Scotland 5G Centre (S5GC): evaluation

Summary and Conclusions

6.1 Introduction

As noted throughout the report, for a variety of reasons it has not been possible to provide an estimate of the total quantifiable impacts of the S5GC. These reasons include:

• inconsistent reporting as a result of changes in objectives and KPIs over the life of the S5GC.
• limited performance data against KPIs.
• detailed information on business engagement only available for two years of operation (2023-2024 and 2024-2025).
• the small sample for the primary research.
• legitimate questions over the attribution of impact in some areas (for example, investment levered via funding bids).

It is also the case that the S5GC operated in an area of new technology in which the market was not yet mature, with a strong focus on innovation and proof of concept projects. As such, the economic impacts are likely to arise over a longer time frame, which is common with innovation programmes of this nature.

The S5GC faced a number of operational challenges relating to funding, personnel, governance, and stakeholder relationships which at times impacted its performance and may ultimately have limited its impact.

These issues notwithstanding, the evaluation found evidence of impact, and the following section summarises these findings and draws some broad conclusions.

6.2 Early Impacts

The S5GC’s early focus on the research activities of the founding partners appears to have been successful insofar as it has led on to further research investment and activity and attracted research talent to Scotland. It also enhanced Scotland’s international reputation as a centre for research into 5G technologies and developed stronger partnerships between the universities and industry.

It is reasonable to expect that in time the outputs of this research activity will find commercial application via spinout companies or other forms of knowledge exchange activity. The eventual economic impacts of this will take some time to materialise – often years after the research activity – as is normal in research commercialisation.

On this basis, the investment made into the Wave 1 Projects should be considered to have delivered a good return in terms of impact.

6.3 Impacts on Business

The shift towards greater business engagement was initially only partially successful as the 5G Connect Hubs generated less engagement than originally hoped. However, for those businesses that did receive support for 5G projects, this does appear to have been useful and impactful. The evidence suggests that these projects delivered a variety of benefits and impacts for businesses (and public sector organisations) including:

• cost savings and avoidance: reduced downtime, avoided unnecessary expenditure, prevented stock losses.
• productivity and efficiency gains: improved processes, reduced waste, enhanced monitoring and control.
• new revenue and market expansion: enabled new products/services and attracted new customers.
• safety and risk reduction: enhanced worker and operational safety through real-time monitoring.
• environmental and sustainability benefits: lower carbon emissions, reduced energy use.
• enhanced connectivity and digital infrastructure: provided robust, high-speed connectivity for advanced applications.

Importantly, our own data suggests that the level of overall additionality of the support was high with most beneficiaries reporting partial or full additionality.

The S5GC’s own quantified impacts seem for the most part to be based on reasonable assumptions or on estimates provided by the companies supported.

Table 6.1 below compares the reported impacts of 2023-2024 and 2024-2025 (the years for which data were available) to the expenditure of Scottish Government funding by the S5GC in those years. This is indicative only and does not constitute a full analysis of return on investment for a number of reasons, namely that:

• the reported impacts are for business engagements only and do not include other impacts (for example, investment levered).
• the impacts are those reported by the S5GC using the assumptions detailed earlier - they have not been subject to independent verification.
• not all of the expenditure will have been incurred in business engagement and support activities.
• the impacts are gross and do not take account of factors such as additionality or displacement, which would be required to estimate net impacts.

These factors notwithstanding, the comparison suggests a modest, but not negligible, level of impact for the expenditure incurred.

Source: S5GC impact data and SG invoice data

It is also worth noting that in many cases the support provided by the S5GC was for early stage innovation and proof of concept projects. As such, these will require further commercialisation support (and possibly funding) to realise their potential economic impacts. We did receive some comments from businesses that the S5GC could have had a stronger focus on this downstream commercialisation.

On the other hand, it is true that the S5GC had limited resources, and funding was reduced and then stopped before further work could be done with many of these projects. There are also other parts of the innovation support system in Scotland that can pick up later stages of the commercialisation process (for example, Enterprise Agencies) and the issue here may be that the S5GC was not sufficiently well integrated into the wider ecosystem.

6.4 Investment into Scotland

The S5GC has been involved in numerous successful bids that have secured sometimes significant levels of investment into 5G innovation projects in Scotland, often from UK sources such as the UK Government and Innovate UK. This is positive, and feedback from the consultation work suggest that the S5GC has added value in many cases.

However, there may be some examples in which it is harder to justify attribution of the investment directly to the S5GC. In the case of the follow-on funding for the Wave 1 Projects we were told that this would not have happened without the initial funding from the S5GC, but in other cases (for example, some of the Innovation Regions funding) we understand that the S5GC was less directly involved in bidding.

It is also difficult to determine an overall figure for the total value of investment that the S5GC has brought into Scotland either from the available reports or directly from the Scottish Government (which has not been provided). Instead, all that it is possible to conclude is that the S5GC has helped to bring additional (welcome) investment to Scotland for 5G innovation projects.

6.5 Wider Impacts

The S5GC also had objectives relating to improvement of 5G coverage and awareness and understanding of 5G technologies.

In respect of the former, the S5GC did not have an explicit remit to improve coverage but rather to work on the development of technologies and projects that could improve coverage. It would therefore be unfair to judge the S5GC on whether or not 5G coverage has improved in Scotland (which it has^[10]). It is also the case that some of the projects supported by the S5GC could help improve coverage (and uptake) of 5G, including the Wave 1 research outputs. However, achieving better 5G connectivity across Scotland requires engagement with the network providers, and the S5GC did not develop long-term strategic relationships here.

As to raising awareness and understanding of 5G, the S5GC clearly did deliver at least for those organisations with which it engaged, and it maintained a presence through events both its own and those run by partners. However, some of the consultees noted issues with 5G terminology, considering this limiting and also too associated with consumer mobile connectivity rather than industrial application of private 5G networks.

It was felt that advanced wireless connectivity might have been a better term to use.

6.6 Final Comments

The S5GC has delivered a range of impacts for businesses and for Scotland over its five year lifespan. A range of factors impacted on the S5GC’s delivery and ultimately its impact. As a result, it is hard to escape the conclusion that while much was achieved, the S5GC could have had greater impact had some of these issues been resolved or avoided.

In particular, we suggest that the S5GC’s impacts could have been enhanced with:

• a more stable long-term funding platform.
• clearer objectives and target outcomes/ impacts from the outset and throughout.
• stronger, more strategic partnerships with the MNOs.
• better integration within the innovation support system in Scotland.
• potentially, a focus on a smaller number of larger projects that could have greater strategic impact for Scotland.