Firms cope with staffing issue

Tech sector poised for 17% growth over five years

Polly Purvis

Polly Purvis: ‘2018 was a very strong year’


Scotland’s digital technologies sector is forecast to grow by about 17% in the next five years despite ongoing pressures over recruitment, according to the latest research.

More tech firms enjoyed increased sales – up from 68% in 2017 to 75% last year, while earnings rose from 47% to 51%.

The Scottish Technology Industry Survey 2019, published by trade body ScotlandIS, gathered responses from 160 businesses, and pointed to further growth this year, with 81% planning to hire and 83% predicting that revenues will rise in the next 12 months.

The report is published during the government-backed Can Do entrepreneurial festival with a record programme of 31 events across the country featuring a cluster of signature events during April and May.

Many of these focus on the tech sector, with the key EIE investor pitching event taking place at the McEwan Hall in Edinburgh today.

ScotlandIS says digital industries now support around 63,000 Scottish jobs and generate an estimated £6 billion in gross value added to the economy.

About £3.3bn of this comes from annual export earnings, with 53% of respondents already selling internationally, while a further 19% are planning to do so.

ScotlandIS hailed digital technologies as the nation’s fastest growing sector and forecast it will expand by 17%  by the middle of the next decade.

Polly Purvis, chief executive, said: “The digital technologies industry is a major contributor to the Scottish economy, so it’s great to see the vast majority of Scottish tech businesses are expecting a successful year, anticipating growth in sales and new job creation.

“2018 was a very strong year, and despite ongoing uncertainty, this year’s survey highlights the strength and resilience of the industry within Scotland.”

However, tech companies have identified a number of challenges which contributed to a slightly less favourable outlook for 2019, with the number of firms expressing optimism dropping by 8% to 72%.

The sector anticipates key issues for 2019 will be staff recruitment and retention (52%) and political uncertainty (41%), followed by sales and winning new business (30%).

Demand for university graduates remained steady, with seven in ten respondents likely to recruit graduates this year.

Ms Purvis added: “The technology landscape is constantly evolving and provides huge opportunities in areas as diverse as data, cyber, AI [artificial intelligence], robotics, fintech, healthtech and agritech.

“As increasing use of technology products and solutions permeates all parts of the economy, underpinning increased productivity and enabling innovation, there has never been a better time to be in tech.”

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