Silicon Valley has become an icon (or a cliche depending on your taste) for innovation, entrepreneurism and technology. Cities and Governments all round the world seek to imitate its success.
Scotland has long since harboured similar ambitions. Is imitation the sincerest route to success? Or should we learn the lessons and then map out our own route? What are the unique opportunities available in this Northern outpost?
Of course we should start by thinking about what works elsewhere in the world. For example, the Bay Area is not the only cluster for exciting new business activity in the US. Innovation That Matters is just one recent report. It looks at cities that stretch from sea to shining sea. It concludes that Boston is best prepared for the digital economy. Not San Francisco or Palo Alto or New York.
Specialise for success
I am not going to argue with that conclusion. My interest is in the factors that drive future success. One in particular. The report highlights the need for specialisation. It will no longer be possible for any city or ecosystem to lead new technology across the board. A strong reputation in specific sectors or technologies is needed.
And the authors identify one sector at the forefront of this trend. Digital health comprised 60% of all startups in the 25 US cities studied. More significant health was also the focus of 60% of the fastest growing companies.
Embracing our diversity
Taken together this analysis offers some ideas for a different startup world like Scotland. We need to start by recognising and embracing our differences.
A new era of opportunity
Recent years have added to this mix. We have seen an amazing rise in talented people starting businesses of wonderful potential. But it would be foolish to deny that the depth and scale of our technology sector is tiny. In comparison to many US locations and even Europe, Africa or Asia.
And the new era of digital and mobile is a chance to overcome our traditional disadvantages. Distance and isolation are no longer a barrier. Scotland can be at the heart of global ideas and the the global economy. Positions we have not occupied since the Enlightenment in the 18th Century. And Second City of the Empire days of the late Victorian era.
Health is our greatest challenge and our best opportunity
Specialisation has to be the way forward for a small country. And health could be a great platform for Scotland. Life Sciences are a vigorous sector of our academic and business life. Our areas of wilderness and our range of wonderful fresh produce offer a rich choice of healthy lifestyles.
And yet… life expectancy in Scotland is 2 years below the UK average. Almost 3 years less than England. The City of Glasgow has the lowest life expectancy in the whole UK for both men and women. No satisfactory social or economic reasons have been advanced for this.
We have a genuine problem in Scotland. The skills and desire to tackle it are in place. Our Government and citizens are wholly committed to devoting resources to finding and implementing solutions. All we need is a platform for change.
Learning from the history of Silicon Valley
Here is my suggestion. We spend over £12 billion per annum on the NHS. Public and media debate centres on this as a cost. Willingly borne to be sure. But viewed as a drain on our finances. An ever rising burden which we fret about our ability to support in future.
Perhaps we can break this cycle by learning a lesson from the past. Remember the root of Silicon Valley’s success? It was Department of Defence spending in California during the post war decades. The US Navy was the customer that challenged smart people with big, difficult problems. And provided the market for the solutions.
We cannot and should not replicate that today. But we have an alternative - the NHS budget. Change the culture and the approach. Use that £12 billion as the catalyst for innovation. In digital technologies and life sciences of course. But also in service delivery, care standards, sustainable building, rural health and a thousand other areas.
Thinking about this idea reminds me why I got into the information and communication technologies in the first place. Tech has the power to change the world. By tackling the biggest challenges.
I think we could turn this principle full force on local and global health challenges. How can we transform the NHS from a cost centre into our greatest opportunity for change? I would love to hear your ideas.
Kenny Fraser is the Director of Sunstone Communication and a personal investor in startups.