Scots tech bounces back, but talent shortage bites

ScotlandIS CEO Karen Meechan

Scottish tech businesses bounced back in 2021, with 72% of companies reporting increased sales, according to new research from ScotlandIS.

This marks a return to pre-pandemic levels of sales growth reported in 2019, after a significant drop of 44% last year.

In its annual Scottish Technology Industry Survey, ScotlandIS reports that tech businesses are expecting to reap rewards from growth in data analytics, artificial intelligence, and the Internet of Things, but the largest increase in potential growth opportunities has been seen in cyber security.

About 31% of Scotland’s tech businesses are now seeing it as an opportunity in the year to come.

However, ScotlandIS said: “Whilst the sector is on a positive trajectory, exports are in decline.

“Last year saw a four per cent reduction in exports to 56%, and one in five Scottish tech businesses have no plans to export this year.

“Of those planning to export, key markets are Europe (68%), Rest of the UK (77%) and North America (60%).

“The survey also found that talent continues to stay in high demand across the industry and with wider impacts of a skills shortage across most sectors, this issue is becoming increasingly challenging for the industry to manage.

“Efforts to support businesses on the talent shortage will continue to be a priority this year as it remains one of the top barriers – alongside pandemic recovery – to achieving ambitions in the year ahead.”

ScotlandIS is the membership and cluster management organisation for Scotland’s digital technologies industry.

ScotlandIS members employ about 60,000 people and contribute about £4.7 billion to Scotland’s GVA.

ScotlandIS CEO Karen Meechan said: “Data gathered from this year’s survey gives clear signals that the tech sector is back in growth mode after weathering initial impacts of the pandemic.

“As it comes to the end of the academic year for many Scottish students, we are pleased to see how many organisations across the sector are planning to recruit graduates, but the year ahead will require continued collaboration across industry, academia, and our education system to build a pipeline of talent within Scotland.

“We’ll continue to do as much as we can to support that.”

Economy Secretary Kate Forbes said: “It is encouraging to see more technology businesses in Scotland reporting increased sales, in line with the return to pre-pandemic retail sales levels more generally.

“We want to establish Scotland as one of Europe’s leading start-up economies – that is why the Scottish Government is committed to the most radical reforms of the Scottish entrepreneurial system since devolution.

“A key ambition in our strategy to transform the economy is to establish Scotland as a world-class entrepreneurial country, founded on a culture that encourages, promotes and celebrates entrepreneurial activity.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.