Good morning and welcome to the first meeting of 2023 of the Economy and Fair Work Committee. Our first item of business is the decision to take items 4 and 5 in private. Our members are happy to do so. Our next item of business is an evidence session on the outlook for business investment, focusing on businesses working in the renewable sector. This is to provide members with an overview of the outlook for the renewable sector in Scotland and look towards the challenges of 2023. This is the third and the seas of meetings we are having to look at the current economic pressures facing businesses. I welcome Johnnie Clark, managing director of ITP Energised, Claire Mack, chief executive of Scottish Renewables, John O'Sullivan, director of onshore wind and solar, EDF Renewables and James Reid, operations director of FES Energy. If witnesses and questioners can keep their answers as short and concise as possible, that means that we will get through as much as we can this morning. First, there will be a range of questions from members, but focus on the recent budget announcement that we had in Scotland. Obviously, there are significant pressures on the Scottish budget and many sectors are feeling constraints. Renewables has recognised the sector that requires investment and growth. We will be interested in your reaction to the budget. We will have the cabinet secretary here next week, and we will be interested in whether the budget has made enough commitments. We also had the climate change committee report that came out recently that said that Scotland was starting to fall behind in some areas and that we needed to see significant investment in pace as the budget delivered enough to do that. Mr Clark, would you like to come in first? I will come to Claire. Thank you very much and good morning everybody. Thank you for the opportunity to give evidence. I suppose that in high-level terms there is always more that we would like to see being done, but recognising that there are obviously many pressures on the budget. From my perspective, the biggest challenge for us is around attracting and developing our talent. Seeing investment into a pipeline of skills development is what we really need to see for the long term. Bear in mind that we are talking about investment into a sector where the infrastructure is operational over decades, takes months and years to develop and then is operational for decades. It is definitely a long-term view that needs to be taken. In summary, it is good to see the progress that is being made. Obviously, there is the consultation out on the renewed energy strategy, which is good to see some of the content in that. Direction of travel is good. It could always be more. Claire, is that a view that you would share? There was the announcement around the hydrogen action plan funding for that and funding through non-domestic rates that were targeted on the sector, but skills is an issue that is often raised with the committee. Is that recognised as the key component enough by Government? We are talking about renewables investment. Is it more focused on the sector and maybe not enough into the pipeline in terms of people and skills? As everybody knows, we are in quite unprecedented times. We have an incredible project pipeline in renewables, one greater than we have ever seen before across a wider range of technologies. That comes with skills demands in there. In general, one of the key pressures just now is the wider business environment and answering up to that kind of pipeline in terms of getting projects moving. We were really pleased in terms of the budget to see remaining focus on low-carbon projects and support for a renewable sector. Genuinely, with the pipeline that we have, it is the greatest industrial opportunity that we have in Scotland today. It is really important to recognise that there will be certain amounts of organic growth that will go along with that, but other elements of it that will need to be managed and will need to rely on some public sector resources such as skills development. Some relatively unseen elements of that are things that might not necessarily come to mind front of mind first of all. We were pleased to see a settlement for local authorities—an extra £550 million—because of our reliance on local authorities to enable our projects through the planning system. The planning system is hugely important to us and research that we had done most recently, around about 2020. In that decade, we had lost about 20 per cent of our personnel in planning departments. Again, they are a key enabler of projects. Being able to get funding is really important—that is the business environment point—but planning is also one of the key enablers of projects. We are keen to see planning protected as part of an economic strategy for Scotland. We see that things are coming together as part of the jigsaw that will create the projects and the pipeline that will then drive economic benefit, which will hopefully improve our overall budget situation. We need to be quite clear about the pressures that are on local authorities and where their choices lie. Perhaps planning might not be their priority, but something that is keen to highlight to the committee as a key enabler of the economic growth that we are all looking for. What best was in relation to local authorities with the impact of inflation? There is an increase in the funding and the real-terms situation is different. How does that affect your sector and the impact of inflation on rising costs? You are absolutely correct. The projects in the renewable sector go through different phases. I have talked about planning. They sit on someone's desk at that point in time, then they become a finance project and a construction project at some points in time, and we face exactly the same pressures as everybody else in the construction sector. I am sure that you will have heard from them about commodity price increases. Things such as steel OMS report, an increase in prices of steel is 70 to 100 per cent, absolutely critical component of our projects. Things such as solar PV panels, which had been a real success story in terms of cost reduction because of serial manufacture and various other elements and ease of installation. Effectively, the price increase of about 10 to 15 per cent on those has erased that cost reduction, so we have come back to the start again on those. We are in this perfect storm. It is not just about commodity price increases. Supply chain constraints as well are really starting to impact and bite on renewables projects. The way that our projects come together and are financed generally will work between delivering electricity and generating electricity for the merchant market, which means that they hedge a specific price in advance, and nobody could have expected the huge increases that we have seen there, but also hedge in another way through the contracts for difference market, which offers a fixed price for the product, which again many were not able to insulate themselves against that increase in costs and bid into the auction at a specific price based on what they felt was going to be the on-going stability that we have seen for the last decade in the UK. We are in a very difficult place in terms of that perfect storm. The other areas where we are starting to see real change are again in that supply chain space because of high demand, not just prices going up but availability. It is very difficult, so we are starting to see unusual things like up-front payments to secure supply chain is something that has come in as well as those increased costs just for commodities and labour. You have touched on a number of areas that other members will look at in more detail, but I might invite James Reid if James has anything that he wishes to add. The initial question was around the Scottish budget and whether there was enough, if you knew what came out the budget, if there was enough that came out the budget to support the sector and to increase the pace of change that we need to see. I will come to James and then John, if there is anything that you want to add, I will invite you to come in after. Similar to John and Claire, it is positive in terms of the investment and funding that has been suggested through the budget. One of the key issues that we have had historically on show projects has been the time frames that the funding has been available for, and a lot of the time that has been linked to being open for a year. That has now changed, which is important. Keeping those funding calls open is key to help those projects grow. I still see an issue with private clients. Funding is very good for public, however. If we have industry, for example, it is how we encourage and attract the investment that we need to get involved. I have still seen a nervousness for some parts of the market to invest in projects, and a lot of that is down to the current cost market constraints. I think that there are positives, but I still think that there is a effect to them in terms of their hiring projects. John, if there is anything that you would like to add to what has been said already, I will invite Fiona Hyslop to ask questions. Thank you very much. Good morning, everybody. On behalf of EDF renewables, I probably do not need to introduce EDF, but I will say that we are one of the leading UK island renewable developers. Globally, we want to be one of the world's leading energy companies, so we are very happy to be here today to support the Scottish Government's ambitions to hit net zero by 2045. I will not add anything to the budget question, per se. My colleagues have covered that, but I will say that there are knock-on effects and other areas where we could see that partnership approach with the Scottish Government helping to relate to budgets. For example, in terms of grid, that is one of our challenges. Obviously, working with grid and seeing that investment in the grid, as Claire said, that will help to unlock the projects that the budget needed there, even if that is not directly with the Scottish Government. There is a role there for enabling that. Likewise, we have already mentioned the route to market and contracts for difference. In terms of budget, we could be more ambitious working with the UK Westminster in terms of setting more ambitious budgets there to help to unlock the pipeline of projects that we have in Scotland. There will be other members who come on to issues of skills and jobs, but as a Mid Scotland and Fife MSP, I do know EDF renewables well as a company. How do you find placing contracts in Scotland? What are the challenges in doing that? We want to see more contracts based in Scotland and more communities getting the benefit of renewables at the same time as making the shift from fossil fuels over to renewables, which is important for our climate change targets. We want to see the benefit of jobs and skills. Other members will go into more detail, so a brief answer would be helpful. What is it that you need in order to invest more into Scotland and local communities? The brief answer is that we are very aligned in that we would like to have that investment in the supply chain in Scotland. We are working very closely with our supply chain and certainly urging our key contractors and suppliers to wherever possible invest in Scotland and create those jobs in Scotland. I think that that might be a good example. I will come on to the examples maybe later. Please give the example just now and then I will invite Fiona to come in. Okay, certainly. The NNG offshore wind farm project, I am sure that you know well, we have, I think, over 50 jobs in the local area that will come about as a direct result of that wind farm and the operations and maintenance phase. I think that there is a large recruitment campaign this year planned for that. It is maybe too early for me to comment exactly on how easy it is for that, but certainly we are seeing a great lot of interest already in those jobs and will. We are very hopeful that that will go well this year. A genuine, tangible commitment for those 50 jobs around the NNG project in Eymuth. That is welcome. We do want to see more jobs, particularly in the area that I represent, especially in the leave-mouse area, which is an area that did have a high employment rate and lost a lot of jobs through industrialisation. Renewables does offer a potential for them. We want to see that fully realised. I will bring in Fiona Hyslop. Thank you for joining us. I want to cover an outlook for investment for businesses, looking at current constraints and what you see as opportunities. First, I will stay with John Sullivan from EDF. I will look at the issues around the UK autumn statement and the latest support for businesses in energy, and yesterday's announcement particularly on the business support for energy. As energy companies themselves, I do not know the implication of energy use for you, but it would be helpful to get a sense of that, or is it more in the supply chain that you are seeing the knock-on cost impact? What are the current constraints around business investment for you as a company? Great question. Clearly, we have touched on the cost increases that we are seeing. It is fair to say that, as a business, we have great ambitions. For Scotland, we have a great pipeline. I think that we have 500 megawatts in operations at the moment, another 500 or so in construction, and at least another 500 to one gigawatt in planning in our pipeline. We have a substantial amount that we would like to contribute to Scotland and the net zero targets. The reality is that it is a tough time. All the cost increases on inflation and all the raw materials that our suppliers, as you rightly say, are struggling. It is no secret if you look at the wind turbine manufacturers and their annual results, they are not very positive. We then need to work together with the supply chain, with the developers, the owners and the Scottish Government in more of a partnership approach to try and release those projects to offset those costs. Are there any direct impacts for you as a company of the increasing business at the energy cost or is it more from the supply chain? The interesting thing for us is that the impact is that there is more work for us to do for our clients, supporting the likes of John and developers and other utilities. We do about 30 per cent of our revenue from corporates and industrials. Not surprisingly, we are seeing a lot of approaches from corporates and industrials that are struggling with the increasing cost of energy and looking at how they can hedge that and go back to the point that James made earlier. Obviously, they are then looking at how they can finance those because that is a significant capital cost to them as a business, which will ultimately support them from an operational point of view in terms of giving them security on their energy costs, which is what a lot of them are trying to do. The short answer is that we are seeing an awful lot more work opportunities as a result of those pressures, particularly on energy costs. It is a double-edged sword, I suppose. The next challenge for us is how do we resource that? It is interesting because we are looking at different sectors, and a hospitality or other sectors that have a different impact. What is the current status in terms of constraints in relation to investment before I move on to opportunities? In the investment environment, the outlook is quite poor. That is largely of macroeconomic issues, but there are some things closer to home as well. We need to make the environment as good as possible. That is the key message here—to make the environment in Scotland as good as possible. John, James and I will also speak to you about projects. There is plenty of money, and there are plenty of projects that are getting them