Oil and gas scoops Aberdeen title of innovation hotspot

● Pioneering oil and gas businesses help to keep Granite City top of the R&D table

Aberdeen has grabbed pole position as Scotland’s innovation hotspot, with the resurgent oil and gas sector spearheading research and development (R&D), new research suggests.

Thegranitecityhasretained top spot in R&D tax claim firm Jumpstart’s innovation league table, boasting the highest proportion of R&D tax relief claimants of any local authority area in Scotland. A total of 250 Aberdeen companies, or 2.6 per cent of all enterprises in the city, claimed for R&D tax relief in the 2016-17 financial year, according to figures released yesterday by HMRC.

The results underline the “relatively high level of innovation” within the oil and gas sector which dominates the Aberdeen economy, according to the Edinburgh-based tax specialist.

Edinburgh was second in the table, with 2.1 per cent of its businesses making R&drelated tax relief claims.

The report cites the capital’s strong IT and financial services sectors as driving forces for its continued strong placement. Glasgow (1.7 per cent of businesses) and Dundee (1.6 per cent) were third and fourth, respectively.

HMRC statistics show that Scottish companies secured more than £1.4 billion in R&D tax relief credits in 2016-17.

The bottom end of the Scottish table includes East Dunbartonshire, Dumfries and Galloway, Moray, and North Ayrshire, with 0.3 per cent or fewer businesses in those areas securing a claim.

Across the UK, Aberdeen placed fourth against other unitary authority areas, with Northern Irish regions dominating the top spots.

Mid-ulster (3.5 per cent) and Belfast (2.92 per cent) scooped first and second spot, respectively, while Cambridgeshire placed third with 2.9 per cent of its businesses securing an R&D tax relief claim.

Scott Henderson, managing director at Jumpstart, said: “[The table] shows Aberdeen businesses once again leading the way in making successful R&D tax relief claims.

“The city’s oil and gas sector continues to invest in innovation to improve operational processes and enhance [global] competitiveness.

“Other key Scottish industry sectors including IT, financial services and biotechnology account for the higher proportion of R&D tax credit claims for Edinburgh, Glasgow and Dundee in this year’s table.

“It is not surprising to see many rural areas in Scotland ranking further down the list.

“While many of the industries in these areas, including agribusinesses, are benefitting from innovation and technology, this is often being developed externally by supplier companies.”