be accompanied by their class teacher, Marie McLean,and Jean Shields and Sarah Hall, Schools Enterprise

2. Improving entrepreneurial opportunities: The Committee will take evidence from:

Chris van der Kuyl, (Chief Executive Officer) VIS Entertainment

Tom Hunter, (Entrepreneur)

Graeme Semple, Founder, Scottish Paintball Centre, (Prince’s Scottish YouthBusiness Trust)

Stephen Rattray, Founder, mmpg.net, (Prince’s Scottish Youth Business Trust)

3. Future Skills Scotland: The Committee will take evidence from:

Stephen Boyle, (Director) Future Skills Scotland

4. House of Lords Select Committee on Science and Technology Report –“Chips for Everything”: The Committee will take a briefing from:

Ron Dunn, (Chairman) and Professor Steven P Beaumont, (Director) Institute forSystem Level Integration

Simon WatkinsClerk to the Committee

Room 2.7, Committee Chambers

EL/03/06/A

Ext. 0131 348 5207

*************The following papers are enclosed:

Agenda Item 1Careers Scotland Cover and Submission EL/03/06/1

Agenda Item 2Cover note and panel biographies EL/03/06/2Submission from Chris van der Kuyl EL/03/06/3Submission from Tom Hunter EL/03/06/4Submission from Graeme Semple EL/03/06/5Submission from Stephen Rattray EL/03/06/6

Agenda Item 3Submission from Future Skills Scotland EL/03/06/7

Agenda Item 4Cover note EL/03/06/8Submission from the Institute for System Level Integration EL/03/06/9“Chips for Everything” Executive Summary EL/03/06/10

EL/03/06/1

Enterprise and Lifelong Learning Committee

Meeting 18 March 2003

Entrepreneurship for young people

Following on from its inquiries into Lifelong Learning and Tourism, theCommittee agreed to take evidence from young people aboutentrepreneurship and their aspirations for the future.

Members will hear from a group of young people from St Helen’s PrimarySchool, Cumbernauld, who have been involved in the Schools EnterpriseProgramme. The young people will be giving a presentation and memberswill also have the opportunity to ask questions.

I am attaching a letter and a leaflet on the Schools Enterprise Programme foryour information.


SEP 'CAN DO' 4PP 1/13/03 4:22 PM Page 1

The SEP Team are:Sarah HallNational Project ManagerSchools Enterprise Programme150 Broomielaw, Atlantic Quay, Glasgow G2 8LUt: 0141 248 2700 m: 07786 333859 [email protected]

Brian TwiddleNational Enterprise Education OfficerNational Centre: Education for Work and Enterpriset: 0141 950 3141 m: 0771 [email protected]

Alistair MorrisonProject AdministratorSchools Enterprise Programme150 Broomielaw, Atlantic Quay, Glasgow G2 8LUt: 0141 248 [email protected]

The Board of Schools EnterpriseScotland LtdIain Anderson, ChairmanIndependent Businessman

Tom HunterWest Coast Capital

John SpenceUniversity of Strathclyde

Chris van der KuylVIS Entertainment plc

Christine WilsonLangside Primary School

This is an ambitious Project that breaks new ground on a global basis, enabling all schools and teachers inScotland to deliver enterprise education within the 5-14curriculum - a world’s first. This £5m programme was theidea of the private sector and the many businesses andindividuals who have contributed so generously arelisted in this brochure. These donations have beenchannelled through a new company, Schools EnterpriseScotland Ltd. The Scottish Executive are being equallygenerous in contributing half the £5m. SEP is managednationally by Careers Scotland.

This phase of the SEP started in July 2001 and therehave been some impressive achievements. Every part ofScotland has at least one Enterprise Education SupportOfficer (ESSO) who has contacted every school inScotland to offer training and support. These ESSOs arethe vital ingredient in the success of the Programme.They ensure that every school receives the personalservice necessary to meet its own requirements. TheProgramme has achieved all its targets for numbers ofteachers trained and there is an impressive range andquality of projects displayed on the website.

The SEP continues to be based around the keyresources of Enterprising Infants (P1-P3) and Go forEnterprise (P4-P7) but a new resource for S1-S2 hasnow been produced to enable the programme to coverthe entire 5-14 age range. Many other resources areproving useful - in particular, the Be An Inventorprogramme. But the SEP is about more than just

resources. Schools are being shown how so much of what they do can be made into an enterprise project with relatively little change - it is about changing attitudes not just providing a new resource to work through.

The programme is being supported by rigourousresearch which is on course to show how enterprise canhelp improve children’s learning and attainment as wellas creating more positive attitudes to self-employment.The research is also looking at how enterprise is linkedto the wider aspects of education such as citizenship.

How do we know we are making a difference?Apart from the achievement of our numerical targets wehave all seen the response of teachers and youngpeople. We have held a large number of national andlocal showcases and challenges which have impressedall who have attended. The confidence and ‘can do’attitudes of the young people make this whole projectworthwhile. If you have not yet had an opportunity toattend such an event we hope you will find time to doso. Dates and locations can be found on the website.

We have also commissioned an external evaluation byWarwick University. Every one of the five interim reportshas been extremely positive.

How much better would our society be if we

all thought along the lines of can do?

The Schools Enterprise Programme (SEP)

aims to achieve just that, building an

enterprising culture that shifts attitudes and

minds away from traditional dependancy

towards a ‘can do mentality.’ It won’t be easy

but with everyone’s help we are beginning to

make a difference.


Careers Scotland

Scottish Enterprise, 5 Atlantic Quay, 150 Broomielaw, Glasgow G2 8LU Tel: 0141 248 2700

www.schoolsenterprise.co.uk

Schools Enterprise Scotland LimitedScottish Chartity No. SC 030453

TBH Charitable TrustBank of ScotlandThe Souter Charitable TrustIrvine LaidlawBT ScotlandCity Facilities Management

Richard Emanuel

Kate Macaskill FoundationCorporate Comunications Hire LtdScottish & NewcastleChris GormanClyde Blowers plcHenlys Group plc

Cairn EnergyCentrica plcDerek GrayThe Hamilton Portfolio LtdICI plcLinn Products LtdOptical ExpressSpektra Systems

Jim McMahon

Careers Associates (UK) LtdMastclimbersQuest InternationalScottishPowerPiersland House Hotel & The Huntingtower Hotel

Alastair Balfour

Scotnursing Ltd

Beattie MediaCharles Price & Co

Braemore Property Management

Alma & Leslie Wolfson Charitable Trust

The Aitchison & Colgrave Group Ltdamf INSIGHTGordon & Ena Baxter FoundationCaponesClairmonts SolicitorsDundas & WilsonErnst & YoungNelson GrayRobert D KilgourLightbody Celebration CakesMJM International LtdMPM Capita LtdSir William PurvesReservoir Management LtdMartin RitchieRob Walker

Brian JohnstonThe Buckingham ClinicHarlequin Leisure GroupMax Horne Financial ServicesJM Estates (Scotland) Ltd

Alan R MacKay & Company LtdMatch Point HospitalityMotherwell Bridge Holdings LtdThe Project Management Partnership(UK) plcSematek Group of CompaniesThe Surrey Square Charitable TrustGrant Thornton

Whitelaw, Baikie, Figes

Tim AllanTannson Ltd

Academy - IT Limited

Stevenson Sharpe IntegratedCommunications

Betasoft Ltd

Benedetti International plcBullet Express Sameday LtdCareercare (Computing) LtdK3 Design LtdKids Club DirectDr Jonathon LevieMediacorp LimitedMinerva First LtdThe Recovery Audit Group UK LtdSymingtons JewellersZenith Chemical Systems Limited

Adder International LtdArdgowan AssociatesElaine CrawfordEdinburgh Physiotherapy CentreMcArthur ResearchIan McLauchlan Associates

Fries Tait FoundationGavin GemmellMacDonald KinnairdHammond ResourcesProf John SpenceGS Associates (Scotland) Ltd

Contributions in kind received from:Wm Anderson & Sons LtdBurnessEnrich ConsultingErnst & YoungEwan HunterThe Leith AgencyMilton Hotel GroupNewton EH6 Ltd

Donors


12 March 2003

Michael GovindEnterprise and Lifelong Learning CommitteeRoom 2.7Committee ChambersScottish ParliamentGeorge IV BridgeEdinburghEH99 1SP

Dear Michael

COMMITTEE MEETING 18/03/2003SCHOOLS ENTERPRISE PROGRAMME

I am pleased to enclose for the Committee’s perusal some background informationon the Schools Enterprise Programme (SEP).