together and getting them in the right places. We are facing huge competition from other countries. I spoke to a member yesterday who was talking about creating operational bases. In Poland, they face no business rates at all—zero business rates, which is a huge difficulty. We all understand that there are certain necessities of public finance in there, but when you are sitting and stacking up against countries that are close enough to us, you have to be very mindful of that international competition for projects and for finance. That is a really key point. The other thing that is linked to the first question is what do we need. There is a structured support programme. I talked about organic growth, but there are also some managed elements of that. One or two of the areas that I think I would highlight is for heat. The CCC has identified that as its review of the Scottish Government programme of work. Our programme of work in terms of heat decarbonisation is far behind where it needs to be. That is a very focused set of structured projects that we could bring together that create a portfolio that is attractive to investors and that creates that certainty of a longer-term programme, which would be very helpful, particularly a rural heat fund. Areas in which we know that we have to act fast and, again, hopefully hit not just business growth but reducing costs to consumers. That is a key part of the macroeconomic picture that we are seeing, which is inflation caused by the additional costs on households. The other area that we have touched upon in the past is support for the SME supply chain, particularly in renewables. The SME supply chain in Scotland is a huge component of the Scottish economy. We have, obviously, business support agencies through SOZE, through SE and through HI, but we feel that there is an opportunity here for a much more focused programme that does very much focus on the SME market. We are looking at—I see this even in my own business—I run an SME and, in order to meet what my members want, I am having to grow very quickly. That comes with quite a lot of pressure for small businesses who do not necessarily have the internal resources that you need to look at your finance systems, to grow your management capability and to think about what a rapidly expanding business needs is. I think that there is something very important that we could do to help to support our small to medium-sized enterprises to grow quickly, to meet that pipeline and meet the opportunity that we have. The other area is ports and harbours, which is absolutely critical in terms of function towards growing areas that can effectively operate as silicon valleys. We are awaiting ever more baited breath announcements on green ports and free ports, because those will be important drivers of not just the port infrastructure itself but of attracting those innovative and entrepreneurial SMEs. We have a fabulous backbone of those in the energy industry here in Scotland. I am being able to really capitalise on that and then translate that into the people and skills development that we are looking for. Fiscal incentives are really important. Johnnie touched on that. There are certain impediments to people improving their building structures and to adding things like solar on to projects because it enhances their business rates liability. We are keen to see that pulled away so that we can really genuinely push forward on decarbonising industry use. Scotland has taken the lead in so many different areas on decarbonisation of industry. Another really key area is to see real movement quickly and to come down to real detail and fast-tracking of projects. A lot of that sits within the planning system. I am delighted to see the level of detail and care that went into the NPF4 recently and due to come back to Parliament this week. We were very pleased to see a number of the key messages that the industry had put forward into that document and put down on paper, which will genuinely help us to build in more areas sensitively, but also be able to build at a quicker rate. That is the key thing. The resourcing of planning is really, really important into that rate of build. The same was you, Claire. We just had the energy strategy and the just transition strategy that was published yesterday. We were looking at opportunities and what you see within that. Maybe you were talking about issues for SMEs and perhaps we, as a committee, were focused on just transition. Maybe you need to look at that, but can you give an initial reaction so that that would be helpful? Absolutely. Again, we were pleased to see the energy strategy that was published yesterday and alongside the just transition plan, those things go together. People are at the heart of the energy transition here in Scotland for obvious reasons. We have driven the energy economy of the UK for the last 50 years and there is no reason that that should not get bigger and better. That was very much a message that came through in the energy strategy. It is great to see increased ambition or holding to ambition as well. Increased ambition across offshore wind and onshore wind, the two key employers here in Scotland, to see increased ambition very, very helpful there. Also delighted to see a conversation about a target for tidal energy. That again is a really earlier stage opportunity, but we have seen two projects come through to commercial viability through that contracts for difference mechanism. A brilliant opportunity there, not just for here in Scotland because we have a massive coastline that we can take advantage of, but companies here in Scotland are producing mobile and modular technologies that can be easily exported in the tidal space. To work on a target for tidal is really, really important for tidal and wave projects as well. Earlier stage, but there, that opportunity there for the taking, particularly in terms of supply chain, that industry in particular has continually spoken of and demonstrated commitment to local supply chains and something that we should absolutely capitalise on. Thank you very much and maybe if I can give James Reed an opportunity to come on on this, if you've had a chance to reflect on the energy strategy and the just transition strategy that you published yesterday, but give you an opportunity to talk about investment outlook opportunities but also if there's anything you want to pick up on current investment constraints for your business. I haven't had the chance to read the draft strategy and I have actually seen statement on it, so I read that last night. Suddenly, as a business, we see the renewables and the energy industry and market within construction being all about our house area of growth for the business going forward for the next couple of years. Anyway, as it is, John and Johnny both touched on some really good barriers that might stifle that investment. The big one is grids, unfortunately. That is a big problem that we have right now. Most projects that we're encountering, something onshore solar and battery, is being heavily constrained by the grid and the constraints in the grid. For example, what three projects there now, what's academic pounds that are over the last three months, one's a heavy industry user, one's a hospital and one's a two industry users, and it's essentially being put on hold because the grid has saturated and produced a full constraint. Unfortunately, from my perspective, I would love to invest and bring more people into the business, which I'm currently looking to do, but I also need to be mindful of the risk of those projects going forward. They might fall off or they might not happen because of external constraints. That is a key barrier that needs to be addressed. John, you made a good point on the skills front. One of the key I see is the apprenticeship levy and access to that. That's more from an upscaling perspective. For example, we've employed six graduate apprentices this year. I went through a process of trying to get my project managers on to electrical engineering degrees to try to upsell them in the renewals market for them. It's incredibly difficult to find universities that are able to offer apprenticeship levy supported university courses. However, when I looked down south in England, it didn't seem to be as much of an issue, albeit that it had love in England so that it wasn't an option. If that could be improved and assisted, that would help upskilling the existing industry. I know that colleagues might want to cover more skills and training issues, but if it's okay with the convener, they might bring in Johnny Clark on the energy strategies. Is there anything that you want to talk about in terms of investment outlook from what you're aware of? My overarching comment would be great content, great aspiration. The devil in the detail is attracting the investment, the inward investment, to make it all happen. That includes organisations such as the ones that we represent and others at all scales. Overwhelmingly, the clients that we work for—the capital—is not coming from Scotland and much of it isn't coming from the UK at all. In fact, the investment is coming from overseas, so keeping Scotland an attractive place to invest and also an attractive place for people to be based to deliver the potentially huge pipeline, notwithstanding all the barriers that we all see on a day-to-day basis. That's absolutely critical. Taking it into an action, a detailed action plan, is fundamental. Okay. Finally, I will give John O'Sullivan an opportunity to reflect on the opportunities for investment outlook, informed potentially by, if you have a chance to look at the energy strategy. Yes, I have. I think that we have been invited to comment formally, so I won't prejudge that. My personal reflections on the energy strategy and just transition plan are that it is very positive. I think that we will be very supportive going forward. I think that maybe the one bit that hasn't been particularly focused on was around the clear targets that are being set in this. We do believe that those will be really valuable for us as an industry. We can align around the key targets in terms of megawatts per renewable technology for onshore wind or offshore wind. That will really help to give us confidence, give the market confidence to make those investments, that we can manage those risks going forward. We would welcome the direction that this is going in. You have partly preempted Graham Simpson's question, but I want to invite Graham Simpson to come in. I do appreciate Jamie Hunker-Johnston as wishing us a supplementary, but I'll let Graham come in first to see us a question on targets and then I'll go to Jamie. Thank you very much, convener. It was really in response to what James was commenting on solar. I think that most committee members are very keen on solar. James, your sound is not that great, so I apologise that I didn't pick up everything that you said, but you seem to be saying that not enough is being done to bring forward solar projects. If I picked you up right, you were saying that there is a number that you are aware of that are at risk of not proceeding. I just wonder in terms of the energy strategy announced yesterday whether there was enough in that for people who have read it around solar. Let's stick to solar first. I've got an interest in hydrogen, but let's stick to solar. James? Yes, Graham. Sorry, I apologise for that. Can you hear me okay now? We are a contractor and that is our business, so we are naturally the cold face. We tend to see whether projects go ahead due to inflation pressures, market issues, things like that. However, the common denominator right now in most projects that we see is an issue is the grid. That does seem to be one of the real values that we are finding. We are only a small part of the wider renewables industry. I don't know if John you would be able to comment on that as well in terms of what their experience is. However, in recent times, since the energy increase, the price increases, we have seen a massive influx in inquiries. People want to invest in solar and to offset what their electricity usage is and improve their carbon emissions. However, the problem is that, in some instances, they just cannot do that because the grid does not allow them to do it because it is constrained or it is cost-prevative. For me, some areas will be plans from Scottish Power and SCC for the self, in which they will have upgrades and upgrade plans that might be four, five, six, seven or eight years away. However, when we look at the energy targets in 2030 or to the last night, it is eight to three months away. How many projects can we get built by then? Thank you, James. The problem for you is the grid. In terms of the strategy that was announced yesterday, Claire, you have read it. What is your thinking about what it has to say or what it does not have to say about solar? Solar is a really important component of the whole story. It is one of the most accessible, renewable technologies and one of the most scalable. It can work at a domestic level and all the way up. One of the conversations in there is about community benefit for solar, which is new. Community benefit, as it stands at the moment, contributes a huge amount to the Scottish economy. A million pounds a month comes in and community benefit. How that is distributed is variable. There is a good conversation to be had in there. If you are going to look at that system all over again, there are certain characteristics that you would perhaps view differently given our current issues in terms of domestic costs for energy as well as business costs for energy. You would potentially be directive about where you might put some of that money. Energy efficiency measures would be a really important part of that conversation. The industry will have its chance to comment on that. Similarly to John, I do not want to pre-empt what industry said. I have not had a chance to speak to them about that, but I come back to solar as a relatively underutilised technology here in Scotland. For lots of different reasons, there are grid issues in there. Solar is quite an interesting technology. If you speak to national grid, one of the ones that they have found more challenging to integrate on the system is less in terms of historical records and how it generates. We have good records for wind, but there were not so many good records for large-scale solar, and it has been one of the key issues that they have managed down in the south of England. Now that we are in a different place, we have a system that we have worked out how to build volume in terms of generation is integration. Again, that is where Scotland has some key technologies that will help us here, such as pump storage hydrol. In terms of rolling out more solar, it is things like permitted development rights, particularly for businesses, to allow them to be able to offset some of their energy costs, which is not necessarily a grid issue, because you would be using it on-site. Again, there is quite a lot of detail in the regulatory space that needs to be worked through about removing costs in there to make it effective and efficient for businesses to do that. Again, pushing that decarbonisation of industry agenda really, I think that solar is a really important part of that. Again, the business rates point that I made earlier, there are some enabling factors that would genuinely help us to link solar to other objectives such as decarbonisation of industry and potentially possibly hydrogen, if that was the route that we were choosing to go down with it. It is an underutilised technology. There are some barriers that are within the gift of the Scottish Government to help to enable it to move it out. If you think about it again, the Scottish Government has been very active in energy efficiency and