ScotlandIS survey

Tech firms optimistic, though tax hikes ‘unhelpful’

Karen Meechan
Karen Meechan: ‘It’s vital we don’t take the sector’s strength for granted’

An expectation of higher sales is behind a rise in optimism among Scotland’s technology businesses, though they are concerned that higher taxes are making it more difficult to attract talent.

A survey by ScotlandIS, the digital industries membership organisation, found that despite a complex and challenging economic environment, 78% of respondents expressed optimism for 2024, up from 72% last year.

Of those surveyed, 90% expected to see an increase in sales, with the remaining 10% expecting sales to remain the same. Almost a third (29%) predicted a rise by more than a fifth.

This optimism is fuelling an appetite for expansion as 70% of businesses surveyed said they were expecting to increase their headcount in the next 12 months. Only 2% had any plans to cut jobs.

Amid an ongoing skills shortage, 62% said they will turn to recent graduates to fill at least some of this expansion, with some concern that recent tax hikes were seen as “unhelpful” in attracting skilled people.

ScotlandIS CEO, Karen Meechan, said: “During one of the toughest economic periods in a generation, these figures show how robust our industry really is.

“However, it remains vital that we don’t take this for granted.

“Many of our members have faced extremely difficult times in recent years. COVID, Brexit and a sustained period of economic stagnation have all contributed to a challenging landscape.

“The chronic shortage of skilled tech workers, in particular, has proved problematic for many. What’s more, recent changes to the income tax bands north of the border have certainly not helped our competitiveness when it comes to attracting top talent.”

The survey is published after Daily Business revealed that the X3 Summit, a global technology conference scheduled for Edinburgh at the end of May, has been postponed.

No explanation has been given, but there has been a general slowing of investment and deals as investors delay decisions and await the cost of debt to fall. The annual EIE investment event was cancelled last year but will resume this year.

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