Scotland’s independent think tank
Scotland’s independent think tank

Why new forms of investment are needed in higher education if we are to solve the climate challenge – the case for patient capital – Richard A Williams

Why does addressing the climate change challenges feel such an unsurmountable peak for so many? As an engineer and working in higher education that has a history of driving technological and societal change, I am much more confident that with a targeted and ambitious mindset there is no reason that a net-zero outcome cannot be reached. Indeed my own wish, and a leadership driver for my own University community, is that we should be globally fossil-free within a generation.  The key here is that the solution and pathways must be global and ethical –  as the rightmindedness of any one nation will not accomplish the task.

One of the main reasons for the gap between where the hearts and minds of citizens lie, and the position of national governments, is that the political process mitigates against achieving very ambitious (‘moon-shot’) goals. Why? First, I cannot see any process, and sometimes I sense a lack of political determination, to set out a long-term plan that fixing net-zero will demand. A plan of at least twenty years is needed, with a high degree of political consensus. Secondly, there is little public favour to be gained by suggesting tough changes (if this is part of the recipe). Third, and connected to the previous point, the challenging pathway will involve initiatives, not all of which will work – and the political landscape defers to timidity rather than risk the typical mud-throwing adverse reaction to failure. Fourthly, the key features and functioning of a vibrant green economy has not been articulated or gamified. The net result of this is that no clear pathways have been offered by governments and communicated to citizens that explain how to achieve the outcomes. This is the cause of angst and will continue to be so. Of course, Scotland has sought to get ahead of the game in acknowledging the need to address its integrated approach to the outcomes aligned to the UN sustainability goals through its helpful National Performance Framework [1]. However, we need future pathways for local, national and global actions to be elucidated.

Scotland has a truly stellar history of scholarship, invention and impact. Remember that innovation (a word that is loosely bandied around) is about the successful application of an idea (invention) to the benefit of society. Having the idea is comparatively easy, drawing it out to benefit society is the big win. The answers do not just lie in technology: they lie predominantly in the human factors of society. Here again Scotland has been a primary place of enlightenment in the eighteenth century. The world’s father of economics, Adam Smith, would have argued that the heart of change would arise by keeping enlightened self-interest at the forefront of our minds. The magnum opus of The Wealth of Nations is so well known, but let me shine a light on his other rather splendid book, The Theory of Moral Sentiments [2]. Apart from being a more concise read, it speaks of acting as if someone was observing all your actions and, of course, it speaks at length on the importance of a generic societal happiness. What excellent points. Last year, the  research centre located in the renovated home of Adam Smith just off the Royal Mile in Edinburgh, Panmure House, developed ten clear priorities and actions for the mitigation climate effects [3] that presents a whole society view. Ambition and intent was a key priority, as were reforms in finance and the economy.

So let me focus on the possible role of universities, which have for centuries been lighthouses for the future. Universities are curators, convenors and creators through their ideas and inventions that have led to innovation. Scotland is blessed with one of the best possible assets, its universities, for its future, the ability to research and shape the future, and the ability to develop people with the talent to make the future happen. But change is needed in the innovation process. I must admit to feeling slightly aggravated by reference to ‘why are we not like Silicon Valley’ – where someone has an idea and then hey-presto in four years everybody has made a great deal of money and a new business has been developed and sold on. Is this a trick we are missing? Of course, our economy does need ‘high growth new companies’ but we want them to stick in Scotland. There are other important interventions in play too, such as the emerging programme for the so-called Tech Scalers. But to solve issues around climate challenge, we need a whole different additional investment structure, once based on long-term investment. Let me explain.

As a person involved with radical innovation, it’s clear that in most cases the business models and markets for radical technologies, processes, and new ways of doing things often do not exist. Indeed, my definition of radical ‘invention’ (note my choice of word here) is that it may be simple, unbelievable, and difficult to gain adoption.  Community adoption can be slow even if consumer surveys show they might wish to adopt. This means that conventional economic drivers cannot be used to assess the fiscal business proposition. An example I worked on in the past was the implementation of a radical way of washing without (or using extraordinarily little) water and no need for washing powder. The technology was first-rate and the environmental benefits (energy consumption, water usage, wastewater clean-up, avoidance of drying) were stupendous. However, the ability for such a disruptive product to enter the market and displace existing washing machines, detergent suppliers etc was viewed as unbackable. Furthermore, consumers, whilst liking the green credentials, could not bring their wallets round to purchasing the machines in their homes due to the human factor. They thought that waterless washing could not work in their home, despite readily taking clothes to the environmentally damaging organic chemical  ‘dry cleaning‘ counter-services. Ten years later, the technology is well adopted in the hotel sector in California where supply chain issues have been remapped, driven by the obvious benefits [4]. The process of radical invention to innovation takes time.

All this took patience, and hence the missing link is Patient Capital – propositions where the value of the investment is not based on fast return but on longer term financial and societal returns. If we are to address the climate challenge in our universities, we need access to investors and research funders who value societal impact above short term gain. This is a quite different arena for several reasons. It requires the executors of the research to be committed to the whole innovation cycles of invention and deployment, of which the latter is challenging and requires evidence of appropriate partners. The innovation team needs to have a broad-base so that it has the capacity and resilience to be enduring in its purpose.  It carries risk since a good proportion of the ‘great ideas’ may fail anywhere along the innovation pathway – and, for the reasons I mentioned above, failure polarises communities. We must get over this. The whole innovation team must have an utterly clear conviction and purpose to achieve the outcome. Such endeavours are suited to a so-called ‘challenge’ approach to research – in which an end-to-end team emerges to address a specific challenge.

There is a growing interest in long-term capital and organisations have been developed to foster, promote, audit and demonstrate its value to savers and communities [5].  Critically, the long-term investment chain is supported by institutions (pension funds, sovereign wealth funds, insurers, and asset managers) who share a common objective in long-term security. There is a specific focus on climate challenges and approaches, such as in this toolkit [6].  In such funds, the measure of success should be best expressed in terms of the yield of tCO2 reductions achieved per £ of research investment placedHumungous global financial losses that are predicted if climate mitigants are not delivered, which provides a chilling backdrop to calibrate  against and justify the scale of innovation investment that may be required.

It is through such pathways that Scotland should draw on the undisputable track record of innovation in its institutions of Higher Education, to lead the way in deployment of long-term capital to solve some of the most wicked problems that we face in transition. Focussing capital on long-term gain needs to be an increasingly visible part of a better-connected whole-systems  Scottish approach that starts with developing entrepreneurial mindsets equipped with confidence and ambition to solve critical issues.

Richard A Williams OBE FREng FRSE FTSE is Principal & Vice Chancellor of Heriot-Watt University and a driver of radical innovation in areas of natural resources and energy storage. He is a recipient of the President’s Medal of The Royal Academy of Engineering and on the board of The Entrepreneurial Scotland Foundation and British Geological Survey.




  1. The National Performance Framework,
  2. “The Theory of Moral Sentiments” Adam Smith, e.g. Penguin Classics, Anniversary Edn. (2010), ISBN-13 978-0143105923
  3. Panmure House, Hutton Series Report, 2021
  5. FCLT Global (‘Focussing Capital on the Long Term”), see