SEP is managed by Careers Scotland on behalf of Schools Enterprise ScotlandLimited and the Scottish Executive and is one of Careers Scotland’s core educationfor work and enterprise activities.

The current phase of SEP started in July 2001 and runs until June 2004. By the endof this period, our aims are for:

• all schools to have plans and the capability to ensure that every pupil has theopportunity to enjoy at least three enterprise experiences during the 5-14curriculum.

• all pupils to have already had at least one enterprise experience.

• all areas of Scotland to hold annual celebration events to show good practice inenterprise education.

• each area of Scotland having a number of 'enterprising schools’

In total, over 5000 teachers have received training in enterprise education usingresources such as Enterprising Infants and Go for Enterprise. Since August 2001,over 1200 enterprise projects have been undertaken in the classroom, involving atotal of 30,000 pupils from all areas of Scotland.

I have enclosed for your information some leaflets, which provide some more generalinformation on how SEP is organised and run.

Yours sincerely

Alistair MorrisonProject Administrator

Enc.

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Improving Entrepreneurial Opportunities

The Committee had agreed to take evidence on entrepreneurial opportunitiesin Scotland. Members will hear from a panel of four entrepreneurs; two well-established figures in Scotland and two young entrepreneurs.

I am attaching:

• brief biographies of panel members; and• submissions from each of the panel members.

The panel has been asked to identify successful support for and potential andactual barriers to entrepreneurship in Scotland.


Witnesses for Enterprise & Lifelong Learning Committee meeting – 18 March 2003

Chris van der KuylChief Executive Officer, VIS Entertainment

Chris van der Kuyl is a computer science graduate of the University of Dundee. Prior tofounding VIS Entertainment plc he worked extensively in the US and European interactivemarkets. Mr van der Kuyl is acknowledged widely as among the leading youngentrepreneurs in Scotland. He was named Young Business Achiever at the most recentScottish Business Insider Corporate Elite Awards, having previously won the sameorganisation’s Young Business Leader of the Year award in 1999. He has also been theScottish regional winner of Ernst & Young’s prestigious Emerging Entrepreneur of the Yearawards.

VIS Entertainment plc was formed in 1996 to specialise in computer games development.The company is involved in the business of Entertainment Property Development. Theydesign and develop interactive games software for major console platforms and provideinteractive content for Interactive Digital Television (“iTV”) and broadband. VISentertainment plc consists of VIS Games and associated companies Axis Animation andVIS iTV. The company has grown from being an employer of 8 in 1996, to employing 180people based in studios in Dundee, Dunfermline, London and the Isle of Wight.

Mr van der Kuyl works in encouraging entrepreneurship in schools, colleges anduniversities. He is chairman of Young Enterprise Scotland and a Director of both SchoolsEnterprise Scotland and the Dundee Science Centre. He is also Visiting Professor inDigital Entertainment at the University of Abertay, Dundee.

Tom HunterEntrepreneur, partner in West Coast Capital

Tom Hunter is currently a partner, along with Jim McMahon, in West Coast Capital.Founded in the Spring of 2001, West Coast Capital is a Private Equity Fund that investsmoney and entrepreneurial skills into fast growth businesses to speed their developmentand increase their values. In 2001, West Coast Capital was one of the ten largest privateequity groups, measured by deal size, in the UK.

Over an eighteen-year period, Mr Hunter established Sports Division into one of the UK’spremier sports retailers, employing 7500 people in more than 250 stores. Sports Divisionwas sold in 1998, with Mr Hunter’s personal stake in the business valued at £260 million.Prior to commencing his involvement in West Coast Capital, Mr Hunter invested as an“angel” investor in high growth businesses in Property retail, Leisure/Branding andTechnology throughout Europe.

Mr Hunter is Chairman of the Entrepreneurial Exchange – a leading members organisationfor entrepreneurs in Scotland. He has provided financial support to the Hunter Centre forEntrepreneurship at Strathclyde University. He is also a director of the Princes ScottishBusiness Youth Trust, Schools Enterprise Scotland and Young Enterprise Scotland. Inaddition, he is also a Trustee of the Carnegie Trust for the Universities of Scotland andChairman of the Make a Wish Foundation in Scotland.

Graham Semple, Founder, Scottish Paintball Centre

Graham completed a B.Technol. Leisure and Recreation Management at the University ofGlasgow in 1995. In October 2000, with support from the Princes Scottish Youth BusinessTrust, Graham and two partners launched the Scottish Paintball Centre. By Spring 2002,turnover had risen 75% and the partners successfully applied for growth funding from thePSYBT. In October 2002 the company won a regional business award, and then came inthe top 6 (from 500) in national business awards. Recently the team has launched the firstoutdoor laser games in Scotland.

Steven Rattray, Founder, mmpg.net

With an M.A. in Psychology and several years as a sports coach and accounts assistant,Steven Rattray founded mmpg.net in August 2000, with the core business being supplyingmatch information and fantasy football competitions based on the Highland FootballLeague to newspapers. Over the subsequent 30 months two websites have beenlaunched to enhance the coverage given to the league and the company now employs 25part time staff to report on HFL matches. The websites attract 24,000 readers every monthfrom a total of 36 countries around the world.

Ross BurnsideResearch Specialist – SPICe

Enterprise and Lifelong Learning

EL/03/06/3



Chris van der Kuyl

Submission from Chris van der Kuyl attached.


Submission from Chris van der KuylEnterprise and Lifelong Learning Committee

18 March 2003

Biography

Chris van der Kuyl is the founder, President and Chief Executive Officer of VIS entertainmentplc, which creates leading-edge entertainment property for broadband and leading gamesplatforms worldwide.

VIS developed the top-selling game State of Emergency, which topped the US and UKcharts after its launch in 2002. The company develops a range of games on all platforms,and employs almost 200 people in studios at Dundee, Dunfermline, London and Isle ofWight.

Chris was named Young Business Achiever at the 2002 Scottish Business Insider CorporateElite Awards, having previously won the same organisation’s Young Business Leader of theYear prize in 1999. He has also been the Scottish regional winner of Ernst & Young’sEmerging Entrepreneur of the Year awards.

He is Chairman of TIGA (The Independent Game Developers Associations), having been aFounding Director of the organisation, which is the principal representative body for the UKindustry.

Chris is Chairman of Young Enterprise Scotland and a Director of both Schools EnterpriseScotland and the Dundee Science Centre. He is Visiting Professor in Digital Entertainment atthe University of Abertay, Dundee.

Origins

I was attracted to set up in business at a young age, my first experience of business wasbecoming a Young Enterprise Scotland achiever whilst at school in 1985. This led me tobelieve that an entrepreneurial career was not only desirable but eminently achievable.Although none of my family have ever been in business for themselves starting a companybecame an ambition for me throughout the rest of my school and university career.

My home town of Dundee provided both a focus for the nascent Scottish games industry,through its long association with Sinclair through the Timex manufacturing facility for the ZXSpectrum, and also for high quality software engineering through NCR’s investment in thecity. This created an environment within which I believed I could build a world class softwarebased enterprise from start up.

I was involved in my first business after university, before creating VIS entertainment in 1996.

The company has expanded continuously since its creation, and now has four studiosemploying 200 people, creating and developing games and digital entertainment for everymajor platform including PlayStation2, Microsoft XBOX and Nintendo GameCube. In 2002VIS games products generated in excess $50 million US of retail sales worldwide.

The company has attracted more than £10 million pounds of investment from the venturecapital community and private backers. This was crucial to funding its development andenabling VIS to tackle global markets. It has also had support in various forms from theScottish Enterprise network.

Young Enterprise Scotland

There is no doubt that more can be done to encourage entrepreneurship and develop agenerally stronger understanding of business among school children, both in primary andsecondary schools.

There is a strong element of cultural change required in Scotland in terms of attitude toentrepreneurship and business creation. It is increasingly well recognised by the public atlarge that indigenous companies deliver more sustainable new jobs and are effectively thebackbone of the economy.

