- 10 Jul 2018
It is always a pleasure to return to London.
It's also a particular pleasure to come to this Futurefest. After listening to the news this morning – with the Cabinet meeting to agree a final Brexit position for what seems like the millionth time, and let's face it a mere two years after the vote - it's actually a genuine tonic to arrive at an event like this: an event which is all about focussing on some of the biggest issues of our age, and doing so with a real sense of realism, optimism and open-mindedness. I'm really grateful for the invitation to be here. I'm hugely grateful to Nesta for organising it.
Nesta are actually neighbours of the Scottish Government in our London offices on the Embankment. More importantly, though, they are close partners of ours in much of our work in Scotland.
We currently work with NESTA on issues such as digital health; using collective intelligence to help young people in the jobs market; and harnessing data science to map economic activities. And we are developing even more exciting plans for collaboration in the future.
One reason for that is that Nesta's mission – using innovation to tackle social problems – really does define what the Scottish Government aspires to be all about in Scotland.
Innovation is in Scotland's DNA – it's a key part of our history, it speaks to our very sense of who we are as a people and as a country. Inventions and discoveries from Scotland down the generations - from James Watt's improvements to the steam engine, through to the telephone, the television and pencillin - have done so much to shape the modern world.
But innovation's not just about the past. It can't just be about the past. We know that know that innovation is central to our future prosperity, success and to our future wellbeing, and that's why we've made promoting innovation the central focus of our economic policy.
We're investing heavily in innovation centres which bring together our university researchers and industry. We've recently started establishing a new manufacturing institute to develop our strengths in modern methods of advanced manufacturing. And we're also in the early stages of setting up a new National Investment Bank because we want to provide the sources of long term patient capital that allow our most entrepreneurial and ambitious companies seeking to tackle the big challenges of our time the finance that they need to thrive and to succeed.
We're also very aware, and I think governments actross the world should be even more aware of this – of the massive purchasing power of governments and the public sector. How public sector procurement, if used properly, encourage and drive innovation. For example we've established an initiative which is called Civtech, which invites entrepreneurial tech companies to pitch ideas which can address specific public sector challenges. It's a great way if solving those challenges in our public sector but also doing that in a way that helps us to develop new companies and new ideas.
At the core of CivTech lies the ambition to solve societal challenges collaboratively, and then export the solutions to the rest of the world.
In some ways, that could almost serve as the Scottish Government's mission statement for Scotland's economy. We want Scotland in the future just as we have in the past to invent, design and manufacture the innovations and products that will shape the world of tomorrow, not simply to be a country that's consuming and using the products that are invented, designed and manufactured elsewhere.
But we also want to ensure that those innovations don't just benefit big business but benefit wider society as well.
Because the fundamental issue we're addressing today goes beyond economics. The title of this session - How can Government shape the future? - raises an important issue.
Governments around the world right now have a choice. We can be passive in the face of technological change - continuing to govern without acknowledging or adapting to the new world in which our citizens live - or we can be active participants, seeking to ensure the economic advantages of new technology are captured - not just by major corporations or entrepreneurs, but by society and for the benefit of society as a whole.
That starts with a very basic issue – how we measure our own success as a nation. A couple of weeks ago the Scottish Government launched our new National Performance Framework – it was the result of a widespread consultation across all aspects of Scottish society. One of the key aspects of that framework, and that framework is all about setting the purpose of our country and then deciding the objectives and benchmarks by which we measure success. The key aspect of that is it's not just about measuring economic success, but it recognises that sustainable economic growth is essential, but it also emphasises increased wellbeing as a key indicator of our country's success. That means that we measure very deliberately social and environmental progress together with the economic output of the country.
We recognise that being a wealthier nation, has to be the means by which we become a fairer, healthier, happier country as well.
In order to achieve that, governments can't just promote innovation in their economic policies - they must also adopt innovation in their social policies.
Scotland in many respects in a very strong position to do just that. As a country of 5 million people, we can be agile and active in response to both social and economic issues. We can also learn from our neighbours – both here on these islands, and around the world – and adapt their lessons and experiences to our own circumstances.
