Scotland 5G Centre (S5GC): evaluation

Wave 1 Impacts

3.1 Introduction

In 2022, the S5GC commissioned an independent assessment of the impacts of the Wave 1 projects.^[9] This considered impacts in three respects:

• follow-on funding that would not otherwise have been secured.
• attraction of staff to the partner universities as a result of the projects.
• attraction of overseas PhD students to the partner universities as a result of the projects.

The report notes that the impact assessment was informed through consultations with each of the three recipient beneficiaries, and that the data used for the analysis was taken at face value during the consultations. It intimates that the analysis does not constitute a full economic impact assessment. The approach followed HM Treasury Green Book principles which identifies five additionality factors that inform the conversion of gross to net impacts (deadweight, displacement, leakage, substitution, and multiplier effects).

We consider the approach taken to be reasonable in the circumstances.

3.2 Results

The assessment found that the large majority of the impacts of the Wave 1 projects were attributable to the University of Glasgow 5G Testbed and were driven for the most part by:

• follow-on funding of £10 million from the EPSRC and £10 million from UK Government (DCMS).
• significant expansion in the team at the university of Glasgow (which reportedly increased from 40 to more than 100).
• 10 post-docs and 10 PhDs engaged as Research Associates.
• an additional 70 PhD students, of which 60 were from overseas, generating c.£2.4 million in additional fees for the university.

These were identified as benefits that would not have happened without the investment from the S5GC.

The assessment assumed that both the University of Strathclyde and Infralink projects produced no additional impacts (a conservative assumption). Thereafter the assessment made reasonable assumptions regarding displacement substitution and leakage effects and applied standard multipliers for research and development activities.

The assessment found that the net additional Gross Value Added (GVA) associated with All Wave 1 Projects was £13.93 million, a return on investment (ROI) of 1: 3.67. Taking the University of Glasgow project alone, the net additional GVA was calculated at £15.04 million with ROI of 1: 9.4. The higher impact for the University of Glasgow project alone is due to an assumption of 0% displacement compared to 10% for the All Wave 1 Projects assessment.

On this basis, this certainly represents a good return on the investment into the Wave 1 Projects.

It is worth noting that the assessment is based on total investment made by the S5GC into the Wave 1 projects of £3.8 million of which the Scottish Government provided contributory funding of £1.5 million, as evidenced in the invoices issued to Scottish Government (see Section 2.6.10)

The report also noted that the development of 5G test bed capability through the Wave 1 projects not only significantly enhanced the funding potential for the two universities but also enhanced Scotland’s competitive position relative to competitor locations. It also highlighted a strengthening of partnerships with industry as an additional benefit.