Scotland’s place at the centre of the world of performing arts is over for another year, with the Edinburgh festivals brought to a close. Looking back on it gives us an opportunity for reflection on where the nation stands in a global context on a range of fronts.

To that end, over the summer we ran a research programme looking at what artists involved in the biggest arts festival(s) in the world were making, how they did it, and how audiences responded. Often what happens in Edinburgh during August is a signal of what may be about to follow in the mainstream – including in the business world.

In innovation, everyone talks about ecosystems. It’s a favourite word of policy and corporate strategy. The analogy of a natural ecosystem suggests that if you can make it rain, it’s good for everyone. But, that does not seem to be the case for the Edinburgh festivals.

Scotland’s role in what you might term very broadly the ‘performing arts’ seems integral in the world. People are willing to travel from as far away as Australia and Korea to be a part of it. So too people head away from the entertainment capitals of Los Angeles and New York to see if they can cut it in Scotland for these few weeks in a wet summer.

In innovation lingo, these are excellent signs for an innovation ecosystem. In fact, it almost defines what Scotland, and the wider UK, is trying to create in other industries. Scotland would love to be as central to spacetech, fintech, or traveltech as it is to the performing arts.

But there is one nagging question that has come up during the festival. Yes, it is happening here, but who is it happening to and for?

A good illustration of that point is that the company behind Mary Queen of Scots had to go to London to get programmed in its home city. That is a natural consequence of the fact that the Fringe festival is programmed by venue operators based elsewhere.

On top of that, around 90% of submission viewers for the film festivals do not live in Scotland. The ticketing app for the Fringe used to be made in Glasgow; now it’s licensed from Australia with barely a thought. There is no Scotland House like there is a House of Oz, showcasing and elevating what the country has to offer.

Scotland imagines that simply by hosting the biggest arts festivals in the world it will reap the economic rewards of what Dan Breznitz in his book Innovation in Real Places calls a stage one economy, where new-to-the-world inventions are created. Almost as if Adam Smith’s guiding hand will look after the rest.

All over the world, though, we find that unless the local ingredients are right, stage one innovation rarely leads to innovation-led prosperity. The classic example of it working is Silicon Valley, which has highly unusual ingredients in its soil that are not easily simulated.

The reality is that the Edinburgh festivals in effect make Scotland what Dan calls a stage four creative ecosystem. Work is assembled here – international shows, international promoters, international bookers. It isn’t invented here, though.

So too big movies are filmed here, rather than being from here. That’s not a problem in itself. It simply states where we are. It does mean that policy is based on a bad case of mistaken identity.

Scotland’s creative scene can be seen as a case study of what happens when we mistake innovation activity for wealth generation, or ecosystem development. From a policy perspective, we need to be very clear about what kind of innovation ecosystem we are actually looking to produce – and take active steps to produce it.

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By the way, it is hardly as if Scotland does not have the levers to shift the way its festival economy works. But we need to start asking the right questions to make that happen.

For instance, while we talk about an array of venue managers, how many of them are managing venues on behalf of the university? How is the public value of that assessed? And how does that connect with the university’s role in developing the innovation economy of the country?

For Scottish companies that want to innovate, we need to think about what role we aim to play in the different ecosystems we are a part of, and gain clarity on what we mean by that. And, while everyone wants to be an innovation ecosystem, only now do some of us realise we should have been more specific in the first place.