We have made progress on these fronts, ever since the early 1990s when the question wasintroduced into public and political debate, for example around the time of ScottishEnterprise’s Business Birth-rate Inquiry (1993).

All organisations involved, including Young Enterprise Scotland (YES) and The SchoolsEnterprise Programme, take the view that this is a “long haul” task. Children today are muchmore likely to be setting up businesses, or working for small and medium sized enterpriseswhich are owned locally, than were their parents. It is recognised generally that the “job forlife” is a rarity, and will become even less prevalent in future. There are fewer very largeorganisations – both in the public and private sectors – who will offer that kind ofemployment.

It is recognised generally that now and in future people have “portfolio” careers. They areassembling a range of skills which will be applied both in employment, as employers, or self-employed.

YES provides nearly 7,000 young people each year with the opportunity to be enterprising,and to understand how businesses work.

In 2001/02, YES delivered 237,000 hours of enterprise education to students in secondaryschools.

YES is currently working in partnership with 74 per cent of all Scottish secondary schoolsand aims to work with 100% of secondary schools, in line with its vision to provideopportunity for all young people in Scotland to developing their enterprising skills. YES alsoaims to increase its focus on the disaffected and find innovative and creative ways to reachand deliver enterprising experiences

The organisation generates 90 per cent of its income from the private sector.

The organisation has an established volunteer network of 1,200 business people andeducationalists throughout Scotland, supported by 17 area boards and YES’s employed staffof nine.

Key points - General

• We need to capitalise on the various programmes which are designed to encourageenterprise, and to ensure that support for these programmes is seamless, avoidingduplication.

• Activities which are designed to encourage entrepreneurship should link into theschool curriculum. They should not be seen as “add-on”. This will be achieved byincreasing the number of teachers who become involved in leading entrepreneurialstudies and for the HMI to support schools in these aims

• For example, YES in conjunction with the Scottish Executive, ScottishPower Learningand the Scottish Qualifications Authority, developed core skills accreditation materialsthat can be used for any enterprise programme by teachers to accredit core skills andother skills that provide a strong foundation for citizenship, employment and lifelonglearning.

• Leadership within schools is of paramount importance, and the educationalenvironment needs to support and recognise such commitment to enterprise activity

• The development of entrepreneurial skills must reflect the emergence and growingimpact of technology and e-commerce on business.

• There is increased competition for funds and access to young people, leading to alack of focus and the risk of perceived duplication.

• We must provide all young people with the opportunity to develop their enterpriseskills and capabilities.

• This should apply not only to those in mainstream education, but also to youngpeople with special needs, for example

• Enterprise should also continue to be encouraged among those living indisadvantaged areas, with support tailored to different needs in those area

• Every effort must be made to sustain, encourage and build private sector support –both in terms of funding and voluntary effort

Key points – Government & public sector support

• There is a genuine enthusiasm for enterprise education within the ScottishParliament, Executive and the enterprise network

• In recent years general understanding of the issues has improved greatly

• There are now several bodies, including YES, and some overview could be taken toensure that every area of service is being delivered, without duplication

• There are now many “reports” which impact on encouraging entrepreneurial activityamongst young people in Scotland – for example, Determined to Succeed – AReview of Enterprise in Education, Enterprise and Life Long Learning CommitteeReports, the National Debate on Education and so on. Depending on how these aretackled, they will either add to or detract from stimulating entrepreneurs. Anintegrated approach is required.

• Addressing cultural attitudes to enterprise is a long-term challenge which must betackled in a consistent manner over a period of many years

• The issue of developing entrepreneurial skills is more measurable than attitudinalchange, and we must continue to build the range and quality of teaching materials,accreditation and evaluation

• The strategic priorities of the Scottish Executive policy document Smart SuccessfulScotland are aligned with our view of what needs to be done

EL/03/06/4



Tom Hunter

Submission from Tom Hunter attached.


SUBMISSION TO THE ENTERPRISE & LIFELONG LEARNINGCOMMITTEE FROM TOM HUNTER, ENTREPRENEUR

Having been asked to present my views on Entrepreneurship in Scotland I do so bothas Chairman of the Entrepreneurial Exchange (Entex) and as a committedentrepreneur. My views are a reflection on what I believe may stimulate greaterentrepreneurial activity here in Scotland, in particular with the younger generations.

These views are stimulated from hard research conducted by The Hunter Centre forEntrepreneurship and informed from our own research and research conducted via theEntex membership.

Why are entrepreneurs important?

LET ME TELL YOU WHY I BELIEVE ENTREPRENEURS ARE SOIMPORTANT AND LET ME PERHAPS CONFOUND SOME INGRAINEDBELIEFS THAT SOME OF YOU MAY HAVE THROUGH EVIDENCE FROMTHE UNITED STATES.

CONTRARY TO POPULAR BELIEF ENTREPRENEURS ARE THE ENGINE OFALMOST EVERY MODERN ECONOMY YOU CAN DEFINE…

• IN THE SIXTEEN YEARS BETWEEN 1979 AND 1995 FORTUNE500 COMPANIES LOST MORE THAN 4M JOBS

• IN THE SAME PERIOD ENTREPRENEURS CREATED ASTAGGERING 24 MILLION JOBS, WITH A 200% INCREASE INTHE NUMBER OF BUSINESSES BEING STARTED

• 5% OF THE YOUNGEST AND FASTEST GROWING BUSINESSESCREATED 77% OF ALL THE NEW JOBS

AND IS IT OLD BUSINESS THAT CREATES ALL THE WEALTH? TWENTYYEARS AGO TWO UNIVERSITY GRADUATES CREATED A SMALLTECHNOLOGY BUSINESS IN A BACK ROOM, TODAY IT IS ONE OF THETOP COMPANIES BY MARKET CAPITALISATION IN THE WORLD, ITSNAME? MICROSOFT…

BUT YOU DON’T HAVE TO BE BIG TO BE SUCCESSFUL - IN THE UKSMALL BUSINESS MAKES A HUGE CONTRIBUTION TO THE ECONOMYBOTH IN JOB AND ECONOMIC TERMS.

INDEED SMALL BUSINESSES ARE THE ENGINES OF THE ECONOMY ANDINDEED INNOVATION – FOR EVERY DOLLAR SPENT ON RESEARCH ANDDEVELOPMENT SMALL FIRMS PRODUCE 24 TIMES AS MANYINNOVATIONS AS THEIR LARGER COUNTER PARTS.

SO IT IS, IN THE MAIN, ENTREPRENEURS THAT GENERATE THEWEALTH THROUGH THE TAX SYSTEM TO INVEST IN OUR SCHOOLS,OUR ROADS, OUR HEALTH CARE SYSTEMS AND THUS THEIRTHRIVING ALLOWS GREATER INVESTMENT IN TO OUR SOCIETYAND OF COURSE THE PROVISION OF MUCH NEEDED EMPLOYMENT.

Where are we now?

As a statement of where we are today in Scotland it is true to say that we are amongstthe lowest achievers (of 37 nations surveyed) – our Total Entrepreneurship Activitylevels are one of the lowest of all nations measured through the GlobalEntrepreneurship Monitor (GEM).

The third Scottish GEM this year provides marked food for thought for policy makers,educationalists, entrepreneurs and, in an election year, our politicians.

In analysing the GEM findings we should remind ourselves that quick fixes toScotland’s endemic cultural problems are the stuff of dreams. However that shouldnot provide our policy makers with any excuses.

From these findings it is abundantly clear that we as a nation need to do much more interms of investing in education, in fellow entrepreneurs and in driving a self-confidentnation through cultural change.

We have come a long way in a short time and the Scottish Executive should takesome deserved praise for supporting many new initiatives, not least the SchoolsEnterprise Programme – WE SHOULD BE SO VERY PROUD OF THISPROGRAMME – A WORLD FIRST FOR SCOTLAND. Where is it to date:

* A STAGGERING 53% OF ALL PRIMARY SCHOOLS ARE NOWPARTICIPATING* 683 MICRO-BUSINESSES OR PROJECTS ARE TURNING PROFIT FROMEVERY NOOK AND CRANNY ACROSS SCOTLAND* ALMOST 5000 TEACHERS ARE NOW TRAINED AND PARTICIPATING* MANY, MANY THOUSANDS OF CHILDREN ARE ENJOYING THEFREEDOM OF THOUGHT, OPPORTUNITY AND SELF-BELIEF

This programme will do so much over the long-term to foster a culture of ‘can do’ butmore must be done…

TEA rates in young males have markedly declined, whilst females now match malesin terms of their activity levels, excellent news indeed as our gender gap has closed atleast for now.

