Energy: Evaluation of Interventions with Clusters and Industries

The Evaluation of Intervention with Clusters and Industries in Scotland aims to be a learning evaluation for Scottish Enterprise (SE) on the policy interventions pursued to date. The research objectives for this study focus on five principal learning areas: the appropriateness of cluster and industry policies and strategies; the rationale of programme selection and design in the light of strategic intent; the efficacy of cluster and industry interventions seeking to improve critical factor inputs; learning lessons and the adaptation and evolution of the approach; and broader SE support and resourcing. This report is one of the fifteen cluster- and industry-specific reports that have been prepared as background to the main report. In relation to the energy industry (EI), the report focuses on: the rationale behind SE involvement in the cluster and the appropriateness of the strategy; how the cluster work has rolled out in practice and in light of expectations; and the lessons learnt and how SE should go forward.

The report has been primarily based on a desk review of the individual clusters and industries - collected and collated by SE and ECOTEC jointly. Approximately 22 interviews were then held with appropriate industry representatives, knowledge centres, intermediate institutes and previous and current SE staff. The main findings and conclusions have been tested with independent sector experts and reviewed by relevant SE stakeholders.

The report concludes that the EI is, and remains, strategically important to Scotland and a major contributor to the national economy in GVA and employment terms. Observations made from an understanding of the industry based on the documentation review and stakeholder interviews point to a range of failings, particularly among small and medium-sized enterprises (SMEs). Given the large SME base, the existence of market failures and industry opportunities across a range of “value generators,” public intervention is justified. Senior industry figures held in good regard the professionalism of the advice offered by the SE team. Confidence in the industry has increased and its image continues to improve. It is not possible however to discern the contribution made by SE in either the export rise or from the indicators of change, due to the lack of available information. It is suggested that the developments in the oil and gas sector generally would have happened anyway. However, this compares with renewables, where it is suggested that SE had had a greater additionality; and fuel cells, where it is argued that the achievements would not have been realised without SE. Due to the difficulties in measuring the impact of public sector interventions of this type, it was impossible to make an overall judgement on impact of the work of the energy team.

There is a need for better information management to justify the link between proposed activities on the ground and the achievement of realistic outputs, appropriate outcomes and GVA. In this regard, it is essential to have effective performance management to enable the industry team to demonstrate the level of industry interventions, the value added derived and their successes in market penetration.