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Scottish tech businesses are planning a major employment drive as increased exports push sales, according to new research from ScotlandIS. 

The trade body has released its annual Scottish Technology Industry Survey, which reveals a steadying financial position and increasingly international outlook from Scotland’s tech businesses.  

In the coming year, 83% of companies surveyed expect to increase their headcounts – a 7% increase on last year (76%). None anticipated cutting jobs, while two in three (63%) of the new jobs created are expected to be sourced in Scotland. 

The technology sector already employs over 80,000 people in Scotland, and 15,600 new digital technology jobs are created annually. Overall, UK tech job vacancies increased by 30% last year compared to 2021, reaching 77,000 in February.  

One of the factors driving the jobs boost is demand for services internationally. The ScotlandIS survey found that the number of tech companies planning to or already exporting is at its highest level (87%) since the Covid-19 pandemic. This reverses a decline in exports from last year. North America and Europe remain the top two export markets for Scotland’s tech businesses outside of the rest of the UK. 

Karen Meechan, CEO of ScotlandIS, said: “The skills shortage has long been a challenge for the Scottish tech sector, but it is now mission critical. If we cannot fill vacancies and source talented people, the potential for growth will be stymied. The Scottish economy can ill afford to let growth and opportunity slip through its hands, when so many other sectors are struggling.” 

The expected increase in headcount is a positive contrast to the broader job cuts faced by the tech industry in 2023 so far from global giants such as Meta, Google and Spotify. Talking back in February, Meechan addressed these layoffs, saying these are “always devastating” but that they are also “a rare opportunity for growing Scottish companies that are struggling to find skilled candidates as they release an experienced pool of talent back into the industry.” 

According to ScotlandIS, the number of tech companies in Scotland having consolidated their growth has risen sharply. The proportion of businesses recording turnover over £1 million has increased from 22% in 2022 to 37% in 2023.  The overall number of tech businesses expecting sales to remain flat or grow is broadly unchanged compared to last year (94% in 2023 vs 95% in 2022) and an improving picture compared to 2021 (88%).   

Rapid sales growth (defined as 21% or higher) is expected to decline as business models consolidate after a rush in post-pandemic demand. For example, in 2022 39% of tech companies expected rapid sales growth, while this year that figure has reduced to 19%. By contrast, the volume of companies expecting up to 20% sales growth has increased this year from 44% in 2022 to 57% in 2023. 

Karen Meechan added: “A very positive outcome from this year’s survey is the way in which our tech sector has stabilised. Huge change was needed to cope with the ebbs and flows of the pandemic era, and that has now settled into more predictable and sustainable growth. Not only are more companies recording seven-figure turnovers, but more and more are also seeking to export their services outside of Scotland. The tech sector needs to export to grow so this is an encouraging sign for the future.” 

Scotland’s tech companies report seeing the greatest opportunities for their business over the next 12 months in cyber security (46%), followed by data analytics (45%), and artificial intelligence (43%). While the top three opportunity areas have remained the same, their weighting has changed – cyber security has risen by over 15% compared to last year, while artificial intelligence has increased marginally (1%) and data analytics has decreased marginally (1%) compared to last year.  

ScotlandIS’ annual Scottish Technology Industry Survey provides an in-depth insight into statistics from the past year.  Its key trends can be tracked as well as projections for the future.  A link to review the full report can be found here

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