Importantly opportunity perception amongst young males has risen, perhaps a pre-cursor to more entrepreneurial activity in the coming years.

‘Friends and family’ investment has declined yet further – we Scots don’t like toinvest in one another’s businesses and this is a serious concern as this informalinvestment correlates significantly to opportunity rates.

And we are failing to produce the quantity of new businesses in order to generatemore quality enterprises; the link I am assured is an absolute one.

Our fear of failure has been narrowed, but we must do more to ‘knock the ‘t’ off thecan’t’ if we are to grow and prosper as a nation. Yet again in absolute terms we seewithin the GEM report the absolute link between education and enterprise, the morewe educate ourselves the more entrepreneurial we become.

This report offers some clear policy direction that should be accepted and acted uponwithout delay. We do not need more inquiries, consultations nor debates – our coreproblems rest in our culture, education and investment practices.

So in summary we have too few new businesses being created and even fewer go onto become major players. Moreover too few of us see the opportunity of self-determination through self-employment or new business creation.

How did we get there?

The culture of dependency fostered by successive governments through stateindustries has imbued that culture across our nation; shipbuilding and mining are twoclassic examples of this. Government intervention has the inbuilt danger of merelyserving to recreate the problem that it aims to solve so we must take care to define anddeliver programmes that do not foster grant or government dependencies.

Short Term Policy Actions

The Scottish Executive presented this Parliament with the ‘Determined to Succeed’review of enterprise in education, its MSP’s, in my view, should approve thatblueprint and implement its findings with utmost urgency against qualitative andquantitative measurements. I am prepared to put my money where my mouth is tomake this happen.

Why? Because education is the key to changing our attitudes, our culture and ourdeep-seated dependency – we must become a nation of self-determining in people: wemust believe that we ‘can do’ and education is the only effective tool in achieving thisgoal.

Industry should play a full role in supporting that implementation – it is easy on theone had to carp about government support and then on the other ignore taking asocially responsible role.

As for ‘friends and family money’ we should ask whether or not the Scottish Co-Investment Fund has missed a target market or whether another funding programme isneeded to target an absolute funding gap – definitive research into the role of micro-credit should also be conducted .

Equally we must question whether Scottish Enterprise’s performance targets insupporting 8, 000 new starts are not a little too easily achievable when the task forScotland is so monumental.

Long Term Change

You cannot teach an old dog new tricks – our focus should be in effectingcultural change towards both enterprise and entrepreneurship over a long-termperiod through greater investment in education. Catch a young dog and you seeopportunity staring you in the face.

The Carnegie Corporation of New York in its most recent research into studentachievement states emphatically that their research ‘establishes beyond doubt that thequality of the teacher is the most important cause of student achievement’.

We in Scotland need to reinvest substantial funds into re-establishing the career of theteacher as that of a clinical professional, invest in excellence, reward progress anddrive pupil attainment through teaching excellence. Do not get me wrong our teachersdo an exceptional job but they are constrained in many ways – they should be viewedin our society as important as the lawyer, doctor or indeed the entrepreneur.

To solve our paucity of entrepreneurs start with education, move to a middle groundof education and then finish with education – education is the key to unlocking long-term economic, social and civic development in Scotland.

Indeed we should not confuse the ability of education to deliver more entrepreneurs, itwill also deliver more enterprising individuals…Imagine a world of enterprisingpoliticians for example whereby concensus for the good of the nation iscommon…Importantly building a nation of enterprising individuals will effect howgovernment, schools, hospitals et al are run – more efficiently, with passion andcommitment – enterprise then leads to entrepreneurialism.

The Future

It is my belief we in Scotland have the capability, motivation and drive to delivera nation we can all be proud of. We can only achieve this if we reach a consensusover the import of education.

The only way to predict the future is to create it…Empirical evidence exists tomap out a clear direction with which to build this nation over the short, mediumand long-terms, we should not ignore that evidence. Nor should the Executive,politicians or officials be wary of dynamic change for the good of the nation.

There is no magic wand, no implicit or explicit programme that will overnightcreate a nation of entrepreneurs. If there is a panacea at all it exists within everyindividual, education is the light that will show that individual the route towardssuccess. That route must be clearly lit by a continuum of enterprise education.

We must break the circle that sees great teachers go to great schools, greatteachers should be in every school.

Does government have a locus? Of course but is it one of facilitation andinvestment not in fostering any form of dependency for that truly is the means toa very negative end.

The fact is within Entex our members grow faster, build more businesses andrarely seek out government or economic development support – fellowentrepreneurs support fellow entrepreneurs to the greatest effect.

Fundamentally the greatest opportunity we in Scotland have is opportunityitself. All of our Nation’s population should be able and willing to affordthemselves that thought.

Action will speak louder than any words. For the sake of our nation’s future letus grasp the opportunity to change, invest in education and invest in our youth –it is they who offer us the real opportunity.

Ends.

The first thing to say is that there is a truism in the statement that you can lead a horseto water but you cannot make it drink

EL/03/06/5



Graeme Semple

Submission from Graeme Semple attached.


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EL/03/06/6



Stephen Rattray

Submission from Stephen Rattray attached.


Submission from Steven Rattray – Proprietor of mmpg.net

mmpg.netBackground

mmpg.net was founded in August 2000 with the core business being supplyingmatch information and fantasy football competitions based on the HighlandFootball League to newspapers.

Over the subsequent 30 months two websites have been launched to enhance thecoverage given to the league and this has seen us employ 25 part time staff to reporton HFL matches. The majority of the part time work force are senior school pupilswho are employed following direct involvement with the schools and localauthorities.

We have given them an opportunity to gain intellectual work experience andconfidence that they can produce work of a professional standard despite being stillin their late teens as well as allowing them to earn money through an appreciationof sport.

The readers are, naturally, Highland League fans based around the world withvisitors from a total of 36 countries regularly logging on towww.highlandleague.net along with 24,000 other readers every month.

The business idea

While employed as an accounts assistant with Cap Gemini I had the idea to startmy own business. Due to the time constraints of being a busy employee it wasextremely difficult to carry out the necessary market research and meet the people Ihad to during non-working hours. As the idea became more ‘real’, I realised I hadto give up full-time employment to fully research the opportunity.

This was an extremely difficult decision to make as I was effectively barred fromclaiming any benefits as I had voluntarily given up work. I had to return to thefamily home and relied on the little savings I had and the goodwill of my parents tosurvive. There must be others in similar positions that do not have family supportto help them during this time and having had other family members utilising theweekly allowance that was previously available to entrepreneurs I found it difficultto understand why so little funding was available when I started up on my own.

Pre start support

I made contact with the local sub-contracted enterprise agency and although I wasgiven several leaflets it was made clear that since I was only creating a company thatwould employ myself there would be no cash schemes that I could apply for. Whenmy age was discussed I was immediately given PSYBT contact details. Followingseveral meetings and discussions I was given a £4,000 loan. I did not qualify for anygrant support from PSYBT, as I, once again, had chosen to leave my work positionand therefore was not deemed by the government to be “unemployed”.

On contacting several banks I found that due to my lack of a track record andcollateral or cash of my own they would be unable to support me at this time. Theywould open an account for me and charge me to run it but could/would not help mefinancially. It is a legal requirement to have a business bank account yet myexperience after almost 3 years is that the banks make money from this law. Thebusinesses pay for this but find it incredibly difficult to raise finance from banks whenit is crucial. Also the fees that are charged to small business are extremely frustrating.

A business executive earning ten times as much as my company in the first two yearsof trading will not be charged a penny because it is a private account, but I amcharged because it HAS TO BE a business account that I run. I see the banks as ahindrance to the development of small businesses.

When trading began

The local training company – a subcontractor to the LEC – provide training courseson a variety of subjects. However during the first couple of years of running a oneman business it is difficult to find time to attend for one or two days.

