The vast majority of technology businesses in Scotland are optimistic about their prospects in the current year despite the complex and challenging economic environment in which they are operating.
The latest annual report published today by industry body ScotlandIS reflects a sector that is generally in rude health, with an increase in trading and employment expectations. Amid continuing skills shortages, many are planning to hire recent graduates to meet their expansion plans.
“Time and again, the tech sector in Scotland has provided a source of great economic optimism," ScotlandIS chief executive Karen Meechan said.
"The responses to this year’s survey are further proof of this. During one of the toughest economic periods in a generation, these figures show how robust our industry really is."
Of those questioned in the latest industry survey, 78% expressed optimism for the current year, up from 72% in 2023. When asked about the outlook for sales, 90% said they anticipate an increase in revenues with the remaining 10% expecting a level result with 2023, rather than a decrease.
Furthermore, 29% predicted that sales will rise by more than a fifth.
This is fuelling an appetite for expansion with 70% of respondents saying they expect to increase their headcount in the coming 12 months. Only 2% had any plans to cut jobs.
With long-running skills shortages throughout the sector further exacerbated in recent years by Brexit, firms are turning to recent graduates to fill at least some of this expansion with 62% planning to hire newly-qualified staff.
The digital technologies industry in Scotland employs more than 70,000 people across a range of skills and professional services from niche specialised firms to global players. Approximately 13,000 job opportunities are created every year, and ScotlandIS says filling all of these would add £1 billion to the country's economy.
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“With sales and job opportunities both expected to rise, the positive impact Scottish tech has on the national economy is only set to increase," Ms Meechan said.
"However, it remains vital that we don’t take this for granted. Like any ecosystem, Scottish tech needs supported and cultivated in order for growth to continue."
With 3,900 digital technologies companies, the Scottish tech sector is expanding 1.5 times faster than overall economy. ScotlandIS works with the Scottish Government, Highlands and Islands Enterprise, Scottish Enterprise and Skills Development Scotland to support the industry.
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“While we’re clearly cognisant of broader economic challenges, as well as the tough choices facing government, many of our members have faced extremely difficult times in recent years," Ms Meechan added. "Covid, Brexit and a sustained period of economic stagnation have all contributed to a challenging landscape.
"The chronic shortage of skilled tech workers, in particular, has proved problematic for many. What’s more, recent changes to the income tax bands north of the Border have certainly not helped our competitiveness when it comes to attracting top talent.
"I only hope the positive responses to this year’s survey will reiterate the potential that exists within Scottish tech and remind policy makers how much the industry can contribute to Scotland’s economic prosperity.”
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