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Scotland has built a deserved reputation as one of the UK's technology hot-spots over the last 20 years, not least because of its strong position in the energy and electronics industries.

Its next big challenge is to transfer those strengths across different sectors, creating an environment in which new applications are found for established technologies.

Dr Andy McLaughlin, project manager for regional development agency

, said: 'Scottish Enterprise recently hosted its fourth technology showcase. In past years we have had an electronics, microelectronics and opto-electronics showcase event, but this was the first featuring them all under one roof. The focus is very much on taking technology to the key priority industries in Scotland.'

He added: 'Usually you would get energy companies standing up and talking to other energy companies. Here we had energy companies standing up and talking to life scientists, nanotech folks, aerospace folks. That slant of "it might not be new to you but it's radical to us" represents the crosscutting approach we are trying to encourage across markets.'

Scottish Enterprise identified industries that are key to the country's economy, including aerospace, life sciences, energy and chemicals and textiles. It tries to partner them with any of seven key technologies — electronics and photonics; energy and environment; ICT and software; nanotechnology; materials manufacturing; product design and systems engineering; and technology for life sciences.

McLaughlin said novel applications are as important as new technologies. 'There's a lot of talk about how nanotechnology can be applied to energy or heavy engineering. But in technology terms, it is not just what's new to you; it is what's new to your next-door neighbour.

'PCP technology (pneumatic capsule pipeline technology, a method of transporting freight through pipelines) may be 50 years old, but to a company that's not been working in that area, it might be revolutionary. It is not necessarily advanced or new IP. Firms can benefit from straightforward transfer of a familiar technology.'

Scottish Enterprise runs a proof of concept (PoC) programme for novel developments, designed to commercialise research from early- stage ideas. This has resulted in several successful companies.

One was

spin-out MTEM Technologies, which carries out electronic mapping of the seabed. The university received a PoC award in 2004 and the company is now Scotland's largest ever university spin-out. MTEM was sold to Norwegian oil and gas company PGS in June.

Strathclyde University spin-out

, in Stirling, is exploring ways of exploiting quantum cascade laser technologies to carry out environmental monitoring for the oil and gas industry, using an optical technique to interrogate the environmental system.

Another business achieving success by applying optical technology is Dunfermline ophthalmic instrument manufacturer

, which is using photonics to study eyes.

But it is in energy production, Scotland's defining industry, where the application of new technology could make the most significant economic impact. According to Scottish Enterprise, Scotland's generating capacity is 12GW. Producing more energy than it needs for its own use, Scotland is a net exporter of electricity. More than 100,000 jobs (six per cent of the workforce) depend on the oil and gas industry, with over 2,000 companies in the region working in that field.

On the power production side, Scotland's major power generation companies have a combined turnover of £1.3bn and employ over 7,000 people including hydroelectric, where pioneering Scottish work in the field dates back to 1940.

Inverness-based

, formed in 1991, claims to be the longest-running commercial wave-power company and has continued the tradition of renewable power innovation in the region. It was initially formed to commercialise oscillating water column technology.

The company commissioned its LIMPET pilot plant on Isla in 2001, which is still in operation. In 2005, the company was acquired by Voigt Siemens, a top supplier of hydroelectric equipment to power projects.

David Gibb, Wavegen's chief financial officer, said: 'We're working on a breakwater demonstration project in Spain where we're supplying mechanical and electrical equipment for a corporation. It's a 16-unit item, which is small in kilowatt terms but we believe it's important as it will demonstrate a number of units can work together. It's due for commissioning this winter.'

The company is also working with NPower Renewables on a possible 4MW project in the Outer Hebrides.

Scotland's policy makers hope these strengths in traditional and emerging industries, and the chance to transfer technology between sectors, should ensure a healthy future for its engineering base.