THE scale of the failure of Scottish Enterprise's initiative to create billion-pound companies from Scottish research can be exposed for the first time: The £231 million investment over 10 years has returned barely £600,000.

When the Intermediary Technology Institutes (ITIs) were launched by then Scottish Enterprise (SE) chief executive Robert Crawford in December 2002, he said that if they succeeded they would be "one of the most important things- that Scotland has ever done".

The then First Minister Jack McConnell also hailed the initiative, saying: "Scotland's technology institutes will have a crucial role in making the giant leap to more world-beating companies and high-quality jobs."

But according to data passed to the Sunday Herald released under freedom of information laws, none of the technologies backed under the initiative have produced any significant return to date.

The ITIs have produced just 94 granted patents over 22 research and development programmes, and have five currently trading companies. SE refused last week to release any forecasts for their future performance, citing commercial confidentiality and the complexity of predicting how they would perform.

Inspired by the Fraunhofer institutes in Germany, the ITIs were supposed to receive £450m in funding in 10 years. It was originally intended that this would expire at the end of this month.

Focused on life sciences, energy and digital media at offices in Dundee, Aberdeen and Glasgow, the ITIs hired executives from blue-chip firms to commission research into technology gaps. The aim was to create intellectual property that would be licensed to ambitious start-up companies.

Within two years, numerous senior managers left amid complaints that SE was cutting back on funding promises. They went through a major restructuring in 2007, then were brought in-house in 2009 by then SE chief executive Jack Perry – at odds with the fact that they had been set up as separate institutes so they could operate like private companies.

In 2010, the decision was taken to stop investing in new projects and scale back the roster of prospective technologies that would receive backing. Having spent £216m to that point, SE confirmed last week that £15m has been spent since.

Mary Scanlon, Scottish Tory enterprise spokeswoman, said: "That £231m could have gone towards a tremendous amount of schools, colleges and hospitals. The royalties are a paltry return."

Last week SE sources mainly blamed the recession for the ITIs' failure, and added that it was necessary to consider benefits such as the learning within the companies that had been set up, which could lead to major successes in future.

Paul Lewis, managing director at SE, who has responsibility for the commercialisation programme, said performance had significantly improved in recent years, and added: "The return on our investment [in terms of wider economic impact] is now expected to exceed £8 for every £1 into new companies for the 10-year period up to 2017."