I was pleased with the aftercare from PSYBT and my counsellor was very supportivebut it would have been extremely helpful to have one to one focused support.

I believe that we have too many business advisors and not enough people who candirectly address the major problems that occur within start-up businesses employedwithin the LEC’s. Advisors can be fine sounding boards but at the end of the day theyare discussing the area of the business the proprietor knows the best, the idea! Ibelieve that there should be dedicated accountants and marketers working within eachLEC that are available for the business start ups to ensure that the new businesses setoff on the right foot and are given every opportunity to survive and prosper with freesupport over the first two to three years.

How many businesses fail through a lack of marketing or sound financial planningdespite having excellent ideas?

Running the business

Since my business is Internet based it is essential to have good communicationsystems. Broadband has just been introduced to Elgin (18 months behind schedule).The likelihoods are it will never be available in the village that I live simply becausethere are not enough people within the area to make it “commercially viable” (orhugely profitable) for BT. Therefore it will be virtually impossible for me to continueto work in my community successfully. I will have to move and incur the additionalexpenses involved in that. This is another huge barrier to rural trade.

At present I have to use ISDN lines, which are not ideal, they are slow and oftenunreliable and only a minor step up from the standard line.

To expand my business I see the standard of employees as being imperative. I willneed qualified computing graduates, which do not come cheaply. However due to theapparent LEC policy of big name big money funding to companies who will employcheap unqualified staff in large numbers for as long as the money is available fromthe government to do so I will not be able to afford to employ the right people tomove my company forward. This is compounded by the fact that I can only get ISDNlines where I currently live which will be totally unsuitable for developing an officenetwork

The lack of banking support is also a major bugbear. At the moment to even make adeposit at my bank is a 15 mile round trip. There are few reliable internet paymentgateways linked to high street banks that would allow a one-stop account that islocally based and easy to manage.

Bank charges are also an on-going issue for my business. Charges are negotiable butif you are not ‘in the know’ that they are you will accept the rates shown on the bankliterature. I am not naive, I know banks are businesses too but they are so risk aversethey must be stifling enterprise, particularly at the micro level.

I have been considering employing two full time employees for the past 9 months butfind it impossible to take the financial step to guarantee the level of wages required byqualified professionals and find it difficult to find the time to work through the systemto gain the necessary funding. As more and more is spent on large officedevelopments for companies that have no link to the communities, only to see thecompanies disappear as soon as the funding moves elsewhere, less and less isavailable for the development of small start up companies that have the potential togrow and bring stable, well paid, long term employment to the rural economies.

The rural factors

I am a graduate; I could probably find work in one of the big Scottish cities and makea fairly attractive salary. However I love my business, I genuinely believe there is abright future for it and there are some great development opportunities. I also love thearea I live in and the lure of a big salary in ‘the big city’ does not appeal. Ruralcommunities have to be recognised as sources of small sustainable businesses run notjust in the farming sectors but as wide a variety of business types as any other area inScotland.

The fact that my enterprise brings in such a large audience from around the worldshows how far our communities have drifted. Through the use of both the region’s“mither tongue” and by bringing an in-depth level of coverage to clubs at the heart ofso many Highland communities my business has shown the potential that still lies inthe Highlands and Grampian.

If it was recognised that investment in small rural businesses can also bring long termbenefits to the wider communities we could begin to change the feelings of despairthat has followed the degradation of the farming and fishing industries. Putting largeamounts of money into short-term foreign investments is a further insult to thecommunity and the businesses within the communities.

Running a business is extremely enjoyable. I believe that as a country we producesome extremely talented business people but our infrastructure to support the smallerenterprises could be improved upon.

EL/03/06/7



Future Skills Scotland

Submission from Future Skills Scotland attached.


1

Submission to Enterprise & Lifelong Learning Committee from Futureskills Scotland

Summary

• Futureskills Scotland welcomes the opportunity to submit evidence to the Enterprise andLifelong Learning Committee.

• This note provides information on three issues:i. the background to Futureskills Scotland, including outputs from its first year of

operation;ii. Futureskills Scotland’s draft work programme for 2003-04; andiii. as requested by the Committee, a summary of the results of the Employers Skill

Survey, focusing on the tourism industry. The results highlight the distinct differencesbetween the labour market in the tourism industry and other parts of the economy.

Background to Futureskills Scotland

1. Futureskills Scotland’s aims are to:• analyse the labour market to inform policy making;• enhance the accessibility of information about the labour market; and• work with Careers Scotland to provide information needed by its staff and clients.

2. Futureskills Scotland is part of the enterprise networks. Its eight staff are employed byScottish Enterprise (SE) or Highlands and Islands Enterprise (HIE). The Director wasappointed in May 2001 and the most of the other staff were in post by February 2002.

3. The main outputs in 2002 were:• the first survey of employers in Scotland that provides robust evidence about the

nature, scale and causes of skill shortages and skill gaps. The results are availableonline1, including the ability for users to produce results for their area or industry, thefirst time that has been done anywhere in the world;

• development of the website that will act as the central source of, and signpost toinformation about the labour market2. Launched in November 2002, the site attractedmore than 400 registered users and received more than 25,000 visitors in its first fourmonths;

• publication of The Scottish Labour Market 2002, a compendium of labour marketinformation that also identifies key labour market issues for Scotland3;

• profiles of more than 30 industries, prepared for use by Careers Scotland’s clients onpublication of the SQA examination results in August 20024;

• labour markets profiles of the 22 Local Economic Forum areas and other regions5;• presentations to more than 50 stakeholder organisations of the results of the Survey;• more than 50 briefing and training sessions throughout Scotland in the use of the web-

based applications.

Draft Work Programme, 2003-04

4. Futureskills Scotland’s work programme is prepared following extensive consultationsand is approved by an Advisory Group comprising representatives of HIE, SE and theScottish Executive. The Draft Work Programme for 2003-04 is set out in Appendix 1.

1 The main report can be found at http://www.futureskillsscotland.org.uk/uploadedreports/Skills_in_Scotland.pdf with selectedlocal results at http://apus.dur.ac.uk/projects/fss/lite.htm and the opportunity to undertake more detailed analysis for industriesand local areas at http://www.futureskillsscotland.org.uk/web/site/FSSLogin.asp?page=&type=AREA2 http://www.futureskillsscotland.org.uk/web/site/home/home.asp3 The full report is available at http://www.futureskillsscotland.org.uk/uploadedreports/Labour_Market_Summary.pdf and thesummary at http://www.futureskillsscotland.org.uk/uploadedreports/Scottish_Labour_Market_2002.pdf4 http://www.futureskillsscotland.org.uk/web/site/FSSReports.asp?subtypeid=35 http://www.futureskillsscotland.org.uk/web/site/FSSReports.asp?subtypeid=7

2

Employers Skill Survey – Key Results for the Tourism Industry

5. Futureskills Scotland’s Employers Skill Survey was undertaken between May and July2002 and involved interviews with 8,500 workplaces, including 1,500 in the tourismindustry. The results presented are representative of the economy as a whole, not only theworkplaces interviewed.

Is the Tourism Labour Market Different from Other Industries?

6. The pattern of jobs in tourism is different from the rest of the economy (Figure 1). Thereis a higher proportion of:• personal service jobs such as tour guides and housekeepers; and• elementary jobs such as porters, kitchen and bar staff.There is a lower proportion of:• professional and associate professional jobs;• administrative and secretarial jobs; and• skilled trades and machine operators.

7. The data in Figure 1 suggest that the average skill level of jobs in tourism is lower thanthe average level in the rest of the economy.

8. Compared with the rest of the economy, jobs in tourism are more likely to be (Figure 2):• part-time;• based on short-term contracts; and• seasonal.

9. In part because of the seasonal nature of many jobs in the industry, the rate of staffturnover is markedly higher in tourism – 38% per year – than in the rest of the economy –18% per year. Put differently, the ‘average job’ in tourism lasts about two and a halfyears, while the average across other industries is more than five and a half years.

