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New research from ScotlandIS has revealed that Scottish tech businesses bounced back in 2021, with 72% of companies reporting increased sales. This marks a return to pre-pandemic levels of sales growth reported in 2019, after a significant drop last year (44%). 

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

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.

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.

Karen Meechan, CEO of ScotlandIS

Phil Ford, Head of Digital Technologies and Financial Services at Skills Development Scotland (SDS) said:

“This year’s Scottish Technology Industry Survey shows some welcome optimism but underlines the fact that skills shortages could be a barrier to growth and recovery.

“That’s why we’re working with a range of partners including ScotlandIS to expand the skills pipeline, from further embedding apprenticeships and work-based learning to offering new options for upskilling and reskilling and increasing engagement between employers and schools.

“Later this year, a new Digital Economy Skills Action Plan will be published providing a framework for how this activity can help drive continued growth in our economy.”

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.

Economy Secretary, Kate Forbes

The annual Scottish Technology Industry Survey provides in-depth insight into the sector, tracking key trends and providing projections for the future.  A link to read the full report can be found here.  

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