funding of energy efficiency at a domestic level. There are certain upgrades that businesses would need to make in terms of roof space. If you are going to mount it on roof space, sometimes there are other investments that need to go alongside that, which will bump that capital investment issue and look at the programmes that we have and perhaps extending some of those to help to support that, but also extending that to households again and committing to continue that funding to help households to make better use of electricity to offset their living costs and be that through helping them to move to electric heating to be able to make best use of the solar that they have, enabling capital investment from households in smaller-scale batteries to enable flexibility from a product like solar. I would have to go back and check the figures, but the one that sits in my head is referring £4,800—you can basically kick a house with solar. If you look at that compared to what the UK Government is now contributing to households in terms of trying to manage and mitigate energy costs, what would be the better long-term solution? Potentially that is something that we need to have a really clear conversation about. I do not know if any of the witnesses want to say anything, but I do not feel that you have to, but no, that is fine. That is great. I remind the panellists and members that I have a number of questions to get through this morning. If answers and questions could be kept concise and possible, that would be helpful. If you wanted to come in. Thank you. I just wanted to confirm that as part of EDF and EDF renewables, we have direct plans to invest in solar in Scotland this year. We have a number of projects in our pipeline, mainly rooftop solar on commercial industrial scales, so some of those are companies that we are working with. I probably cannot share exact details right now, given that there are some contract negotiations on going on, but we are very hopeful to be able to invest in solar in Scotland this year. I agree with what everybody said in terms of the grid constraint. The point that I would make is that it is not just the actual physical infrastructure, it is also the capacity within the DNOs and the transmission operators in terms of their people and their resources, so it is infrastructure and people. The other flag is that what we are starting to see is that, in order to deal with that, some of our clients are looking at setting up their own IDNO to try and circumvent or address that issue. It is an independent distribution network operator, so it is basically their own grid company. I do not think that anybody is unaware that, in Scotland and across the UK, there are fairly substantial labour shortages across the board. The transition to net zero will increase the demand for certain skills and occupations. How significant is this constraint on labour—skill labour—going to impact on the renewable energy sector? As a second question on the back of that, how confident are you that the skills and education system will deliver that pipeline of people and skills that you need? Claire, can I ask you to kick off? As I said, the investment outlook is quite poor. From what we are looking at in terms of skills, the picture is relatively good. I think that the interest and ambition here in Scotland in terms of renewables is certainly when we did a recent survey of student numbers in Scotland, we have seen a 70 per cent increase on three years ago, so 22,000 students currently studying in Scotland in the renewables and associated spaces, largely engineering. The skill shortages that we are going to experience are there, but we are starting to gear up. We are starting to see that. It is about focused effort on that area. The other area that I am keen to highlight is what industry is contributing to. It is not just about public sector colleges and universities in the education sector. We have a strong framework of vocational training in renewables, which we are working on at the moment to uncover. We have had a lot of returns from members in the past couple of months that suggest that there are at least 20 resourced facilities around Scotland through the private sector and industry that are working to set up or currently delivering apprenticeships, in-house training facilities, investing in learning, hiring and apprentices, upskilling existing staff, to demonstrate the commitment that we have as well as an industry in order to upskill people and help to plug those skills gaps that we are facing. We are certainly, the messages that are coming from industry are all about upgrading those facilities, enhancing those facilities and expanding those facilities. We have seen one of our service group members have said that they have had 500 of its employees have received, training or upskilling in 2021 and employed 20 apprentices in the year. I will leave it there. That picture is good. It does not mean that we have covered the whole issue. There are other challenges and skills in terms of skills shortages. There is one issue, which is finding enough people in numbers. There is also that ability for us to bring in people from elsewhere. Skills gaps, which is training and upskilling, but also skills cannibalisation is a point that we need to think about. As we are developing renewable energy projects, across the world, renewable energy projects are being developed and a number of the companies that are doing this are international. Employees who currently reside within Scotland will have an open door of opportunity to work across the globe on other projects. Again, it is about making Scotland one of the best places to live and work as well to ensure that our companies can keep people here to work on projects. On the back of that, what indications have you seen of people transitioning out of the oil and gas industry into renewables? Has there been any significant movement there? Yes, absolutely. The heart of that is the SME base that I was talking about. That is exactly where we are starting to see a lot of the crossover in there. It was figures from OEUK, the Trade Association in the north-east, who focussed on the north-east in the oil and gas sector. Primarily, I talked about 75 per cent of their SME members transitioning into the offshore wind space. They are very active in that skills transition area. We did some research in 2019, which said that about 80 per cent of workers in the oil and gas sector are aware and are alive to the impacts of climate change on their career choice and on their future job opportunities, but three quarters of those are keen to reskill and would take the opportunities if offered. There is a strong will in there. We are seeing that movement through the SME sector, but it is never going to be a job done. The scale of the pipeline in Scotland cannot be underestimated. It needs that focused effort for SME, and individual skills training to meet the challenge. I was just smiling, because I have an oil and gas background. I will mention which company, but I am personally interested in helping this transition from oil and gas into renewables. For my team, I have done this recently. I would probably say that that is a key focus, but we are seeing transferable skills from other industries, such as automotive and various other manufacturing industries that are good, relevant transferable skills that we will need to transition into our renewable sector if we are going to hit the 77,000 jobs by 2050 that were suggested in the energy strategy yesterday. Oil and gas is a huge focus, and it is a fruitful place, but we need to cast our net wider. We need to work backwards from that 77,000 in a partnership industry as a whole and government to make sure that it flows through, and we hit that 77,000. This is really close to my heart, because it is by far and away our biggest challenge. We are a technical adviser into low-carbon energy. We are about 100 people. We are headquartered here in Edinburgh. Most of our staff are employed in Scotland, and a big challenge for us is accessing talent pool. We cannot get enough people just to give you some statistics around that. We are growing at around 20 per cent per annum. We are a little bit over that. Our projection for next year is to do the same. We have got 10 roles that we are trying to fill at the moment, plus another 10 graduates per annum that we are looking to bring on top of that. It is really challenging to add another statistic to bring a bit more colour to that. It is also taking longer to try and find people. It is a relatively shallow pool that we are all fishing in, so our clients, contractors and other consultancies are all looking for the same kind of skill sets. As Clare mentioned, it is a global market. In the past year, it has gone from us taking on average seven weeks to fill a role to 17 weeks to fill a role whilst the demand is still there. That hopefully gives you some context. An important part of addressing that challenge for us is developing strong relationships with further education and higher education institutions and identifying the talent at an early stage and looking to bring it in and train that talent up, but they can go anywhere in the world. We have even got people based overseas in places such as Argentina and the US, some in mainland Europe as a result of us trying to access a talent pool that is more diverse and is not just based locally and geographically. Those are all the challenges that we are facing, and we are all facing those kind of challenges. I do not see that slowing down, quite frankly, with the aspirations that we have. There have been various reports done from an R&D perspective that have stated or recognised that in order to meet our ambitions and the ambitions of other nations, there is insufficient capacity in the market to deliver that, whether it is people or other parts of the supply chain around equipment resources. It is definitely a challenge for the industry and for global aspirations around decarbonisation. James, what is your experience on that? I re-employed 41 apprentices. That is true. There are apprentices between electricians and pipe fitters. As a business, we are actually tied with placing 52 apprentices, but at the time the colleges could not accept that number of them. We can get the spaces for them. Now, without putting the camera experience, so to speak, we are not sure if that was just on the hangover on just coming out of lockdown back in March last year on Covid. Our next intake this year will be people made time, so we will be watching that very closely in terms of what is available, in terms of trade placements within the colleges and what is available. I touched on the apprenticeship level earlier on in a previous question that I asked to come up with a skill and that would be something that would help businesses, SMEs and ourselves as well to try to upskill our staff. You touched on companies—I think that it is clear that companies are investing in training areas, so we have just recently done that ourselves as well. We have spent £25,000 at a training facility, upgrading and creating a dedicated workspace for renewables. We will have saw baby battery storage, EV charges to train our apprentices and also our existing electricians to meet the demand going forward. From a private industry perspective, there is a real appetite, I suppose, and hunger to drive this change. I am just touching on the skill shortages. I am not sure if there are wider economic impacts. The biggest problem that I have seen is that, as a business, we are electricians, for example, in line with the SGIB rates—that is industry standard rates. I have noticed that, in the last six months, companies have been paying 32 to 40 per cent higher and are open above that, because of the demand and the aggregate that people want to get in. The problem that I have with that sometimes is what you do then with that additional cost. If you then absorb that or pass that on to the clients—if you pass that on to the clients, that is sometimes counterintuitive, because then that might put the project at risk because it becomes uneconomical. It will be interesting to watch the next six months to a year to see if the labour market does exactly that. There is also the potential recession coming in in terms of the wider economy. I do think that the new industry will go up to that, but it will be interesting to see how it reacts. I want to pick up on a couple of points on skills and supply chains. Claire, you spoke earlier about the interest and ambition being here. One of the questions or one of the things that we have heard is that we may have the right skills, but they are not necessarily in the right place. If we think of Scotland as a whole, we can identify what we need. I am interested in what are the barriers that you have identified or the people that you work with have identified around ensuring that we have the right conditions for people, for SMEs to function not just in the central belt, not just in existing energy hubs but across Scotland, particularly in rural areas where we want to see sustainable viable economies. In terms of barriers, getting the right people in the right place, there is one very significant one that we need to be very alive to, and that is data. One of the problems that we have as a sector is that we, as a trade association, have gone out and created our own model to model jobs in the here and now. We have a model that we have worked with at the Fraser of Allander institute, which tells us that we have 27,000 people currently in the workforce. The reason that we have had to do that is because the data that comes through from ONS at central level does not give us what we need. It does not allow us to know right here and now or to track what is going on in terms of energy transition, so that is a point that I think is a really key one for the committee to light upon. On the geographic point that you make, I come back again to vocational training. I am a huge advocate of vocational training, having been to some of the most productive economies in the world, if you look at somewhere like Switzerland. Their model is very much led by vocational training. It is something that Skills Development Scotland has done a lot of work on over the past few years, and it is something that I very much urge us to look at, because it can allow us to get to places in wider reach in terms of geography, and it allows us to get more specific technical skills embedded in the economy. It allows that public-private partnership and a fast track of people to get through that system. When we spoke to members about that, they agreed that they were struggling to recruit staff with the required skills levels. They were also feeling that they were having to supplement their training in order to get exactly what they needed in order to deliver projects. That is a partnership approach, but it is something that we need to be aware of, because it is not enough just to open up more and more college places, university places and academic routes. The vocational route needs some focus as well. That comes back to my conversation about SMEs and support for them. Their capacity to do that is more limited, so if we can use what we have to help to support a very targeted programme of work with SMEs around skills and upskilling, that would do us a lot of good service in there. In the rural space, again, it comes down to where our companies are located, so you have global energy group, for example, and NIG. That is the company that I was talking about that has put 500 of its employees through its in-house training centre. James talked about their in-house training centre. We have companies such as R.J. MacLeod providing civil engineering training and skills uplift. There, too, are doing a lot of different skillsets. We have good data