Strong growth for digital technologies industry

Polly Purvis, chief executive of ScotlandIS

Scotland’s digital technologies industry enjoyed strong growth in 2015 and confidence remains high for the year ahead, according to new research by trade body ScotlandIS.

But the success of the industry means some businesses are having difficulty finding qualified staff.

The Scottish Technology Industry Survey 2016 reveals that 68% of businesses achieved sales growth in 2015, with more than a quarter reporting an increase in turnover of 20% or more.

The annual survey also found that the proportion of companies selling their products or services overseas continued to increase from 57% the previous year, with more than 60% reporting some international sales in 2015.

About 81% of businesses said they expect sales to increase over the next 12 months and 70% are “optimistic or very optimistic” about the coming year, with the industry on course to continue its rapid growth.

“Our industry has experienced exceptional growth in recent years and 84,000 people are now employed in digital technologies roles across Scotland,” said Polly Purvis, chief executive of ScotlandIS.

“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.”

About 74% of businesses said they expect to hire graduates.

About two thirds of businesses said they plan to hire more people in 2016.

Software and web development are the most sought after skill sets, followed by business skills such as project management, sales and marketing.

“2015 was an exceptional year in terms of demand for new staff and demand continues to outstrip supply,” said Purvis.

“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.”

Purvis continued: “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.

About 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 £5 billion in gross value added (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 with 54.6%.