Scotland, long known for enterprise and technical innovation, is pushing to develop its nanotechnology sector.
The Scottish government has wooed Silicon Valley venture capitalists, touting the international links of Scottish companies and the research strengths — and spinoff potential — of Scottish universities.
The government is also increasingly making public funds available for high-tech development. It has created a $28 million “Fund of Funds” that will match investments made in Scottish companies by U.S. high-tech venture capitalists. Along with nanotech, the government is promoting activity in such areas as optoelectronics, microelectronics and biotechnology.
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According to the Scottish government, Scotland, with 9 percent of the U.K. population, produces 13 percent of its life sciences graduates. A quarter of British biotech companies have operations in Scotland.
Scotland now has autonomy within the United Kingdom. Creation of the Scottish Parliament in 1997 has fostered a stronger impetus for Scottish-based investment initiatives. These efforts are under the jurisdiction of Scottish Enterprise, Scotland’s national economic development agency. Scottish Enterprise’s Proof of Concept Fund has supported more than 40 commercial projects during the last two years.
“The key strength that we recognize in Scotland is our tradition of international research excellence,” said Clive Reeves, research and development manager for microelectronics at Scottish Enterprise.
The purpose of the agency, Reeves said, is to “encourage the migration of that excellent science into commercial opportunity.”
One method, Reeves said, is to offer universities funding to encourage researchers to demonstrate commercial applications of scientific ideas. Such demonstrations, Reeves said, would form the basis for either first round venture capital funding or licensing agreements.
Reeves said that Scottish Enterprise’s efforts have coincided with a growing awareness among venture capitalists and multinational corporations of Scotland’s potential. “It’s actually a coming together of mind-sets,” he said.
The most successful projects, Reeves said, will be those that offer innovation while meeting a market need.
Scottish Enterprise’s about $43 million Proof of Concept Fund supports a project only to the point where it is ready to be commercialized. The reason for this cautious approach is to avoid disrupting established markets. “Scientists,” Reeves said, “tend to drop an idea before the commercial opportunity has been explored, and they move to the next thing that’s going to take them closer to their Nobel Prize.”
Some projects, Reeves said, need local venture capital partners who can work with the management team to strengthen the company’s business skills. Other projects call for a good understanding of overseas markets and would fit more internationally oriented venture capitalists. “We’re encouraging the community to do what they call the reverse due diligence,” Reeves said, “which is to find the venture capital players that will best help the project.”
Ottilia Saxl, chief executive officer of the Institute of Nanotechnology, which is based at Scotland’s University of Stirling, said that the high quality of Scottish-based research is underlined by the existence of so much international collaboration in the scientific area.
Saxl said that, despite its location, the Institute of Nanotechnology is not a Scottish organization. “We consider ourselves at least European with tentacles out to the world,” she said.
One problem for Scotland, Saxl said, is that commercial projects for the semiconductor industry tend to require expensive laboratories. This tends to filter the work through the multinational corporations, which have the resources to fund the necessary research. But there are, Saxl added, niche opportunities in such areas as diagnostics and analytical sensor technology.
The Institute of Nanotechnology sponsors frequent meetings to encourage venture capitalists to consider nanotech. Saxl said that meetings in England can produce visits of venture capitalists to Scotland. Venture capitalists “know the Scots are kind of innovative,” she said. “And they will cast their beacon round some of the more innovative places in Scotland.”
The climate for nanotechnology has proved attractive for Livingston-based Blaven Technologies Ltd., which is involved in biotechnology and health care business incubation. Billy Mitchell, Blaven’s managing director, explained that the company’s Cambridge, England-based parent, Medical Marketing International Group plc, had been looking to broaden its scope when it sent him on a scouting expedition.
Mitchell discovered a very strong nanotechnology foundation in Scotland. “What I also found,” he said, “was that there was an interesting base from the silicon world that’s built up here and other technologies of potential for microsystems and microelectronic technology.”