now from that survey around what we need in the near term, but we also need to keep a focus on that sort of longer term, too. The two constraints that I would highlight is data being able to look at and track this properly, so that we can divert resources to exactly what we need and where we need them and when, but also to support some of those SMEs in their endeavours to help with the skills challenge that we have. James, can I come to you on a similar question? Do you think that we have the targeted support and approaches right to make sure that we are supporting skills in the right places? I am thinking particularly not in the expected places, perhaps, but in places that might benefit from this kind of economic development. I think that it is intrinsically linked to the end of the day as well in terms of pipeline. Unfortunately, we look at where the majority of work is. If I talk about central buildings in the north-east, that is typically when a lot of them, certainly our work is. However, if I touch on that, we have a business that works out of Oben, so they look at west coast. We are actively looking at how we target renewable projects on that west coast, and with that will come sales development and trying to get people trained up from wherever else. However, how do we unlock those projects and the pipeline of projects to allow us to invest in that and get those people as well? It is intrinsically linked in that respect, but it is maybe not necessarily a clear answer. What I would say in terms of ease and strategies in trying to get clear past is that it needs to be made simple. If I look at heat pumps, for example, I put three or four of my team on heat pumps training to try to get the SCS to be satisfied in the last six months, and I found it incredibly challenging. EESP has done a body of work in skills partnership. It was six or seven courses that you could do, and they had to do something else. If we are trying to target so many thousand heat pumps to be installed by that timeframe, there is quite a lot of tape to try to cut through. We are trying to streamline those pathways, and we are trying to make it as clear and concise as possible for not only employees but also for colleges and accreditation bodies. We could probably talk about skills all day, so I will move on to my next question, which is about supply chains. I know that Gordon is probably going to pick up on some of those as well, but if I can come to you, Johnny, on supply chains, how confident are you that we have not only the resources in terms of materials or connections to obtaining them for Scottish use, how confident are you that that is a long-term security rather than things right now? You said earlier that demand for your work is high now. How confident are you that we have got the sustainability of those supply chains to secure that demand into the future? I suppose that the short answer is not that confident sitting where we are right now, but I think that if we do something about it now or if we need to do something about it now to ensure that that happens. I was just reflecting on the previous comments that were made. The workforce in particular is more flexible than it has ever been in particular post-Covid. People have become way more flexible and adaptable about where they live and where they work and how they work. We in Scotland need to capitalise on what Claire mentioned earlier. We are world leading in terms of our ability to deliver renewable projects and provide advice and equipment around low carbon technologies. Just to give you a couple of examples, we are working in places like Taiwan, the US, West Africa, Sub-Saharan Africa and the Caribbean. We are exporting our know-how from Scotland to deliver projects in those places. We need to be attracting talent to Scotland because Scotland has seemed to be that world leading location for providing that kind of know-how and capability. A lot of people go and study where they think that there is a centre of excellence. We need to make sure that Scotland is and stays a centre of excellence. From a point of view of sustainability of that supply chain, that is the starting point. We need to be doing that right now because other parts of the world are catching up if not overtaking. John O'Sullivan, if I can come to you on a similar question around Scotland supply chain for the range of renewables that we are speaking about, what are the important things for us to focus on to ensure that we have the right material and infrastructure in the right place for that 10, 20, 30-year sustainability? I would like to give some concrete positive examples where we have invested with the Scottish supply chain recently. Fourth ports, construction, coastal marina system. I think that those are examples where it is happening. There is some positive outlook. However, I think that we would share the comments around this being a significant challenge for us. We want to do more in Scotland with the supply chain, but it is a competitive global marketplace now. What we are doing is working with our supply chain to encourage that investment in Scotland. I believe that there are positive things happening in the onshore wind sector deal that is being discussed and worked on. I know that a significant component of that is around supply chain and how we can do more in Scotland. EDF renewables is looking forward to contributing to that and, again, getting more concrete targets of what we can do across Scotland to help us to unlock our projects. Obviously, if we do not, there will be increased costs of delays and other companies having to come in from other ways. The more we can be proactive—that is probably my key message—the proactive with the supply chain now will unlock the skills, the supply chain and the longer-term pipeline that we all want to see. Thank you. Finally, Claire, if I can come back to you on global supply chains, this seems to be a bit of a left-field question. Given political and other uncertainty in different parts of the world, what are the backup plans or mitigations that you and your members are thinking about in terms of human rights issues that are involved in the supply chains and materials extractions, environmental rights surrounding materials extractions and that kind of thing that you and your members engage in? No, it is a really pertinent issue because one of the things that we need to be very aware of is that our demand for rare earth metals and other sorts of commodities are going to have an impact somewhere else. It is something that members are mindful of. My membership as a whole is committed to living wage and compliance with modern slavery laws and all the fair work practices that go alongside that. We are an industry that prides ourselves on that. In terms of the wider strategy around how to ensure that we have a ethical supply chain, a lot of that is coming through different areas now. A lot of it is coming through things like ESG, environmental social and governance measures that are being demanded by the finance sector, and people have to have good knowledge of where their commodities are coming from and how their people are being treated, as part of those commitments in there. In terms of specifics here in Scotland, I am not aware of any programmes that go on beyond living wage and commitments to modern slavery, but it is something that, as an industry, we are aware of as well as the need to think ahead in terms of the circularity of our products. Particularly here in Scotland, if we look at something like the onshore wind sector, we are very much focused on a repowering programme. Again, that came through in the energy strategy yesterday. We can make use of taller turbines, which will create a certain body of other products that will need to be removed, either recycled or reused. Again, the industry has been quite active on, to date, one of my member's renewable parts. His entire business model has been predicated on trying to create second life and enhance life for older products. Commitment is definitely there. As you said, that is a global issue and one that we would be looking perhaps to engage with through larger trade association partners, perhaps those based in Europe, but also thinking, too, about contributions from the industry into platforms such as COP, as well. I am always going to be a key part of that agenda. Good morning to the panel. Can I follow up on a point that Claire mentioned? That is how we measure economic success and renewables. I do not think that there is any doubt that we have seen good progress in the role of energy production in terms of cutting emissions in Scotland, particularly through onshore wind. It is probably fair to say that that has not yet translated into the maximum number of job opportunities. In 2010, the Government's low-carbon Scotland economic strategy promised 130,000 renewable jobs by 2020. We all remember being told about the Saudi Arabia of renewables, but Claire mentioned the recent report by the Fraser Valander Institute for Renewables Scotland that estimated the number of jobs worth 27,000, the figure is about a fifth of that target. The first thing that strikes me is that that was an estimate because we do not actually seem to gather data on renewable jobs. The second thing that struck me is that yesterday, when the Cabinet Secretary for Energy and Energy outlined the draft energy strategy, the Just Transition Plan, he then used the term low-carbon jobs, which I think John mentioned, and the potential to reach 77,000, so that includes obviously nuclear jobs as well. He then, during the course of the discussion, used to phrase green jobs, so that is three terms on jobs already in the course of one discussion. My first question, I suppose, is that there is clearly a gap in the data, so what exactly should we be measuring when it comes to the economic benefits of the expansion of renewables and how do I know, and how do other politicians know that it is the maximum opportunities? You all will be able to tell me that companies are awarding contracts to Scottish firms and you have created X number of jobs. What you probably will not tell me is when the contracts go down overseas firm, but how do I know that it is the maximum number of jobs and if it is not, there is a barrier there? It is the only way to start with clear, because it was obviously yourself that raised it in Scottish renewables that commissioned the work from the Fraser event and Aldan Institute in the first place. One of the key points to make around the difference between the first jobs figure that you quoted and where we are today is pipeline. Pipeline is what everything comes back to. You need projects to create jobs. We have a lot of opportunity here in terms of new technology such as floating offshore wind and the tidal sector that I mentioned, where you have a ground-up alignment with oil and gas skills, with existing skills, so that you do not start from zero, you start from a good base to work from. The measurement issue, we have basically used a model that was devised by the oil and gas sector to help to understand more about the energy market here in Scotland. The issue that you have raised about the difference between a low-carbon job and a green job is one that Skills Development Scotland is looking at through the climate emergency skills action plan. There are some really good analysis of that, and they would probably be able to help you better than I can on that in terms of the measurement piece. We are constrained by the fact that we do not have a distinct industry code for renewables. I go back to what I said earlier in this session on the changing shape of projects. At some point in the process, we are very heavily reliant on lawyers and planners for contracts and consents, and we are heavily reliant on the construction sector. The jobs picture changes shape over the course of a renewable energy project. The longevity part comes in the operations and maintenance point, where about 50 per cent of the jobs are. That is the bit that we need to understand, because that is where you will have your jobs for the next 10 to 40 years. You have a pipeline of construction, and that will give you a boost. As we all know, when you do a Queensferry crossing, you will see a boost in the economic figures that go alongside that. We are no different when we are in that phase, but the on-going piece is that operations and maintenance piece. That is again something that is very much rooted here in Scotland, because that is where the projects are. Vessels that help us to get out to wind farms, drone operators who help us to survey wind farms, all that kind of stuff, and new jobs that are in there, too. In terms of maximising the opportunities, it is about understanding the here and now and being able to meet the future demand. Again, that is one way of maximising opportunity, is getting better data now to help us forecast better, to understand what we need and being able to use as many of the people that we have currently here in the country to be able to meet that. The other area that is really important in terms of maximisation of opportunities is to follow the path of the oil and gas sector, because they have been a heavily mobile workforce and heavily exported, not just the product but the people. That is something that we are really keen to see here in Scotland. Again, something that is a trade association that we have looked for from the Government is targeted and focused support to help to build export capability. We have got amazingly wide reach. We are in about 72 countries, but, as with most other sectors in Scotland, it is a narrow exporting base and we need to broaden that to be able to maximise those opportunities. That is really important points. I am still struggling with that. Why do you think that we are not measuring a lot of those things at the moment? Why do you have to do the work when we as politicians set targets, but you then have to measure what progress has been made in those targets? We have good data through the current system on oil and gas projects. Part of it is the energy transition. It is hard for firms to do the returns in such a way that it would be meaningful, but it gets down to that very granular level data. For example, if I think about somebody like R.G. McLeod, they work across a number of different symbols projects. Some of them are roads and rail and then you have working on a renewables project and the way that you do the return will impact the data that you get. One of the problems is that capacity and resource in actual companies would struggle to give the granular level of detail that we need because sometimes they are working on renewables projects and sometimes they are not. If I work, for example, in EDF renewables and I am continually working on renewables, that is quite easy to identify. There is some sort of devil in the detail issue in there. The other issue that has been quite critical here is that, if you look at the Office for National Statistics, they had to pivot quite quickly to manoeuvre themselves around things like Covid data. Things that we have been speaking to them about, such as how do we get a better handle on what is going on in the wider economy and in the renewables sector, perhaps, were put to one side to allow them to do that. Now, we are coming back into something that looks a bit more normal in terms of the economy. That needs to be looked at in a very quick order, to be able to get us to a point where we can get better data. Certainly, as the message that has come from my colleagues at Fraser of Allander is that that is where the issue lies, is getting the metadata, as they call it, or the microdata—sorry, microdata, not metadata—from companies, but then also being able to translate that through the way that ONS reports in order to get us something that