When Kenny Kemp picked his ‘10 Scottish tech firms to watch in 2015’ at the beginning of last year, he spoke of the ‘unbelievable buzz’ around Scotland’s burgeoning technology sector. A year on, the industry has experienced strong growth and confidence is running high...
Here at BQ we were inundated with success stories from Scotland's tech sector last year. A prime example of this was Skyscanner, who back in January was named the nation's first unicorn business.
This was swiftly followed by the success of fantasy sports outfit FanDuel, which became the nation's second unicorn worth more than US$1bn. Now, business confidence is peaking and the future looks bright for the sector.
The latest research by the trade body for Scotland's ICT industry, ScotlandIS, shows that 68% of businesses in the sector saw sales rise in 2015, with over 25% reporting an increase in turnover of 20% or more.
The Scottish Technology Industry Survey 2016 also highlighted the rising demand for Scottish products and services from overseas – a trend which was echoed at last week’s Scottish Export Awards with Think Analytics taking the crown.
The report showed the proportion of companies selling their products or services overseas continued to increase from 57% the previous year, with over 60% reporting some international sales in 2015.
Going forward, the survey also showed 81% of businesses expect sales to increase over the next year and 70% are optimistic or very optimistic about the year ahead, with the industry on course to continue growing at a rapid pace.
Polly Purvis, CEO of ScotlandIS, said: “Our industry has experienced exceptional growth in recent years and 84,000 people are now employed in digital technologies roles across Scotland.
“It’s really positive to see that so many of our members are expecting sales growth in 2016 and the increase in the number of companies doing business overseas is particularly encouraging.”
Computing students will be pleased to hear that graduates will once again be in high demand, with 74% of businesses expecting to hire people who have recently completed their studies.
Overall, the recruitment market should remain strong, with two thirds of businesses planning to increase employee numbers in 2016.
Software and web development are the most sought after skill sets, followed by business skills such as project management, sales and marketing.
Commenting on the recruitment findings, Purvis said: “2015 was an exceptional year in terms of demand for new staff and demand continues to outstrip supply.
“Most of our members report difficulties in finding the staff they need, so we must continue efforts to develop a strong and sustainable talent pipeline.”
She added: “Scotland has the potential to create 70,000 new digital technologies jobs over the next five years but investment in connectivity, skills, research and to provide growth capital will be needed to ensure we can take advantage of global and domestic opportunities.”
Medium sized businesses achieved the best performance in 2015, with 82% reporting increased sales. 47% of companies also reported improved profit margins.
The proportion of medium sized companies exporting grew from 49% to 70% and nine out of ten businesses expect sales to increase in 2016.
Scotland’s digital technologies industry generates more than £5bn in GVA and, according to KPMG’s Tech Monitor, the number of tech sector enterprises in Scotland grew 43.3% between 2010 and 2015, second only to London (54.6%).
BQ recently caught up with Polly Purvis as part of our Meet the MD campaign.