Challenges Facing Employers

10. It is important to set answers to skills related questions in context. Employers were askedto specify the main challenges they face over the next 12 months. Significantly higherproportions of employers in tourism than in other industries cite attracting appropriatelyskilled staff and labour costs as the main challenges they face. The extent of the

Figure 1 - Distribution of employees in tourism & other industries

0% 5% 10% 15% 20% 25% 30% 35%

Managerial & senior officials

Professional occupations

Associate professional & technical occupations

Administrative & secretarial occupations

Skilled trade occupations

Personal service occupations

Sales & customer service occupations

Process, plant & machine operatives

Elementary occupations

Tourism Other industries

Figure 2 - Characteristics of jobs

0

10

20

30

40

50

60

More than 50% of jobs are part-time

More than 50% of jobs are short-term contracts

Workforce varies seasonally

% o

f wor

kpla

ces


3

competition is a more prominent issue for tourism businesses than in other industries(Table 1).

Table 1Main challenges faced by employers over next 12 months

Challenge % of tourism workplaces % of workplaces in other industriesIncreasing competition from within Scotland 37 22Attracting new customers 32 15Attracting appropriately skilled staff 28 14Labour costs 23 5Increasing competition from outside Scotland 18 8

Vacancies, Skill Shortages & Skill Gaps

11. A skill shortage arises when an employer has a vacancy that is hard-to-fill becauseapplicants lack the necessary skills, qualifications or experience. Skill shortages areuncommon, totalling 11,600 and affecting less than one in 25 Scottish workplaces.Compared with the rest of the economy, skill shortages in tourism (Figure 3):• affect a significantly higher proportion of workplaces; and• represent and significantly higher proportion of employees.

12. A skill gap arises when an employer judges an employee not to be fully proficient inher/his job. Skill gaps are much more common than shortages, affecting 133,000 peopleand one in six workplaces. Compared with the rest of the economy, skill gaps in tourismaffect a higher proportion of both workplaces and employees, although the difference issmaller than in the case of skill shortages (Figure 4).

Table 2Reasons for insufficient numbers of applicants

% of employers with non-skill shortage hard-to-fill vacanciesTourism Other industries

Impact of the benefits trap 34 2Geographic location of the firm 27 13Too much competition from other Scottish employers 18 7Not enough people interested in doing this type of job 15 25Low number of job seekers generally 14 21

Figure 3 - Vacancies, hard-to-fill vacancies & skill shortages

0

1

2

3

4

5

6

7

8

Vacancies as % ofemployees

Hard-to-fill vacancies as% of employees

Skill shortages as % ofemployees

% of workplaces reportingskill shortages

%


Figure 4 - Skill gaps

0

2

4

6

8

10

12

14

16

18

20

Skill gaps as % of employees % of workplaces affected by skill gaps

%

Tourism Other Industries

4

13. When a vacancy is hard-to-fill, the reason is usually not the skills of applicants but thatthe number of applicants is insufficient. In tourism, the reasons for insufficient numbersof applicants are distinctly different from those given by employers in other industries(Table 2). The reasons cited most frequently by tourism employers are:• the impact of the benefits trap;• the geographical location of the employer; and• competition from other employers.

14. When employers report shortages or gaps, the skills they most often say are lacking are‘soft’ core skills. In tourism, customer handling and oral communication are particularconcerns for employers (Figures 5 and 6).

15. While more than 40% of tourism workplaces that face skill shortages report that thesecause no particular problems, approximately one-third report:• difficulties meeting customer service objectives;• difficulties meeting required quality standards; and• difficulties introducing new working practices (Table 3).

Table 3Impact of skill shortages and skill gaps

% of workplaces with shortages % of workplaces with gapsTourism Other industries Tourism Other industries

No particular problems 43 27 30 28Difficulties meeting customer service objectives 35 51 40 38Difficulties meeting required quality standards 32 35 38 35Difficulties introducing new working practices 31 20 25 30

16. Skill gaps are more likely to give rise to adverse consequences than shortages. Around40% of employers with gaps report that they cause:• difficulties meeting customer service objectives; and• difficulties meeting required quality standards (Table 3).

Training Activity

17. Tourism industry employers are less likely than those in other industries to have fundedor arranged off-the-job training in the last 12 months. They are also less likely to conducttraining needs assessments and staff appraisals and to participate in a range of publiclyfunded training programmes, Skillseekers excepted (Figure 7).

Figure 5 - Skills lacking in applicants for skill shortage vacancies

0 10 20 30 40 50 60 70

Basic computer literacy skills/using IT

Other technical and practical skills

Team working skills

Written communication skills

Planning and organisation

Problem solving skills

Oral communication skills

Customer handling skills

% of workplaces with skill shortages


Figure 6 - Skills lacking in employees with skill gaps

0 10 20 30 40 50 60 70

Written communication skills

Basic computer literacy skills/using IT

Other technical and practical skills

Problem solving skills

Planning and organisation

Oral communication skills

Team working skills

Customer handling skills

% of workplaces with skill gaps


5

18. Almost 60% of tourism industry employers that had not funded or arranged off-the-jobtraining cited as the reason for not doing so that no training is necessary in our business.That is equivalent to more than one in four tourism workplaces that believe training is notnecessary in their business. No other reason for not undertaking off-the-job training wascited by more than one in seven tourism workplaces. Importantly, the proportions citinglack of time or lack of funds are very low (Figure 8).

Summary

19. The tourism industry labour market is structurally different from the rest of the economy:• on average, jobs are lower skilled;• jobs are more likely to be part-time, seasonal and on short-term contracts;• labour turnover is twice the average in the rest of the economy.

20. Tourism employers are more likely than others to cite skills-related issues among thechallenges they face.

21. Rates of skill shortages and gaps are higher in tourism than in other industries and affecthigher proportions of workplaces.

22. Where employers identify weaknesses in the skills of job applicants or employees, theskills that most often appear to be deficient are soft skills like customer handling and oralcommunication.

23. More than half of tourism industry employers had not funded or arranged off-the-jobtraining in the previous 12 months. Of these, almost 60% said the reason they had notdone so was because training is not necessary in their business.

Futureskills ScotlandMarch 2003

Figure 7 - % of workplaces engaging in training

0

10

20

30

40

50

60

% of employersfunding/arranging

off-the-job training inlast 12 months

% of employersparticipating in

ModernApprenticeships

% of employersparticipating in New

Deal

% of employersparticipating inSkillseekers

% of employersparticipating in

Training for Work

%


Figure 8- Reasons given by employers for not funding or arranging off-the-job training

0 10 20 30 40 50 60

No training necessary in our business

Staff already fully proficient

Can manage all necessary training on the job

No appropriate training available

Training not considered to be a priority for the business

Don’t know

Lack of time for training

Lack of funds

% of workplaces


6

Appendix 1Draft Work Programme for Futureskills Scotland, 2003-04

1. Employers SkillSurvey 2003

1. Update selected key results from 2002.2. Undertake case studies to investigate selected issues in greater

depth. e.g. soft skills; links between product market strategies andskill needs.

2. Rural Scotland Detailed analysis of rural labour market. This will involve a documentsimilar to ‘Scotland’s Labour Market 2002’ focusing exclusively onrural Scotland.

3. Supply sidesurvey

A household survey to collect evidence about the skills, views andattitudes of people of working age. This would complement theemployers’ views gathered through ESS and may update the ‘Attitudesto Learning’ surveys.

4. Careers Scotland 1. Ensuring CS staff have effective access to labour marketintelligence.

2. Gathering intelligence from CS staff.3. Providing intelligence to inform the guidance process.

5. Returns totraining

Research is required to identify the returns to employers from theinvestments they make in training their staff. This is likely to take theform of case studies.

6. Investigating‘soft skills’

The Employers Skill Survey 2002 highlighted the importance of ‘softskills’ as a source of skill deficiencies in the workforce. This researchwill examine how soft skills are addressed in other, similar countries.

7. Developing webcontent

The website will be subject to continuing development, with theaddition of new content and datasets.The site will also be enhanced by giving users direct access to researchand intelligence on a comprehensive range of labour market issues.

8. Forecasts Forecasts will be commissioned. They will then be analysed andpublished/disseminated by FS.

9. Migration Migration is of considerable interest to policy makers and it featuresamong the Smart, Successful Scotland targets. There is little robustevidence about the nature, scale and causes of migration to/fromScotland. Work will be commissioned to address this issue incollaboration with colleagues Scottish Enterprise and Highlands &Islands Enterprise.