And so what you can see from Government in Scotland is a sustained effort to use innovation and new technology, to address the intergenerational challenges that affect societies around the world.
The transition to a low carbon society; adapting to an ageing population, the rise of automation and artificial intelligence; these are all opportunities to lead, as well as challenges to be overcome.
We want to seize those opportunities; and we also want to ensure that no one is left behind as a result of the changes that we are leading.
A good example of that approach is climate change. It is arguably the greatest environmental, economic and moral issue currently facing the planet. Taking action – especially for developed nations like ours – is an overwhelming moral imperative. However it is also a massive economic opportunity for countries that put themselves in the vanguard of change.
And so Scotland, for moral and pragmatic reasons, is trying to do that. We are currently the second best performing country in Europe for reducing carbon emissions. That's partly because almost 70% of our gross electricity demand now comes from renewable energy. In fact the world's largest tidal array, the world's first offshore floating windfarm and the world's most powerful offshore wind turbines are all currently in Scottish waters.
If you allow me to digress here for a moment, the 11 offshore wind turbines are located just off the coast of Aberdeenshire, and a few years ago you might have heard of these turbines because a famous golf course owner from America, who I think has now turned his hand to politics, decided to take the Scottish Government to court to try to block these wind turbines because he thought they spoiled the view from his new golf course. I'm very pleased to tell you today that the Scottish Government beat that American golf course owner in court, and just earlier this week these amazing wind turbines generated their first electricity.
They are engineering marvels, and they also – very importantly - will soon generate enough electricity for almost ¾ of the homes in Aberdeen.
So we will continue promoting renewable energy projects like that - but we are also now focussing on other issues such as transport.
We have set an earlier target date than the rest of the UK for removing the need for new petrol and diesel cars and vans – we've gone for 2032 rather than 2040.
We're now launching challenge funds to help local authorities test new approaches to encouraging electric and hydrogen vehicles.
Again, there are moral and economic reasons for this. All of us will benefit from cleaner air through low emissions vehicles. But also, Scotland already has significant expertise in areas such as smart grids and battery storage so we're choosing to build on those strengths.
If we can create a market, and offer Scotland as a platform for testing new ideas, we can encourage early investment in new technologies which could be used around the world. We can create jobs and investment, while improving our health and our environment.
And as we do that, we know that the move to a low-carbon world will fundamentally reshape our economy and our society. And so, learning from previous industrial revolutions, we are setting up a Just Transition Commission. It will help us to consider employment issues when developing climate policies, so that we can make a fair and effective transition to more sustainable jobs and economic sectors.
It's an important sign that we don't simply want to lead the world towards a low carbon future, although we do. We also want to ensure that the changes we lead benefit the whole of our society.
We're adopting a similar approach to artificial intelligence and big data. Again, this is an area where Scotland has major economic opportunities.
Our cities are becoming established as major tech hubs – companies like Skyscanner have been major success stories in recent years. That's partly because of the quality of our university research. Edinburgh University's School of Informatics is ranked as the best of its kind in the UK.
That's why we're promoting new industries such as fintech, and it's why we have invested in The Data Lab – an innovation centre which brings together government, university researchers and businesses.
And again, we want to ensure that the innovations we're encouraging benefit wider society.
I mentioned earlier that adapting to an ageing population is one of the challenges – a hugely welcome challenge, I should add – that all Governments face. It's something which Scotland is addressing in a number of ways – for example we integrated our health and social care systems at a time when other parts of the UK are only talking about doing that.
We also know that data can play an important role in improving the services for older people.
That's why the Data Lab recently worked with the NHS Scotland and the Scottish Government on the issue of delayed discharge. That's where patients are well enough to go home, but have to stay in hospital because arrangements can't be made for the social care they need.
It's an issue which causes unnecessary discomfort to patients, and it is also very expensive – it costs approximately £140 million a year in Scotland.
So the Data Lab is building an algorithm for predicting which patients are most likely to be affected by delayed discharge. When the algorithm was checked, using a sample of 13,000 patients, it correctly predicted 124 of the 131 people who were affected.