is more meaningful. I think that capacity at ONS, to be fair, had been constrained because of the key work that they were doing on reporting on Covid's impacts. Can I turn to John from EDF? I suppose that I asked the same question to John. You said that there were gaps in the energy strategy in terms of some of the targets around production, but for me the biggest gap was jobs. What is the target for jobs? You might think that I want that target so that I can then assess whether you are delivering those jobs in Scotland and not handing those contracts overseas, but the real target is that it would flag up whether there is a problem around the capacity supply chain or whatever. The reasons for those jobs not coming to Scotland, presumably, you would support having that proper data so that we can not only hold your feet to the fire to make sure that you are creating those 50 jobs in aymouth that you mentioned, keen interest in, but it is the maximum number of jobs and if there is a barrier to that, we need to break down that barrier. I could not agree more. We want to have our feet held to the fire. We have a good reputation for delivering on our promises and we need to work together with Clare and as an industry to set those clear targets not just for 2030 and 2050, but to break that down to see that we are on the right trajectory so that we are going to hit those targets and there are no unwelcome surprises at the end where we realise that we should have been more proactive doing more now. I would welcome that work to consolidate and standardise the targets on megawatts, jobs and the right terminology, how we measure them and maybe the other target for KPI to measure the success of this is GVA and gross value add. That has been quite a well-used, well-known term in terms of measuring the positive impact on the economy. I think that there is a good discussion to be had, hopefully, parts of this consultation, as you say, on the energy strategy and just transition. Let's clarify those KPIs and let's measure the success of us achieving that zero. I turn to James. You have a keen interest in making sure that we are maximising the supply chain jobs here in Scotland. How do I know that companies such as your own FES Energy are actually getting the opportunities and those opportunities are not effectively being offshored? Is there a challenge there that you face or is there so much work going around that it's fine? Sorry to interrupt James. We are running a bit short of time. Can I ask witnesses to be brief? This will be the last question from Colin Smyth. I will move to Jamie Halcro Johnston. I have two remaining members who may wish to come in. I want to give them time to take the opportunity. James, please do go ahead. There are probably two passes to this. We are having a problem with James's connection at the moment. I will move on to Jamie Halcro Johnston and see if we can get him reconnected. Thank you very much, convener. My two questions are very clear and I will put them both to Claire if that is okay. We have talked already about constraints on the network. It has been an issue that is highlighted. As a member from the Northern Isles, I know all well about the issues around grid upgrades and the like. I want to look a little beyond that. There is obviously work being done by organisations like Reflex Orkney, who are coming down to the Crossbody Group on Islands today, to talk about how we can use energy better locally. There is a real concern. I was just looking at figures from Ref, which said that you may have better figures than this, but 3,460 gigawatt hours at a cost of £243 million in 2020 alone were lost to constraint payments. That is energy that could be better used within communities. Can you tell me how the sector and we can do more as a country to better use that and avoid having to spend that money not producing energy that we could be putting into local homes and businesses? We have put that same question to National Grid. Do you believe that constraint payments are still the most efficient way to run the network and they believe that it is for the moment? The network infrastructure build programme is phenomenal. Again, let us not forget its contribution to jobs. It is very certain, because it is a regulated investment base that it works from, so it is a regulated investment window. In terms of the constraint issue, yes, a lot of it is to do with management of the grid and not having enough capacity on the grid, but some of it is just the very nature of renewables, which is intermittency and things like solar, for example, when the demand or the generation comes when demand is lower. The key way to overcome this is, first of all, grid build. That is a long-term plan. It would be hard to see an investment in grid infrastructure at the moment that would be wrong. There are lots of no regrets in there, and continuing to build grid is a really important thing in a country that has such an abundance of energy. The other key area that we need to look at very quickly and very specifically is storage. Scotland has again some very key geographic characteristics, which mean that we are the place to develop new innovative storage, but we also rely on some trusted sources such as pump storage hydro. We have some phenomenal companies. Again, you have mentioned Orkney as well. They are obviously looking at hydrogen into transport. That is one of the key areas that they have been working on. We also need to look at different types of storage, so shorter-term duration stuff, batteries, how that integrates into more localised energy systems. Johnny might want to come in and add a little bit on here. Pump storage hydro, which is longer duration, inter-seasonal storage is again the role of hydrogen in our economy. That is a key area where you are able to start to build out some new infrastructure, some innovative product, new skills and new technologies that will be used to everyone else in the world. That is the key question now, is that integration point, how do you reduce that constraint burden by creating new technologies and innovative approaches to integration that will help alleviate the problem? I will just briefly make a couple of points. It is definitely looking at storage technology so that you can optimise the capacity and use the full capacity that is there, which would address the first issue that you raised, at least to some extent. We are actually doing quite a lot of optimisation work on those assets. In other words, what could you collocate either as another generating technology that is negatively correlated with the existing one and or storage technology? We are starting to see more of that, albeit that there is the sort of financial economic overlay to that. In terms of innovation, we are the technical advisor on the low-carbon infrastructure transition programme funded by the Scottish Government. We are seeing all sorts of interesting innovative technologies coming through that. There are other similar things that are happening, which I think are really important in terms of, to some extent, addressing the point that you raised. That is a real concern to people, particularly when I am speaking to them, that we are spending this money not to produce energy when we need energy and people's bills are. I will leave it at that energy, if you don't mind. Thank you. Michelle Thomson, do you wish to come in with a question? Yes, I will be very quick in the interests of time. Thank you very much for everything that everyone has said so far. I will go back to the focus of the Outlook for Business investment. I just want to ask a quick question about your perceptions for women in your sector, women-led SMEs, women renewables, generally women in just transition. Given the very fulsome comments about data, can you please make clear where it is merely a perception based on anecdotal evidence and where you do not have the data collectors in place and, off the back of that, where you would need to see data collectors in place? Perhaps you could lead off clear. I will give the panel once in the interests of time. No, I will go quickly on this. There are a lot of different issues in there, particularly on the gender point. Gender has been one of the key areas when industries come to government to look for sector deal-type approaches. It has been one of the key areas, not just gender but also important in there. That is one of the ways to secure more commitment is through the onshore wind sector deal here in Scotland, but the offshore wind sector deal with the UK Government, which sits predominantly in Scotland because of where the projects are and going forward. We have the targets that we are talking about in the energy strategy. There is always that quid pro quo that comes in there and how we do things, really important part of that. The other point to make here is the breadth of different jobs within the renewable sector. We have seen that come through the energy sector in the past. If I spoke to my colleagues in oil and gas, they too have concerns over diversity within their workforces, just because of the very nature of work tends at times not to be family friendly, sort of offshore work, very difficult. The world is changing in that sense, and the flexible working and more family friendly working environments are opening up in renewables. I think that the breadth of jobs really does support our diversity aspirations, because if I look at what our members are saying, there are skills gaps and places where we are seeing shortages. Planning and consenting is one of them and environmental specialists, again much more open to more flexible types of working and much more diverse intakes. Wilders and fabricators, turbine technicians as well, all open to all people from all walks of life in terms of the diversity agenda. Something that the industry takes as part of its values as well is very much linked to the question that Maggie gave us earlier on. We want to do the right thing. We are a positive industry and we want to be seen to be doing the right thing and again crucially important to how we present ourselves to the world. On data, the current status, and how do you know that that's true? Again, linked to the offshore sector deal, we've got data coming directly from industry, which is broken down in that way. I guess that it's doing a little bit more of that, but also coming down to that O&S issue is if this is an important criteria of what we want to see as part of the just transition, then it's something that we should definitely be speaking to them about, again, coming into that microdata gathering space, what it is that we want to know about, what's important to us. Johnny, I've sensed that you wanted to come in, you were nodding at the start of this. From a data perspective, all I can tell you is, for our business and where you have 50-50 male-female split in terms of our workforce, one of the things that we're keen to do is encourage more women coming out of STEM courses into the industry, and certainly there's a lot of interest, but again, we're proactively talking to further education, higher education courses, and trying to get in there to talk to the students and raise the profile of the opportunities within the renewables industry across the board. It's really important. Going back to the talent pool challenge, we need to have a diverse talent pool as we could possibly access. Thank you. Anything to add, John and James, just to close this topic off, which I appreciate is absolutely vast? Just to say that, from a renewable perspective, our policy is called everyone's welcome, and it absolutely focuses on diversity, inclusion, gender, and in terms of measuring success, then we are seeing more women in leadership team positions, but across the board as a company, and we would support an industry-wide initiative to track the KPIs on this as an industry going forwards. I think it's a question from my perspective. The reality is that it's trying to get interest very early on, and that starts with STEM, so that's the best way to go, and the college needs to increase that goal. Okay, thank you James. Your line was broken up a little bit, but I think that we did get the gist of what your contribution was. I would like to thank all panellists this morning for their contribution to our witness session. It's been really helpful to help us in our work coming forward in the new year. I'll now briefly suspend the meeting to allow for a change of our witnesses. Our next item of business this morning is an evidence session with Mark Logan, chief entrepreneurial adviser to the Scottish Government. Welcome to the meeting. I'll start with an introductory question. You've been in the post now for six months, so you have a longer working relationship with the Scottish Government and worked in other areas, but in this particular role it's been six months. I'm just on a six-year post initially. Is there a shared understanding with the Scottish Government about what has to be achieved in those two years? Is there a way in which to measure what impact this role will be having? There is a shared understanding in the sense that there's a remit for this role. I think that we need to think about the five to ten-year period in terms of what we're trying to do to stimulate a dramatic increase in our entrepreneurial activity. What we'll be looking at ahead of that time in one to two years are the leading indicators that show we're making progress and we'll probably explore some of those in our questions today. Are we overcoming those barriers that stop us being as entrepreneurial as we could be and as we need to be? What progress have we made in the different key areas such as education, infrastructure, funding, building a network and a confidence in the country towards entrepreneurship, and starting to see the number of start-ups and other entrepreneurial activity increasing? We'll see some leading indicators in the time that I'm formally in this post, but what's much more important is that we're laying the foundations to create a dramatic improvement in our entrepreneurial activity that will then build on that foundation. That's where I'm focusing my efforts to not so much achieve very near-term, short-term stimulus to the numbers but rather build the infrastructure with others that give us a dramatic improvement over the longer term. You've previously expressed frustration at the level of bureaucracy in Scotland in terms of trying to make change and concerns around the mindset within the Scottish Government around focusing on economy. It was an appointment made by the Cabinet Secretary for Finance, but is there cross-departmental work taking place? There absolutely needs to be. I'm not going to express frustration more as a sense of urgency that the country as a whole needs in that area. There's two really important reasons why entrepreneurialism matters in this country and why it's increasing the rate of entrepreneurial activity matters. One of them is that every job in this room and outside this room and across the country exists today because somebody at some point started something. It should be obvious to all of us and it's not a party political issue, it should be a universal understanding that if we're going to have a thriving population and individuals having fulfilling lives, we need to be starting things and we need to be starting them more often than we have been. I think that what concentrates that need is that we're now living in what I would call the exponential age, which is to say that our problems and the general environment we're in changing exponentially and our problems are increasing in severity exponentially. Climate change is one very obvious example of that, but there are many other exponentials. What that means is that a society needs to be able to evolve its activities, the work