10. Census Limited analysis of Census of Population data will be undertaken,focusing on:• the age distribution of the workforce by industry and occupation;• disability; and• ethnicity.

11. LEF profiles Updating LEF profiles12. Updating

Scotland’sLabour Market2002

1. Updating Scotland’s Labour Market 2002. This would involve ashort updating of the key findings with new data.

2. Explaining certain key issues, e.g.:• forecasts/projections of the labour market

13. Sector SkillsCouncils

Working with SSAScot/SSCs to establish a common information basefor SSCs in Scotland

14. Scottish FundingCouncils

Detailed workplan being agreed

15. Boost to LabourForce Survey

Contributing to Scottish Executive’s plans to boost the LFS

16. Graduate labourmarket

Analysing the labour market for HE graduates to provide evidence onissues such as under-employment

17. Labour demandtracking

Initially a feasibility study to determine whether it is possible to tracklabour demand patterns/vacancies in Scotland.

18. Issues papers Papers on selected issues will be published as issues arise/demandarises.

1

EL/03/06/8



House of Lords Select Committee on Science and Technology

Select Committee Report

On the 28 November 2003, the House of Lord Select Committee on Science andTechnology published its 2nd report titled “Chips for Everything” – Britain’s Opportunityin a Key Global Market. This report was the culmination of the Select Committee’senquiry into the situation and future course of the United Kingdom’scomputing/electronics industry.

The enquiry identified System on Chip and System Level Integration (SLI/SoC)technology as a key area and is central to the report’s recommendations.

The report makes a number of recommendations in the following areas:

• Government recognition;

• Design and Architecture;

• Microprocessor technologies;

• Skill needs;

• Assisting new ventures;

• Interdisciplinary work; and

• Promoting research.

In relation to design and architecture the report makes the following recommendation:

• the Department of Trade and Industry (DTI) and the Engineering and PhysicalSciences Research Council (EPSRC) urgently establish a single national researchinstitute for System on Chip design.

Institute for System Level Integration (ISLI)

Founded in 1998, ISLI is a collaborative venture involving the University of Edinburgh,University of Glasgow, Heriot Watt University, the University of Strathclyde and ScottishEnterprise. Based at the Alba Campus at Livingston, it is a Centre of excellence forsystem level integration and System-on-Chip technology providing business andacademic communities an opportunity to work together. ISLI embraces education,training, research and support for industry.

2

It is the recommendation regarding the creation of a single national research institutewhich the ISLI has concerns about and which they believe could impact heavily onScotland’s work in System-on-Chip technology.

Scotland has had a 5-year lead in promoting System-on-Chip technology through theAlba project and ISLI’s activities. ISLI have written to Alex Neil as Convener of theEnterprise and Lifelong Learning Committee and indicated their concerns.

In particular ISLI argues that:

• the report makes little mention of Scotland’s already established Centre fordeveloping this technology;

• the implications of establishing a parallel UK Centre in England could lead to bothspecialised staff and funding being attracted to England in what is a very competitivemarket;

• this will result in Scotland being at a competitive disadvantage in this technology andseriously undermine Scotland’s economic development agenda as companies areattracted south.

ISLI indicate that, given their already established facilities and previous experience inthis area of technology, it would be beneficial for the UK Government to consider givingScotland a leading role in taking forward these proposals.

The Chair of the House of Lords Science and Technology Committee, Lord Oxburghwas invited to give evidence to the Enterprise and Lifelong Learning Committee, but isunable to do so, due to meetings of his own Committee.

However, his view is that the points made in the report regarding the gap between ISLIas currently constituted and the UK-wide System-on-Chip centre as recommended in thereport remain valid. That is, that there is a case for a UK-wide centre, and one that ismore industry-facing than the current ISLI arrangement.

A debate on the Select Committee report took place on 14 March. It is understood thatthe DTI is likely to respond to the Committee report in the weeks following the debate.

Recommendation

The Committee is invited to consider writing to the DTI Minister, Lord Sainsbury,to:

i) make him aware of their concerns regarding the impact of the SelectCommittee’s recommendations on the work of the ISLI;

ii) recommend that serious consideration be given to establishing a UK widenational research institute in system-on–chip design based at the ISLI.

Alex NeilConvener

EL/03/06/9



Institute for System Level Integration

Submission from the Institute for System Level Integration attached.


Institute for System Level Integration response to the House of LordsSelect Committee on Science and Technology

Report

“Chips for Everything”Britain’s Opportunity in a Key Global Market

Session 2002-032nd Report dated 28 November 2002

26/02/03

Purpose of this briefing paper

This paper is intended to provide a view of the recently published House of Lord’s report“Chips for Everything” from the perspective of senior management at the Institute for SystemLevel Integration.

The report deals with the current situation and future course of the United Kingdom’scomputing/electronics industry. We fully agree with the Enquiry’s findings and it makesmany sound recommendations.

The Enquiry identifies System on Chip and System Level Integration (SLI/SoC) technologyas a key area and is central to the Report’s recommendations. These findings reinforce thosewhich led to the formation of the Institute, and to the development of the Alba Project byScottish Enterprise in 1997/8.

They provide us with a major opportunity to participate in and give leadership to the proposedprogramme contributing five years of valuable experience in this field to create the UK-wideinitiative called for in the report.

Background

The House of Lords Select Committee on Science and Technology published a report entitled“Chips for Everything” in November 2002. The report resulted from an enquiry, which startedin October 2001, with public hearings in the summer of 2002. It was conducted by thefollowing members of the House of Lords –

Lord Flowers, Lord Freeman, Lord Hunt, Lord Lewis, Lord Menthuen,Lord Mitchell, Lord Oxburgh, Lord Patel, Lord Wade, Baroness Wilcox.

The Select Committee’s specialist adviser was Prof. Steve Furber, Professor of ComputerEngineering, Manchester University. The Committee made many visits to UK and overseasestablishments, a seminar was held at the Royal Society and numerous organisations gaveoral and written evidence. Scottish Enterprise gave written evidence to the Committee,including information on the Alba project, whose objective is to bring SoC design toScotland.

Although the Enquiry initially addressed the future for computing and its implications onsilicon chip technology, in particular CMOS technology, it finally centred on future worldtrends in chip design and architecture recognising the enormous density of components able

to be contained within a single chip and the consequent complexity of systems now able to beimplemented on one chip.

The Report of the Enquiry, which is to be debated in the House of Lords on 14 March, mademany recommendations with two crucial proposals relating to increased Research Counciland EPSRC funding of research into System on Chip design and the establishment of a singlenational research institute for System on Chip design.

Report findings and recommendations

The House of Lords Report makes sound recommendations, particularly with regard toincreasing funding for research in system-on-chip design. We welcome and support that.Silicon design research has been severely under-funded in the past, in competition withprocess and device technologies and large-scale computer science. The Report confirmsour view that the portfolio of grants in SoC-relevant design held by EPSRC is too small inrelation to the importance of this technology to the UK.

It also recommends the establishment of a single national research institute in system-on-chip design. The danger is that this would duplicate ISLI’s function and we believe thisrecommendation needs more detailed consideration. A single organisation could verywell be appropriate, allowing co-ordination of the proposed UK research programme, buta single site could be antipathetic to the achievement of the wider goals of the report.Notably, it could suck criticial resources from existing organisations: it might have poorengagement with the widely dispersed SME community: and it might not be responsive tolocal factors. Moreover, in design, there are no major economies of scale to be gained bya single-site operation.

We agree that the shortage of academic staff is a major impediment to the growth ofresearch and teaching in SoC-related technologies. Universities have some flexibilitythrough their appointment system to adjust salaries and to be competitive with industry:but the lack of research funding makes it very difficult for new academics to establishinternationally competitive research groups. There are severe risks to Universities in theappointment of industrially experienced staff because of the RAE-driven publicationagenda. The implementation of this recommendation cannot be divorced from therecommendation on funding, and again the complexities of the problem demand furtherstudy.

We also, of course, agree completely with the need to increase the number of engineersskilled in the methodology of system-on-chip design as the providers of the world’s firstpostgraduate degree programmes in this technology.