Now, the algorithm also predicted a lot of false positives. It still needs to be refined, and turned into something which can be used in a clinical setting. But the potential to identify patients who are at risk, and then to take early action to correct this, is already obvious.
It's just one of the ways in which the use of data can bring significant social benefits. Another innovation centre the Scottish Government is supporting is for stratified medicine – that's where data enables treatments to be customised to the characteristics of individual patients. Again, it's an area where Scotland has huge potential to generate economic opportunities while improving people's wellbeing.
Of course for all the many advantages of the technological revolution, we also know that there is genuine concern about potential disadvantages – the misuse of personal data; the likelihood of job losses in some sectors; the risk of exploitative employment practices and of rising inequality levels.
So exploring new ideas, and being open to different ways of doing things is going to be essential.
That's one of the reasons why the Scottish Government is now supporting local authority pilots on a universal basic income. An idea which, I think, is worthy of exploration. It may ultimately prove not to be practical but that's one of the reasons to support pilots. It's all about being open minded, open to new ideas, because these kinds of advances are going to be important if we do what I'm talking about today – support that technological change, lead that technological change, without disadvantaging huge swathes of our population.
We also working closely with trade unions. We've worked closely with Scotland's trade unions in recent times about the impact of automation, highlighting the importance of investing in skills throughout people's lives – so that they can adapt as technologies change.
We established a group that's looking at the Collaborative Economy – including the rise of platforms such as AirBnB and Uber.
Its work is looking at how we reconcile the challenges that are always seen as being in conflict, of how we make that sure that platforms like those don't do harm, but at the same time how we capture the benefits that they can bring.
Our full response will be published shortly. However one of the steps we are taking is the launch of something called Sharelab Scotland - it's another Scottish Government collaboration with Nesta.
Sharelab is a fund which will provide financial support – and also mentoring and advice – to organisations whose platforms provide social benefits. It will have a strong initial focus on sustainable energy and transport – especially in remote communities. However it will also consider other projects which can help or empower disadvantaged communities and individuals.
It's a further way in which we can promote a major economic and technological change – the rise of collaborative platforms being an example of that – in a way that doesn't exploit people in our population but instead benefits our economy, our society and our environment.
The final point I want to make this morning is related to the video that you're about to see. It's called "Scotland is now", and it should be viewed - not just as a description of Scotland, but as an invitation to the rest of the world.
Scotland's openness to new ideas includes an openness to new people, to new talent. At a time when too many politicians across this country and many countries in Europe want to talk, often erroneously, about the negatives of migration and of people travelling across different countries, the Scottish Government has a very different message that we want to spread far and wide. We want people to come to Scotland. We want people to do us the honour of making Scotland their home, and join with us in building the forward-looking, positive, progressive country we want to be.
So although I am well aware that London is a great place to live, as are many other parts of these islands - if any of you are thinking of moving, Scotland is not full! You would be welcomed with open arms!
But also, our desire to attract new talent is a further reason for ensuring that Scotland is one of the most attractive countries in the world to work in, to study in, to live in, to visit, and to have new ideas in. We understand that the vibrancy of our cities, the beauty of our landscapes and the quality of our public services – they contribute to, and benefit from, the dynamism of our economy.
And in some ways, of course, that takes me back to where I started – with the importance of focussing on wellbeing together with sustainable economic growth.
I want Scotland to be a world leader in scientific advance and technological progress. In many areas we already are.
But I'm also conscious of the need to ensure that technological progress aids rather than hinders social progress. In fact, I see that as one of the key roles of government. It's not enough simply to encourage technological progress- we also have to ensure that everyone can share in its benefits.
If in Scotland we can go even part of the way towards achieving that, we can create a fairer and more prosperous Scotland – and we can also, perhaps, play a part in creating a fairer and more prosperous world. We can fulfil the mission I spoke of earlier – of helping to solve societal challenges, and then exporting the solutions around the world.
As we look to achieve that, it is wonderful to have partners such as Nesta, who view the future with realism, idealism and optimism. And it is great to be able to draw inspiration from events such as this.
So I'm delighted to be at Futurefest, I wish you all well for the rest of the conference.