people do etc to match that rate of change. That happens through entrepreneurialism. Entrepreneurialism can be found in industry and business, but it also needs to be found in government. I expressed earlier frustrations at how quickly we get things done. Again, that's not a party political point. Governments have historically moved more slowly than they need to go forward. There's a concept of speed of iteration. How quickly do you iterate and learn? How quickly does that cycle operate? If you look at an internet economy start-up, for example at Skyscanner, where I spent some time in its most high growth stage, our speed of iteration was a weekly process at most. We release software every day multiple times to the site. The speed of iteration of all Governments is not weekly. The decision making frequency is not weekly. It's probably quarterly if we're being charitable. I don't mean that in a pejorative sense. It's just that that's the nature of the machine now. Governments should move more slowly than businesses because you've got to add some inertia to account for extremism and to dampen that etc. However, as a nation, as a Government machine, as a civil service, we need to increase our speed of iteration so that we can make more decisions more quickly and make more speed over the ground to match the exponential age that we're now living in. That's maybe a wider point than the focus for today, but that's my point when I express frustration. For example, when we work on things like the Scottish technology ecosystem review implementation, Governments are usually faster within department than they are across departmental boundaries. We've got to learn how to be faster at running multi-departmental projects, etc, because entrepreneurialism doesn't respect the boundaries that we put up departmentally. We need to be able to work across teams. Those are areas that you could level pretty much any Government on earth, but insofar as we're in Scotland today with our own problems to solve, that speed of iteration is something that we should be focused on. I see part of my role and not the major part of it, but part of it is being a constructive provocation on that point to colleagues around this table and in Government. The greater part of my role is really on policy development and then helping to see that go through to execution, such as with the Scottish technology ecosystem review and with some other projects that I will talk about, I'm sure, in this session. That's helpful. One of the questions that I was going to ask is our remunerated post in its eight days a month. For us to get a good understanding of what the role is, that's why I was asking about measurable progress. You've talked about influence and advisory role to Government about the way in which Government operates, but also working within the sector in trying to make delivery on projects. Is that anything for you to say about what the job entails? I'm going to invite Graeme Simpson to come in. Yes, I'll quickly answer that. To be concrete and specific, on policy development, the first piece of policy that I was heavily involved in was writing the ecosystem review for technology. I spend a lot of my time in implementation of that now because it's an on-going programme. I'm working to co-author the upcoming Stewart review with Anna Stewart on the underrepresentation of particularly gender but also minority ethnic founders. That's a major piece of work that I'll be delivering next month and that's very strong again on policy. It's written in the same manner and concrete style of the Scottish technology ecosystem review. What that's trying to do is to address the fact that we still have an appalling imbalance in participation in entrepreneurship that we should be ashamed of as a modern society. That doesn't make us a just society, but it takes away a lot of our best potential entrepreneurs from a much-needed talent pill. Part of the job that I'm focusing on is how to create more talent that's focused on entrepreneurship. That's one of those aspects, the ecosystem review is another and there's more to come, which we'll talk about. On policy development, there's the Stewart report, the gender review, and beyond that I'm working on a further paper to set an overall strategy for entrepreneurship that puts those other parts in context and will again lead to further policy development, which we'll be happy to talk about. Second part of my job is implementation of that, so it's to steward that through implementation across different groups. Finally, it's then to evangelise the topic inside Scotland and to work to connect groups and build a network of the willing to drive that forward. On remuneration, I'm glad that you brought that up. The ecosystem review that I wrote took me six months to write it and socialise it and discuss it, which I did for free. The Stewart review that I've spent about 400 hours working on that this year, I haven't charged a penny to the Government for that. I'm doing that because I think it's important. I don't charge for anything like the hours that I work, but nor do I work for free. I'm sure that I can understand that. I've tried to strike a balance of ensuring that the work that I'm doing has seen to be valued and people value what they pay for, but the vast majority of what I do, I don't charge the country for because it's just something that I want to do on behalf of the country and for the country and make my contribution. Despite headlines, I tried to take that approach to what I'm doing. Thank you very much. I'm going to come back to remuneration. You'll be pleased to hear, but you mentioned at the start that you broadly described what an entrepreneur is, and that is somebody who has an idea and essentially starts up a business and hopefully makes a success of it. Can you tell us what businesses you've started? Certainly. I was employed five in Atlantic. I was a VP of Engineering there. It was a small startup, and I retook that through to a $180 million sale with Cisco back in 2000. I then co-founded the company called Sumerian two years after we sold Cisco. I was there with David Sibbled and another founder. That company, I stayed there for seven years, eventually sold, but I'd left before then. I joined Sky Scanner when it was about 90 people and was stalling in its growth. I took on the general management of the business working with Gareth Williams, the founder, and took that to about 1,200 employees and a £1.5 billion exit to C-Trip in China. Beyond that, I've worked with probably in the last few years about 60 startups, mainly in Scotland but also around the world, in advisory or investment roles or in non-exec roles. I'm pretty involved in the startup world. I've spent about 30 years in the tech sector, so that's my experience. That's useful to know. You mentioned the Scottish technology ecosystem review that you wrote. I read that when you were invited to do that by Kate Forbes, you were sitting in a lay-byte on the A9 when she asked you to do that. In terms of the current role, how were you offered this role? Where were you? I hope that it wasn't sitting in a lay-byte. How was it offered? Were you—was there an interview process? I wasn't in a lay-byte. Kate Forbes was in a lay-byte. She was in a lay-byte. I'll have to ask her what she's doing in a lay-byte, but I'm sure it was just a safe driving practice. The role, as I understood it, emerged. It seemed to be very valuable through the Scottish tech ecosystem review—I'll just call it a stare for short, because it's a bit of a mouthful—to have an industry expert, if I can use that term, to take an independent view of what is needed in the area of entrepreneurship and then help to steward that through the execution. What that did was establish the concept of having someone in this position as being valuable. That wasn't my decision to do that, that was a Government decision. I was asked if I was interested in considering that role. I said that I was. My understanding was that there was a process that I wasn't part of to look at a short list and other people were considered for that role. I'm not sure what process was followed to explore that. I was asked if I would take on the role after that. I didn't sit in a formal interview, but I think that my interview had been over 18 months before that. I'm sure that I would be an incredible candidate for the role. That's how the role came about from my perspective. We've got this role. Are you interested? You were offered the job, so there wasn't a formal interview? It wasn't a formal interview for me. I was aware that there were a number of candidates being considered. I don't know who those candidates were. I'm sure—I believe—that discussions took place with them. Discussions took place with me over a period of time because I was working closely with the Government, but it wasn't in a classic sense of coming in and being interviewed by a panel of three people or anything like that. Come on to the remuneration now. The figures have been published. You can tell me if they're right or wrong.  Is that correct? That's the official rate. I'll comment on that in a second. That's £2,000 a day for two days a week, roughly. On average, have you run it that way? That equates to £200,000 a year, which is more than the First Minister earns. That's quite a colossal amount. It's a huge amount. I actually don't know whether you're a civil servant or on what basis you're employed, but it's a lot of money. I can do without chunkering from a left because it is a lot of money. I think that we're entitled to know what we're getting from our money. So what does £200,000 a year get us from you? First of all, as I said earlier, the majority of the work that I do, I don't charge the Government for, so you're actually getting an awful lot more than eight days a month's work. As I said earlier, the Stuart review, which I think is going to be a transformational programme for this country. I've spent about 400 hours on that. I haven't charged anybody for that. I'm not sure how much free work you do for the Government, but I do a lot for the Government. The second thing is that £2,000 a day is what typically a junior consultant in Ernst and Young or Accenture will be charged out at. I have 30 years of experience of supporting the tech sector here in Scotland. I've got a lot of expertise. I've worked with hundreds of companies. I've employed well over 1,000 people on that task. I know a lot about it. So you're getting a lot of expertise for that money. What are you getting for the money? Well, you've got a Scottish technology ecosystem review, which has essentially profoundly transformed the policy direction of the tech sector in Scotland. You're getting my stewarding of that through a complex implementation. You'll see, for example, that we've set up the tech scaler network, which is probably a first worldwide in terms of its combination of incubation, founder education, town square dynamics and a platform to build on to create a great environment for our start-ups to compete. We've set up the ecosystem fund to stimulate the network of entrepreneurs, their confidence and their peer learning abilities. That's been put in place. We've set up a number of initiatives in education to dramatically improve our performance in computing science education. We've set up the Scottish teachers advance in computing science network, which is taking teachers and putting them in the front line of decision making so that they can influence policy, curate best practice and share it with teachers around the country. We're about to launch the teacher upscaling programme that ensures that our teachers are properly skilled and qualified in computing science to make the subject interesting and engaging for students. We've got another world first and how that's done. It's a network of teachers training teachers, so it's very novel. We've got a whole set of new resources going into teaching in terms of resources for teachers, so they can teach first and second year students in a better way, so they get more interested. We've got that running. We're in advanced stages of defining the entrepreneurial campus that takes our universities from just creating tech graduates and instead creates entrepreneurial tech graduates. That's going to be transformational, so that's of course been a lot of work. We are in advanced stages of setting up a scale-up fund in Scotland so that we have the ability to supply large-scale capital to scaling companies. That takes an awful lot of time to do. There are other things in the Equal System review, but that's just some of the things that I'm spending some of my time on. The next thing is the Stuart review that I mentioned earlier, which, if we implement it, will have a profound effect on participation rates for women in entrepreneurship and ethnic minorities. Beyond that, I'm working to extend those ideas and use those as a platform to build additional improvements in how we think about entrepreneurship in this country. I'll be very happy to go into details on that shortly, but I'll summarise that there. There's quite a lot going on. I'm working with lots of other people to do it, but I don't feel that it's not directional or it's not valuable to the country. We can argue about what number is the right number, but I think that you're getting value for money for what I'm doing. As I say, the headline rates are not actually what the country is paying for my time. My choice and my decision are the major reports that I write that I choose to do for free. The reason for asking those questions is that it gives you a chance to say all that, which is really, really useful. I've just got one more question, if that's okay, or we can move on. It's up to you, convener. You're obviously involved in some other companies, one of them is in Travel Nest, which has had money from Government. Is there a potential conflict of interest there? There's a potential conflict of interest there. I've done two things. The first is that I've been very careful not to involve myself in those kinds of decisions. The second is that I've resigned that non-exec position to ensure that there's no conflict. Let me ask you a very obvious question. What do you consider are the key barriers to holding back entrepreneurial activity in Scotland? There are a number of proximate causes to that, but I think that we need to look a bit deeper. One of those deeper issues is the question of our culture as regards entrepreneurship in Scotland. I think back to the fact that we were once one of the most entrepreneurial nations on earth. I grew up in Clydebank, which was once the Silicon Valley of its age. I think that what happened was that we didn't update our model fast enough. We thought that we could stay in that world building ship in the same way as having industry working the way it did, and then that was taken away from the country, and it caused an enormous confidence shock. In the 1980s, we thought that we could import a tech sector. We got Motorola and Sun Microsystems and IBM and the rest to turn up and kickstart our tech sector. That would be fine instead of growing our own tech sector in parallel with that. That all went away, but that was another shock to the country. Somewhere down the line, we lost our confidence to some extent as a nation and entrepreneurship. We started to build a narrative of dependency to some extent or a narrative where we are just not really entrepreneurial and all that stuff. That affects how we think about it, at the policy level, the focus we give, etc. I think that there was some element of that that ultimately put us a little bit behind where we could have been where we should be. However, I would say that culture itself is a consequence of other things. The situation is not the root cause. Culture can be changed very easily. Culture has changed