Sustainable Aquaculture Innovation Cluster (SAIC): business and regulatory impact assessment 2026

Section 1: Background, aims and options

Background to policy issue

The Scottish aquaculture sector is a strategically significant industry for Scotland, underpinning economic growth, rural and coastal employment and the nation’s global reputation for high- quality seafood. However, the sector faces persistent challenges in productivity, sustainability and innovation.

Scotland’s aquaculture sector faces growing pressure to improve productivity, resilience and environmental performance while operating complex commercial and regulatory environments.

Scotland’s Aquaculture sector is a key contributor to rural employment and exports, however the sector faces:

• Rising environmental pressures such as sea lice, water quality, benthic impacts
• Slowing productivity and significant mortality
• Increasing public scrutiny
• Fragmented innovation landscape
• Growing international competition

This reflects well-established market failures, including:

• Knowledge spillovers: Companies underinvest in innovation because benefits are not fully captured by the investor
• Coordination failures: multiple actors are required to collaborate for innovation projects.
• Risks and uncertainty: innovation projects have uncertain returns deterring private investment.
• Information asymmetries: companies may lack awareness of relevant research, funding opportunities, or technological developments.

Without intervention these market failures are likely to persist, constraining sector performance and international competitiveness.

Purpose/ aim of action and desired effect

The overarching objective is to improve the long-term productivity, sustainability and global competitiveness of the Scottish aquaculture sector by strengthening innovation and collaboration.

The establishment of the new SAIC as an independent entity is meant to address these failures. SAIC can assist with the following objectives:

• Enhancing coordination between industry and academia
• Improving knowledge transfer and skills development
• Support sustainable growth across the sector.

Options considered

1. Do nothing Benefits:

• No additional public expenditure
• No organisational or governance complexity

Risks:

• Continued fragmentation of innovation support
• Limited coordination between industry and academia
• Reduced ability to attract private investment
• Missed opportunities to improve productivity, sustainability and competitiveness
• Limited ability to respond to strategic priorities and emerging challenges

2. Constitute a new independent legal entity (preferred option) Benefits:

• Allows public sector and CES contribution
• SG + CES governance input
• Allows UK or private sector funding
• Alignment with SG policy direction

Risks:

• Support required in the initial set-up
• SG/CES governance arrangements may be complex
• CES appetite yet to be fully understood

3. SAIC functions are assumed by the University of Stirling (UoS) Benefits:

• Institute of Aquaculture has strong links with SAIC

Risks:

• Perpetuates stakeholder concern regarding existing delivery
• Progress would depend on UoS internal priorities
• UoS may have limited ability to resource SAIC, even with grant support
• Limited appetite within UoS

4. New host academic body Benefits:

• Organisational synergies and efficiencies from using the host’s corporate functions
• Could allow SG to be more flexible with available resources and policy priorities

Risks:

• Agreeing a new host would be complicated, costly and time-consuming
• Progress would depend on the new host’s priorities
• Scottish universities are under significant resource pressure
• Limited appetite among suitable institutions

5. CES hosts SAIC as part of ongoing operations Benefits:

• Longer-term access to financial and hosting resources
• Alignment with SG direction and easier SG input
• May allow UK or private funding

Risks:

• Could complicate CES relationships and operations
• Limited appetite for direct management
• Progress would be subject to CES priorities

6. HIE hosts SAIC as part of ongoing operations Benefits:

• Longer-term access to financial and hosting resources
• Alignment with SG direction and easier SG input
• May allow UK or private funding

Risks:

• Could complicate HIE operations
• Very limited appetite based on recent experience with subsidiary bodies

7. A new finfish industry‑led innovation body Benefits:

• No SG resource or financial requirement to stimulate progress
• Allows SG more flexibility with resources and policy priorities

Risks:

• Salmon‑specific focus likely to prioritise short‑term goals
• Limited or no attention to non‑salmon concerns
• Does not support wider SG policy aims (environmental impacts, climate adaptation)
• Politically challenging to channel public funding to a salmon‑sector body

Sectors/ Groups affected

The new SAIC will serve the full Scottish aquaculture ecosystem:

• Aquaculture producers
• Micro and small aquaculture businesses
• Academic and research institutions
• Rural and coastal communities
• Supply chain companies

Geographically, impacts are expected to be strongest in coastal and island communities where aquaculture is a key employer.