Organic growth: Why Scotland's £10.5bn life sciences sector feels undervalued

Scotland’s life sciences industry is big business. The sector is worth over £10.5bn to the economy, with world-leading research and manufacturing taking place up and down the country. But for Mark Cook, the co-chair of the sector’s Industry Leadership Group, this number is just the beginning. In fact, he feels that the Scottish life sciences sector doesn’t get half the plaudits it deserves. 

“We’re a £10.5bn sector and we don’t really get the same amount of political mentions as some of the other sectors because it’s so new and people are not familiar with it,” Cook says. “But if you look at something like Scotch whisky, which we talk about a lot, it’s £8bn. So we are actually one of Scotland’s most significant, fastest-growing deep growth sectors. That’s why we’re one of Scotland’s industrial strategy plays, because it’s something that we can be good at and succeed at.”

Writing in the industry foreword of the catchily titled Life Sciences Strategy for Scotland 2035 Vision published by the Scottish Government in late 2025, Cook said the sector had “unique strengths” that set the stage for the eventual goal of growing the turnover of Scotland’s life sciences sector to £25bn by 2035. 

Commenting at the launch of the strategy, Richard Lochhead, the then business minister, said the plan would “harness the power of the triple helix” and make use of new technologies “such as artificial intelligence” that have the power to revolutionise the way medicine is developed to help reach the Scottish Government’s goal. 

The “triple helix” that Lochhead referenced is the much-vaunted potential for collaboration between industry, academia and the public sector that, in theory, unlocks a virtuous loop of innovation and growth. 

One cornerstone of this potential innovation loop is the £750m investment made by the UK Government in the Next National Supercomputing Service (NNSS), hosted by the EPCC (formerly the Edinburgh Parallel Computing Centre) at the University of 
Edinburgh. 

The EPCC currently hosts ARCHER2, one of the UK’s most advanced supercomputers, and has served as a destination for researchers from across the UK who have used the supercomputer to model everything from climate change to engine design and drug discovery. The next system is predicted to be around 50 times more powerful than the UK’s current national supercomputer and is scheduled to come online at the end of 2027. 

“There’s been lots of work over the years at Edinburgh by people researching cell boundaries,” says Professor Mark Parsons, director of the EPCC. “You want water to be able to get into the cell, but you don’t want many other chemicals to get into the cell. The cell needs to be picky. So work was done on the computer, where for the first time, we properly showed how the water molecule flips suddenly so that it can get through the cell wall, but other molecules can’t. So, it’s these sorts of really deep, really complex models that supercomputers tend to be used for in the biosciences area.”

During the pandemic, researchers from across the UK virtually descended on the EPCC in an effort to understand the disease. A team led by Kenneth Baillie, professor of experimental medicine at Edinburgh University and co-director of the Baillie Gifford Pandemic Science Hub, focused on trying to better understand the spread of Covid across the UK.

“That capacity to do really big computing enabled us to, within five months of the first case, look across the entire genome of thousands of people with their DNA and ask the question, ‘What is different about the people who end up under my care in the intensive care unit compared to people who are random members of the population?’” Baillie says.

The outcome of Baillie’s research was a breakthrough that discovered a genetic clue which led directly to one of the first effective treatments for severe Covid, a world-first example of translation from host genetics to drug treatment in an infectious disease. 

“Within a week of us making that discovery, we’d discussed it at the UK Scientific Advisory Group for Emergencies and made the decision to try that drug in Covid patients,” Baillie says. “It then took a little while because you have to try it on thousands of people, but the drug worked, and we proved that it worked. That’s one of probably 10 examples in human history where we’ve gone from a genetic signal straight to an effective drug. And the only time that I’m aware of in infectious disease, they’ve gone from a whole genome signal to finding a treatment that worked.”

Baillie says that by using the computing power provided by the EPCC, the team was able to upload vast amounts of patient data into a secure environment which would not have been possible using normal computer systems, accelerating the rate of research and reducing the amount of time needed to approve the drug for use in patients. 

Cook highlights computing facilities such as the EPCC, and the AI-powered machine learning they enable, as potentially “game-changing” factors in the development of Scotland’s life sciences sector. 

“We are able to do things in maybe not hours, but days and weeks that might have taken years,” Cook says. “I think that we will see some tremendous leaps forward and progress in areas where we never thought there could be progress. That’s what makes the role of technology tremendously exciting. And we’ve also been building an infrastructure to enable companies and spinouts to be able to go and do these things.”

Richard Bickerton is a scientist and co-founder of Exscientia, a Dundee University life sciences spinout that used generative AI and automated robotics to design and develop new drug molecules, accelerating discovery by up to 70 per cent and reducing costs by about 80 per cent. The company was purchased in 2024 for around $688m by the American firm Recursion Pharmaceuticals after floating on the Nasdaq Global Select Market in 2021 at a peak market capitalisation of more than $3bn.