It is disappointing, therefore, that the Committee did not take more account of the Albaexperience in gathering its evidence and formulating its conclusions. The worldwidedownturn has not generated as much growth as projected in the system-on-chip designindustry in Scotland, but it has created a richer electronic design industry. And despite itslimitations, Cadence’s facility in Livingston is the largest SoC design organisation in theUK. The Virtual Component Exchange is unique in the world in creating a trading floorfor design intellectual property, and ISLI has the largest population of graduate studentsstudying system-on-chip design and system-level integration anywhere in the UKincluding a very significant number of overseas students. The Alba project is aninternationally-known brand, and its approach to integrating industry, education &research and business process improvement has been taken up elsewhere in the world andeven more widely studied. It would be ironic if its experience were to be ignored in theUK.

Implications of failure to be involved in this initiative

Our primary concern is for the future of ISLI and for our ability to play a part in thedevelopment of a UK-wide initiative. ISLI has been unable to expand its R&D activities as itwould have liked through lack of spend in this area by EPSRC. Nevertheless we have activelyencouraged UK-wide research links through our Engineering Doctorate programme and havecreated a formal partnership with Lancaster University. Our professional developmentprogrammes are marketed throughout the UK. There seems little point in creating anotherInstitute in competition with ISLI. Our objective should be to roll out ISLI to other parts ofthe UK.

Otherwise, ISLI will be faced with an extremely difficult competitive position and willprobably have to close. The new organisation will suck very scarce resources – funding andmore importantly people – away from Scotland and into the new Centre. The economicbenefits of building the Alba initiative around an education, training and research centre willbe lost.

Alba will also be undermined as companies are attracted to the magnet of the proposed newCentre. Far from giving UK-wide support to the electronics industry we will return to theimbalanced position of a decade ago.

The Report’s reference to ISLI – Alba Centre – Livingston

The report makes a single, brief reference to Scotland’s Alba Centre and ISLI. It states thatthere is some overlap between the proposed single national research institute and ISLI. Itreports that Alba and ISLI have a “mission to develop Scotland as a leading world centre inmicroelectronic product design and technology”implying a regional focus. Whilst it is truethat Alba’s mission must be to enhance the microelectronics industry in Scotland thisapparent territorial limitation cannot apply to ISLI.

It describes ISLI as a “university based initiative”, implying that “ both direction andsignificant funding from industry” are not features of ISLI. The proposed new institute wouldbe a “free standing centre”... “with a significant core of full-time professional staff” and“above all, it would have an explicitly UK-wide reach.”

This brief description of Alba and in particular ISLI is completely misinformed.The micro-electronics industry, in particular in relation to System on Chip and System LevelIntegration technology, is global and operates world-wide. ISLI is achieving internationalrecognition in its specialisation and has therefore established relationships across the world.From its inception ISLI has enjoyed close links with industry as evidenced by numerouscollaborative industry projects (see Current status of ISLI) and senior industry representativessit on ISLI’s board and policy committees. Industry has so far contributed over £2 million infunds and equipment to ISLI and strongly influences the Institute’s strategy and technologyresearch objectives.

We can justifiably claim to operate across the United Kingdom and many of our industrypartners are located in England and Northern Ireland.

Current status of ISLI

ISLI has expanded considerably since its launch in 1998 and is delivering on its mission.Starting with eight MSc students it now has over 100 full time MSc and Engineering

Doctorate (EngD) students. Staffing levels have expanded to include a growing SoC/SLIdesign team and many industry-based projects are ongoing throughout the UK. In addition toScottish industrial projects companies in Maidenhead, Malvern, Bristol, Northwich andBelfast have projects active at ISLI. At the present time eight more English-based companiesare discussing future projects in partnership with ISLI. It is also particularly relevant that our25 ongoing industry projects include collaboration with 7 start-up companies wishing todevelop SLI/SoC technology based products.

Over the past two years we have been building overseas contacts establishing our image as aninternational centre of excellence.

ISLI was set up with academic foundations because the shortage of skills was seen to be themajor constraint on growth of the industry at the time. We have successfully delivered theeducational part of the agenda and believe our output of graduates this year will be the largestin the UK. However, ISLI was never envisaged as a purely academic organisation and isstrongly industry facing.

It was assumed that ISLI’s research programme would be funded through the normalchannels, i.e. EPSRC, DTI, EU etc. No additional funding was provided for this purpose.Consequently research at ISLI has been hampered by the lack of funding in this area pointedup by the House of Lords report. We have not been funded to bring industrial staff into theInstitute to carry out research. We would certainly take this course if adequate fundingbecame available.Where ISLI has been successful in R&D, however, it has done so incollaboration with industry. All our Engineering Doctorate students spend the majority oftheir research time working with their industrial sponsors. As the only UK centre for EngD inelectronic design, we can claim to have a truly industry-facing approach to research.

ISLI’s activities are not confined to Scotland: EngD sponsors come from all over the UK, wehave brought an English University (Lancaster) into the ISLI partnership together with theBolton Institute and more universities are in dialogue with us. The Continuing Education forElectronic Systems Integration (CEESI) group demonstrates the level of UK co-operationwith ISLI which has contributed 50% of the total masters degree course material to thepartnership. Members include the universities of Surrey, Southampton, Bradford, Bolton,Northumbria and Sheffield together with industrial partners. We are also playing a significantpart in formulating the research programme for the packaging centre which the North WestDevelopment Agency proposes to set up in Liverpool.

We believe the fact that 50% of Motorola’s NTSG SoC design group now comprises ISLIgraduates testifies to the fact that educationally, we are also an industry-facing organisation.

ISLI has also identified the lack of industrially relevant skills within the academic sector asbeing a major impediment. Consequently it is now expanding its internal R&D activities withexperienced industrial designers, rather than academics. The combination of expertise(academic and industrial) creates a powerful opportunity for our ability to work creatively andclosely with industry. But reaching this position has been an evolutionary process, and hasbeen dependent on establishing this case with Scottish Enterprise.

ISLI’s proposals and response to the Report

The proposals to increase the UK’s R&D spend in SoC design should be implemented.

ISLI with Scottish Enterprise should be given the lead role in taking forward therecommendations of the House of Lords report, reflecting the leading position they alreadyoccupy in delivering this technology.

ISLI should become a multi-site UK operation, headquartered in Scotland but with Centresacross the UK, in the Bristol and Manchester areas for example.

ISLI, in its lead role, will establish a unified research programme, steered by industry andsupported by a mix of academic and industrial projects run at the Centres and on collaboratingUniversity campuses. As a result, the UK will benefit from the ISLI marketing brand which isnow well known throughout the world.

SUMMARY

ISLI became aware of the existence of the Enquiry very recently when the Report wasreceived. In our discussions with industrial representatives around the UK it is clear that mostare not yet aware of the House of Lords Enquiry or have received the Report.

We will be provided with a major opportunity if the House of Lords Select Committee ispersuaded that ISLI’s function and 5 years of experience is fully relevant to their proposals.We envisage a single UK organisation, located on a few sites, running a national programmeof R&D, education and professional development in system-on-chip design with each siteclosely coupled to their local industry. ISLI’s expertise in addressing most, if not all, of theobjectives set out in the House of Lords report will enable this Institute to be deliveredquickly to the benefit of the UK as a whole.

If, on the other hand, Scotland’s initiative in system-on-chip design is sidelined, we shall befaced with internal competition and a lengthy period of planning blight whilst regional vestedinterests fight to host the national centre of excellence.

We seek the support of the Committee in ensuring the following:

i. We believe that the Executive must participate in the Government’s response tothe House of Lords report, pointing out in full the achievements of the Alba/ISLIinitiative and the importance of adopting a UK-wide solution to the issues raised.

ii. The Executive should strongly recommend a leading role for Scotland in takingforward the recommendations of the report. ISLI would be the best vehicle forachieving that in view of our experience of delivering most of the House ofLord’s agenda over the past five years.

iii. The Executive must ensure that any spending decisions arising from the Reportare applied UK-wide, and funding is available equitably to new and existingorganisations.

EL/03/06/10



“Chips for Everything”

The Executive Summary from the House of Lords Select Committee onScience and Technology Report – “Chips for Everything” is attached.


el/03/06/a enterprise and lifelong learning committee … · listed in this brochure. these...

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