based on success. If we start to act in a directed fashion with a clear strategy, people start to see exemplars, the confidence returns, culture adapts around that. I do not think that we are in any way stuck or that we should have any cause to lament or be depressed about our opportunities. I think that how we move forward from this point addresses directly a question on what the barriers are. The first is that we have to normalise entrepreneurship as a career path in this country. It is not fully normalised. It is not the obvious thing that people think to do. Normalisation is partly about education. We need to be teaching our primary school children, our secondary school children, our university and college students about entrepreneurship. Our tech students at university should be learning how to be tech entrepreneurs, not just technicians. We need to be equipping those founders that we have in start-ups today with better techniques. That is not just about children at the formal education stage. It is also about people in practice. If I stop metaphorically a founder in the street in Scotland and ask them about modern growth techniques, they do not always know the answer, whereas their Silicon Valley counterparts know those answers. We have to bridge those gaps. There is an education element to that. We are making considerable progress there. You will see from the end set, for example, that there is a big focus on education in this area. The stair reviews brought considerable focus to this area, too. There is more that we need to do there. There is entrepreneurial campus initiative that is running. Things are happening there. The tech-scaler network is, although it is an environment and network of places to incubate companies, it is first and foremost an education environment where founders can learn international best practice. Education is important. The second piece is infrastructure. That is the physical and social infrastructure that goes with entrepreneurship. Physical is, for example, places to have companies, for places to be able to learn. Social infrastructure is building a network of founders and start-up people that can learn from each other and take confidence from each other. There are policies that we have in train to help to build and stimulate that, but there is more that needs to be done. Funding is an area where we have a mixed picture. We have a pretty good syndicate capital for early stage seed funding. We are a bit short in the very early stage seed funding and we struggle with the scale-up funding as well, so barriers are there for me to overcome. However, the biggest of all those is just attracting people into entrepreneurship. I mentioned earlier the Stuart review, where the population, for example, is a 50-50 sprint split roughly of male and female, but only one in five founders are women. That means that we are taking a lot of talent out of the system, as well as denying almost half of our population the same opportunities that the other half have. If we can make progress in that sort of area, we can considerably increase the talent pool. Those are the barriers that policy needs to address. Getting the talent pool increased, normalising entrepreneurship, the education element, the infrastructure and the funding that goes with that. Crucially, we cannot do those things the way that we have sometimes done them historically as a set of isolated, uncoordinated initiatives. That is why I think that the stair review is important, because what it said is that we need to take a systems review. We need to view the entrepreneurial ecosystem as a system. That particular review is focused on technology companies, and that is only a subset of the system. However, the value of a system is that, if you can agree how the system works, if you can agree what its outputs are, if you can agree what its inputs are, then if you can agree what stimuli improve that system, then you can co-ordinate across different agencies and different parts of Government to mutually reinforce each other's initiatives. I will give you one example of that. I mentioned earlier on the TechScale Network. The TechScale Network has seven sites across Scotland with incubation for start-ups, with world-class education and with a town square environment where people can hold their meet-ups and learn from each other. More than that, it is a platform that we can build on. For example, we are talking across the three development agencies in Scotland about how we can integrate grant funding natively into that environment so that a company that is curated for entry into the TechScale Network is also curated for grant funding at the same time. We use the skills and knowledge of the development agency alongside the TechScale Network. That is a great collaboration. It shows what is possible. It is a small example, but when we start to use the same model to build out a vision for Scotland, the next stage of evolution of TechScale Networks is to make them not TechScale Networks but scalers, which is to say that we add other companies of different flavours into them. I think that that is extremely important. I will give you a couple of very quick examples of why that direction is so important. I think that we have all heard of Moderna here, given what we have all been through. Maybe you have had the product in your arm. If I was to ask is Moderna a life sciences company or is it a tech company? It uses massive AI engines to take biology data and analyse it and then massively automated labs to turn data back into biology, so it is both. In Scotland, we tend to hold our life sciences, mainly in academia, a very strong sector, but mainly in academia. We do not really expose that sector to the same expectations on starting companies as we do with the tech sector. Let us take Pixar. Is Pixar a creative company or is it a tech company? I will say that it uses massive AI engines and massive compute power to make those movies. In Scotland, we have an interesting creative sector. It is pretty strong, but it is made up of thousands of individual freelancers and small isolated networks of freelancers. Again, we have some of the greatest schools on earth in terms of creative industries, but we do not teach those young folks to be entrepreneurial. We do not set that expectation. What have we put them alongside our tech people in the tech-scaler environment and other incubators? What have we built policy around supporting them together? Creation happens in the gap between disciplines. The more we build around the same model, the more we get exponential effects. When we talk about barriers, the biggest barrier is coalescing around the same view and then working to mutually reinforce each other's interventions. There are two very basic pieces that you raised earlier in your interesting discussion. You are talking about an endemic lack of confidence within the culture in Scotland. Is there indications that that is improving? Secondly, can you teach entrepreneurship? Is that possible? Could you create a class in school that would teach somebody entrepreneurship? To address that question first, you absolutely can teach it. There are different definitions, but for the purpose of our discussion, let us put it this way, there is a bit of luck involved for sure. I am here with my track record with a bit of luck behind me. There is a mindset and there is technique. The greatest of those is technique. You can teach entrepreneurial technique. For example, why does the Silicon Valley in every generation of tech come out on top worldwide? It is called the Silicon Valley because it started off in semiconductors, but it does not do semiconductors now. In every epoch of tech, it comes out top. Why is that? Because it is a sufficiently large environment that in every epoch a whole bunch of companies start, most of them fail, the ones that survive the still best practice technique in that generation and it becomes a playbook. Because people move around companies, it becomes a shared playbook. Eventually, it reaches other parts of the world like Scotland. The playbooks are teachable. When you start to understand the playbooks, you start to change your mindset. If I was to say to somebody today, do you want to start a company? Well, if they do not know how to do that or how to grow a company or who to hire or how to create virality in a product or all those kinds of things, their answer is well, I am not sure about that. However, if that is normalised, people's mindset changes and the culture changes with that. Then what you see happening is that you get an exponential effect because the more exemplars you have, the more that attracts other people, the more expertise you have, the more successful companies you have, which creates more successful people, which starts more companies. There is a set of compounding virtuous cycles that start to establish themselves and that creates more confidence. That is why, when the convener asked me at the start, what are we looking at in measures, etc. I think that what you will see if we follow through in the policies that we are discussing today is an exponential increase number of companies that we have. Let us take an example close to my heart. I used to say in Sky Scanner that when people asked me what would be my measure of success for the company, I said that it would be if Sky Scanner spawns 100 other companies. That is the biggest measure of success for Scotland. What happens is that people go through the hellish journey that we all went through and it was not very easy. Take that experience and join other start-ups, which creates more Sky Scanners, which creates a bunch more employees, which leave and start other companies. That is literally an exponential effect. Another effect is that, in Sky Scanner, when we got to about 500 people, we could not hire a senior vice president of engineering in Scotland because there were not any at that scale. We could not bring one in from London or from the Silicon Valley because if they brought their family over here and they did not work out, they would have to relocate back again. Whereas in London, they could just walk down the road and go and get a job at Google or something like that. However, once you get to a critical mass of start-ups, you can attract talent to stay because if it does not work out, they just take a job next door. The same thing happens with investment. Right now, an investor in London can go and see 10 companies today on the Tube or come to Scotland and see one on a two-day trip. Therefore, they tend to stay geographically. However, once we get to a critical mass of companies, they can set up a presence here and spend more time here. Our task, from a confidence perspective, is to do enough to get enough companies starting to turn over that creates those flywheel effects. I think that confidence will follow that. I do believe that you can teach entrepreneurship. I do believe that you can overcome the confidence gap. You touched on Government policy, although you did not dwell deeply on it. Are there other deficiencies in Government policy? Are there things that need to be done? There are always deficiencies in Government policy in every single Parliament and every single Government on earth. I am not a politician and I am not affiliated to any party. I have been appointed by the Government of the day and I am proud as a citizen to try and contribute. I hope that what I am describing is politically neutral. It should be obvious to everybody that we need to be doing these things, and I really hope that it is. From the context that I have just described, I am pleased that we are focusing on this area and that someone is in this job. There are other people who can do the job just as well as I can do it. I am not claiming that I am a unique individual on this planet, but I am pleased that we have someone in this position. I am pleased that we have focus on the Ecosystem Review and its implementation. I am pleased that the Stuart review has been called forward. I am pleased that the inset document had a chapter on entrepreneurship. It might not have done a few years ago. That is all very encouraging, but none of the documents that I have just described are complete. All of them are directional indicators as to where we need to be going, so we need to keep adding them. Deficiencies exist in the sense that there is more that we need to do. For example, committed policy today is to do the tech scale network followed by the start-up scale work. The extension of that further into the community to address what I call scale deep companies. That is something that I am working on just now, but it is not policies that are not committed so that, in that respect, there is a deficiency. However, I prefer to put it that way. There is a direction of travel that we need to go on, and we need to stay the course. The challenge for you and your jobs is that the course is longer than the span of one Parliament. The course may see different Governments of different flavours come and go, and if we keep ripping up the plan and starting again and reassessing things, we are not going to get anywhere. I would urge us to find consensus on this issue as much as we can. I will give you an example. Finland is a country of about the same size as Scotland. There are about 5.3 million people, something like that. The most sparsely populated country in Europe, if you put those people across its geography. Estonia is a country of 1.3 million people. Finland, the last figures that I looked at, has about 3,381 tech start-ups, not encoding other start-ups, but just tech start-ups and scale-ups. Every year it produces a unicorn company. If you are not familiar with the term, a unicorn company is a kind of slang for a company with a £1 billion valuation that is still private. Estonia has three such companies already. Why is that? Because the policies that we are discussing today, the policies that I and others are advocating, they embrace them, they adopted them and they have run with them for an extended period of time, and the rewards for their economies are massive. Ten per cent of all exits that are called in companies sell or go back to IPO worldwide come from Finland, 10 per cent. That could be us, but we have got to stay the course. If Maggie Chapman does not mind, Gordon MacDonald has had a supplementary question, if you want to come in first, Gordon. Quite questions in the same area. That is fine. You said earlier on that there was a lack of exemplars in, you know, over recent decades we have lost large headquartered companies in Scotland, Scotland, Newcastle, Diageau, Bank of Scotland and so on. Now, you were talking about a lack of confidence. I am just wondering if that has been part of the impact of losing these large global headquarters. Secondly, a lot of companies, including Sky Scanner, instead of growing and continuing to grow to be a global company, sold out. Was it the reason for that lack of financial support or was it a lack of senior staff that you were talking about earlier on? Is there a barrier that, at a certain point, a Scottish company has no other option but to sell out in order to continue to grow? Secondly, university research depends on a lot of public funds. I am just wondering about the intellectual property rights and whether there is a need for that to be reviewed so that companies and entrepreneurs can harness that and help to grow the economy. Thank you for your questions. To take the first question first about when companies leave or when they sell, how should we think about that? I think that we need to get comfortable with the fact that any one company is going to take a certain path. Very often, a company will move its headquarters or will sell, etc. If we have enough companies growing to scale, we will not worry about that. Companies will take