Insurance · 20 March 2018

Scotland’s thriving tech startups plot expansion and exports growth

Small firms in Glasgow are predicted to contribute £6bn to the economy every year by 2025

Entrepreneurs leading Scotland’s growing community of tech startups have declared plans to hire more staff and ramp up exports as their sales boom.

According to the 13th annual Scottish Technology Industry Survey, 80 per cent of companies are expecting a positive 2018 with nearly a third forecasting more than 50 per cent increase in sales.

Over three quarters of those surveyed also expect to increase employee numbers in the next 12 months, up from 66 per cent in 2016.

In terms of new staff, the local marketplace is anticipated to provide the bulk of talent with 70 per cent of tech firms expecting to recruit from within Scotland. A fifth are planning to find new recruits mainly outside the UK, up from nine per cent last year.

Three quarters of business owners said they were “definitely” or “quite likely” to recruit graduates. Demand for Modern Apprentices has risen with 45 per cent “definitely” or “quite likely” to recruit in this way, compared to 38 per cent in 2017 and 29 per cent in 2016.

The survey, conducted by ScotlandIS, the trade body for the digital technologies industry, also revealed that 68 per cent of businesses recorded improved sales during 2017 compared to the previous year. Increased profit margins were reported by 47 per cent of respondents for 2017, only one per cent less than 2016.

International markets remain a key focus for Scotland’s digital companies with 64 per cent of businesses already exporting and a further 17 per cent planning to do so.

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As in previous years, the top three export markets remain the Rest of the UK, Europe and North America. Europe has, however, replaced the Rest of the UK as the top destination for exporters.

“The survey provides an important snapshot from those at the coal face in the industry. It shows that Scotland’s digital technology industry is thriving with many of our businesses enjoying success at home as well as experiencing increasing overseas demand,” said Polly Purvis, chief executive of ScotlandIS.

“The overwhelming majority of respondents are optimistic about the year ahead and are forecasting business growth. This is good news not just for our industry but the country as a whole as more jobs are created and investment increases across the sector.”

Firms also revealed their key challenges which were staff recruitment and retention, developing new business, the introduction of GDPR and the current political situation.

This year, for the first time, ScotlandIS also polled firms on steps they were taking to tackle the gender gap. More than half had found that offering flexible work patterns had helped in recruiting female staff.

The vast majority of employers had either tried or were considering this and other initiatives such as providing more female role models when engaging with schools and universities, return to work training, and supporting groups like Girl Geeks and Scottish Women in Technology.

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