Exscientia maintained a presence in Dundee throughout its lifespan but moved its headquarters to Oxford in 2018 to be in the heart of the so-called ‘Golden Triangle’ of research and investment. The potential of the Golden Triangle, centred on Oxford, Cambridge and London, has been recognised by the UK Government through the Oxford-Cambridge Growth Corridor project, an effort to improve links between the hubs that is projected to contribute £78bn to the UK economy by 2035. 

“Andrew, our former CEO, relocated to Oxford for lots of reasons,” Bickerton says. “Once he relocated, he found it a lot easier to embed himself in the sort of fundraising investor ecosystems that exist down there. It’s much easier [to attract investment] in Oxford, in London and in Cambridge than it is in Dundee. But correlation isn’t causation. We don’t know the counterfactual around what would have happened had he stayed in Dundee.”

Research published by the Oxford-Cambridge Supercluster Board shows over the past 10 years employment has grown 50 per cent faster in the corridor than elsewhere in the UK, with businesses in the corridor generating over £135bn in turnover annually and life sciences a key part of the mix.

“We see huge amounts of activity in startup companies in a couple of key areas in Dundee and Tayside around life sciences, healthcare, medtech, gaming and adjacent digital technologies,” says Bickerton. “So, the startup scene is healthy and things like Techscaler are helping. But what’s missing is the ready access to the funds and the investor communities to ensure that £50m, £100m companies are forming in Dundee and then staying in Dundee and that growth opportunity stays local.”

To support the industry, the strategy includes commitments to “expand access to scale-up funding” through organisations like the Scottish National Investment Bank and “support commercialisation” through initiatives like Techscaler and the Entrepreneurial Campus Blueprint. 

“The life sciences sector is a major economic contributor, supporting 51,000 jobs across more than 700 diverse enterprises,” business minister Tom Arthur says. “The Programme for Government sets out ambitions for the Cluster Development Programme to help technology clusters grow, alongside reducing regulatory barriers and enabling stronger NHS partnerships. A £35m investment by Scottish Enterprise will provide grants up to £4m to support fit-for-purpose accommodation for life sciences firms and researchers.”

Additionally, Arthur says the recently announced Scotland-Massachusetts Bio-Bridge, an endeavour jointly funded to the tune of £98,000 by the UK and Scottish Governments, will “help firms access US investors and commercial partners” while strengthening Scotland’s position as a “world leader in life sciences innovation”.

On the international stage, policymakers in Scotland may look to the Republic of Ireland for inspiration, where life sciences exports top out at around €100–€130bn annually, making the country the third largest pharmaceutical exporter globally. Ireland hosts over 700 life science and health tech companies, including offices for the world’s top 10 biopharma companies, and is a hub for startups, boasting over 400 homegrown Irish companies. 

The sector is supported by IDA Ireland, the Irish Government’s inward investment 
promotion agency that provides investment support and incentives for companies looking to expand into Ireland.

“The IDA are tremendous advocates for the Republic of Ireland,” Cook says. “They are always on tour and they’re always in global head offices making the pitch for the Republic of Ireland and they do it incredibly well. They also have levers that we don’t have in terms of tax breaks and things.”

In Ireland, life sciences companies can claim 30 per cent of their qualifying research and development expenditure as a cash refund in addition to a base corporation tax of 12.5 per cent, rising to 15 per cent if a company has global revenues over €750m. In Scotland, corporation tax rates are not a devolved issue and therefore sit at the UK-wide rate of 25 per cent for profits over £250,000. 

Despite the disparity in the amount of tax companies must pay to do business compared to competitor nations, Cook is confident that Scotland is still an attractive bet for investors who want to capitalise on the talent and resources available.

“Scottish Enterprise and the Global Scot Network are ramping up to do the same sort of thing as Ireland to raise the awareness of what Scotland has to offer,” he says. 

“We are now raising awareness of the very distinctive nature of Scotland and trying to make the case that we can be faster, cheaper and easier. You don’t have to go to the Golden Triangle because if you come to Scotland; it’s a much less complicated process. We’re much more agile, we’ll work with you and we’ll get it done. And that message is starting to land.”

For now, Scotland’s life sciences sector can point to a growing list of strengths, from 
internationally recognised universities and pioneering research to advanced computing capabilities. 

But as advances in technology reshape the landscape and competition in Ireland and the Golden Triangle continues to grow, ensuring Scotland can capitalise on those advantages will be key. 

As Scotland pursues its ambition of becoming a £25bn sector by 2035, achieving that goal may depend not on its ability to produce innovation, but on its ability to keep and grow it.