individual paths and there is an actual life cycle to companies, but we do not have enough companies to get a statistical critical mass where that does not matter so much. My way of looking at that is to think of it as a funnel. If you want more sky scanners, you need to have 100 start-ups for every sky scanner. That is the ratio or even more. We need to be thinking about how to create more and stimulate more very early stage companies. Some of those will become start-ups, some will disappear, some of those start-ups will become scale-ups, some will become unicorns all the way through the funnel. Our task is to try to widen the very start of the funnel by normalising entrepreneurship and to stop that leakage from the funnel. Not every company should become a scale-up, for example, but a company that is founded in Scotland should have the same ability to become a scale-up as it would have done in London. Because of some of the frictions that we have talked about, we lose a few on the way. The ecosystem review was trying to say what are the interventions to widen the funnel and to make its initial stage wider. If we do that, we will not have to worry about those cases. It is important to understand that if you are a founder, taking a company from day 1 to the size of a sky scanner in evaluation is an extremely difficult task. It is really tough and it takes a huge impact on people who are doing it. What keeps many of those founders going? What causes people to go into this business first place? It is often because they know that they can exit at some point. So, if we were to make companies selling seem to be a failure, that is a big mistake. That is not a failure that those founders think they have succeeded. Sky Scanner has created the numbers vary, but up to 1,500 high-paying jobs support has worked with hundreds of other companies in Scotland. It is now feeding new start-ups all across Scotland with its talent. It has brought generated great tax revenues and so on. It still continues to do that. It is not a failure because it is sold. The founders feel successful because they sold. Selling Sky Scanner for 1.5 billion give or take has created a huge amount of belief in Scotland that we can do that. We should not view those things as failures. Failure is if we are in a sparse environment where there is only every so often one sky scanner. We have got to increase the numbers. I think that when you do that, the rest takes care of itself. It is a good point that it was harder for Sky Scanner after a certain point to grow in Scotland because we could not attract that talent in after a certain scale. Would we have gone on independently longer if we could have attracted people with great IPO experience in the tech sector? Maybe we would have done that. What we had to do was open an office in London to attract that talent, and that meant that all over hiring was not happening in Scotland. That goes back to my point that if you have a critical massive company and you do not have to do that, you can bring the talent to Scotland because the environment is fertile enough that they will stay. It goes back to that point on scale. Your other question, Gordon, on universities, which relates to research and spin-outs and how we will do that. We are complacent in the university sector in Scotland. Complacency was our undoing back in the day when we were one of the greatest entrepreneurial nations on earth, and we are complacent now in the university sector. We conflate research with innovation. Research is not the same as innovation. Innovation is research that gets turned into products and services that get scaled to make an impact. That is a very different thing and it requires an additional set of skills. If you look at the muscateli report, which was commissioned into looking at spin-outs and all that stuff, it talks about the time that it was published that there were 1,200 spin-outs in Scotland with a 768 million annual turnover. That is not a success. That comes out to be on average like 48k a month annual revenue. That is not a success. We are a bit complacent about our performance there. Rather than trade statistics on us, I like to look at the inputs and ask myself, do we expose our undergraduates to entrepreneurialism? No. Do we have incubators for our students to go and start their own startups? No. How many technical entrepreneurial courses are there in any of our universities? Very few. Standford is 165, just for technical students alone. Do we regularly seek out best spin-out practice while we are wide and implemented locally? No. Do we carefully train our academics who are spinning out to be able to run a business? No. I could go on. You mentioned equity stakes. Some of our universities take a 50 per cent equity stake on their spin-outs. That is the best way to kill a spin-out, because I have already lost half my equity. I could go back to my point earlier about exiting. That is just dumb. I think that when you look at it from an input perspective, we are not yet world class, but we have great research institutions. How do we capitalise that asset in Scotland before it stops being an asset? I think that there is a need to shake that up in the entrepreneurial campus that I referred to when I was talking to Graham earlier, is one of the ways to really enliven that. I do not want to suggest that all universities are the same. Some are very far ahead and are leading and others are very far behind, but we have got to take that asset and leverage it in a way that we are not doing today. I hear what you say in response to Collin's question earlier about support. We should all be supporting entrepreneurialism and it should be politically neutral, but some of the consequences of how we do that are clearly not politically neutral. I am interested in picking a little bit some of what you have said in response to Collin and Gordon around scale, geography and the distinction between entrepreneurialism and innovation. As part of that, I hear what you say that having a start-up grow and selling it off is a measure of success. I do not disagree with that. Not all entrepreneurs necessarily want to do that or the company evolves in a way that it can carry on being innovative at a certain size and not continue to grow. I would be interested in how we make sure that we get that spread, that diversity of types of company and what we see is growth just in financial terms or innovation terms. Given what you say about the need for that ecosystem and the expertise, the skills, the knowledge and the know-how in a place, how do we make sure that we can be entrepreneurs all over Scotland, not just in the central belt or where lots of people gather anyway? That is an extremely important point. It is very easy for us in these kind of discussions to focus on what I would use the term scale-ups, because there are some obvious advantages with touching some of those to having them. We would obviously like to have them in the country, but we also need to think about what I would call scale-deep. If we think of scale as a spectrum, what do scale-ups bring? They bring tax revenues and employment, and they create exciting stories that attract people into entrepreneurship. That is all good, and there are other benefits. Scale-deeps tend to be companies that are not going to scale—maybe two employees, ten employees—typically far more distributed around the country. Importantly, their product or service tends to directly benefit the local community that they are in, in a way that scale-ups do not. I think that bringing more focus to scale-deeps is extraordinarily important from a societal perspective. I am sure that we have all noticed that Scotland has a lot of post-industrial, apocalyptic-type towns. A big part of addressing that is to bring focus to entrepreneurship in those areas, including social entrepreneurship. I do not distinguish social entrepreneurship from other entrepreneurship. It is about innovating to solve problems and to take and address opportunities. If we could stimulate scale-deep businesses, we would reduce our social security bill and make quality of life a lot better for our people. What is the relationship between that and everything that we have just talked about? There is a symbiotic relationship. I mentioned that scale-ups attract people into entrepreneurship, and that is good. However, if you want to have more sky scanners or Google, more Google and Facebook and so on, you cannot grow giant redwoods in a desert. You have to tend the forest floor. If lots of people in this country are confident about trying to start a business and do not fear failure and all that stuff and they are properly supported, then from those ranks you will see scale-ups that founders emerge as well, in addition to direct benefits that scale-deep bring. Over many decades, our industrial policy has flipped flopped a bit. You have had times when scale-ups are in vogue and tech is in vogue, and other times where it is not and there is more focus on community entrepreneurship. We have to embrace the fact that they are symbiotic and develop policy that focuses on both. I believe that you can do that. I want to bring in the other point that I made about connecting domains earlier. You can think of this as a horizontal domain in which we connect the different types of entrepreneurship and there is a vertical scale domain. All of them can exploit the same platforms and entrepreneurial infrastructure if you co-ordinate properly to do that. The challenges that early stage entrepreneurs have are the same, regardless of whether one scales up and one does not. Why not use the same infrastructure? The question is how do we take the emerging infrastructure that we are building here and extend it to properly support the scale-deep concept, rural entrepreneurship, social entrepreneurship, et cetera? In the upcoming Stuart review, which I am anxious not to pre-empt because it will be published soon, we have ideas that will significantly extend some of the ideas that we have talked about today to do just that. That is a great example, because if you think about one of the many reasons why we make it difficult or how we make it difficult for women to participate in entrepreneurship today, one of them is that our society is pretty sexist. A consequence of that is that we expect women generally to be the primary carer and home manager, which carries an enormous cognitive burden. It is much, much harder on average—it does not apply to everybody—but for primary carers to access the same city centre incubation spaces, for example, that someone else could. Why do we not take the scalar network and make part of it mobile and go to the places where primary carers are? They tend to live in a radius. You drop the kids at nursery, you go to the doctor's surgery, you go to the shopping mall and you have not got time to travel to the centre, so why do we not take them out to where they are and make them mobile pop-ups? That is an idea that has been tried very successfully in certain parts of the country. That is just one example, but I believe in summary the opportunity is to think about the infrastructure we are building as a platform, continue to evolve it over the next three, five and ten years, but think about it as a general solution and focus on scale-ups and scale-ups, because I do not think that that requires twice the effort, and I think that we will get ten times the benefit if we do. I know that there are other very important points contained in your question about limits to growth and what we mean by growth and what we are going to do to decouple growth from environmental and other damage. I think that those are all interesting questions. Maybe I do not have time for today, but we have big questions in front of us. However, taking a social enterprise and scaling it successfully is a great example of how we can grow and solve those problems at the same time. We tend to think of social enterprises as charities, and because we think of them as charities, when the money runs out, they run out. What if we gave them the same support and incentives that other founders have? How big would they get? How many societal problems would we solve without having to put more money in? Those are the opportunities that are available to us, I think. I will leave it there. I thank you so much for all of this stuff. You have teased us a few times over the course of this session about the Anastria review. I do not want to steal her thunder because I know something is coming out soon, but I am thinking about your role. I am heartened to hear how closely you are working with her because, in preparation for this session, I looked at the key areas, and I picked up the fact that there did not seem to be anything specific about actively encouraging female entrepreneurs, which, in my opinion, probably is not unsurprising, is a huge gap. So can you confirm that you see that squarely as part of your role? And two, are you able to give us any flavour of the thematics of what you hope to see coming out? What does an ideal world, an ideal Scotland for women entrepreneurs, look like? I will be careful about how I do that, Michelle, because, as you said, no-one wants to pre-empt the report. To your first question, I think that it is extraordinarily important that we address the appalling gender imbalance that we have in entrepreneurship. It just seems obvious that we would see that as a priority category one issue. Why would we do that? We all want a just society in Scotland. It is not just to have more barriers in front of one gender than the other. Frankly, we do have that today. Do we feel okay about that? I do not. Secondly, we have effectively removed a whole bunch of talent that we, in a tiny country of Scotland, desperately need. We need to de-anchor ourselves from the idea that normal is okay. It is not okay. I have been in my earlier career in sessions where a director has proudly boasted that we are going to increase the number of female directors by 10 per cent over the next five years, but 10 per cent of 10 per cent is 1 per cent. We have to ask ourselves whether we want incrementalism or do we want to do something more dramatic? I believe that dramatic is possible. To start to talk a little bit about the Stuart review, there are a lot of very good initiatives that are aimed at addressing the problem that has come along, and they do good. However, structurally, the problem is the same. Five years beyond, the gender gap in entrepreneurship is more or less the same. A very related gender gap is in tech, because a lot of the high-growth companies are tech companies. If women are excluded from the tech sector, or have more barriers there, that is a compounding effect on the problem that we are discussing on entrepreneurship. The problem is that, when we try to find solutions, we often look at the proximate causes. We say things like that. Women do not get as much investment as men, so we should have a women-only fund. Women do not feel as comfortable in incubator environments, so we should have a female-only incubator. We say things like that. Those are just examples. Those are not the actual causes of under-participation, so those solutions are temporary and get undermined by the deeper causes. If we want to properly address that as a nation, and I think that there is a huge opportunity to lead on that and get the benefits of leading, we have to look at the full tree of cause and effect. When we walk that tree, we will find that that part of it is our society, is sexist, has very embedded gender stereotypes, has a very embedded authority gap and we have to start asking ourselves how we address those root causes. While we are doing that, what mitigations can we put in place in the meantime? It has to be a portfolio response, so we are looking at the nature of the report. I think that