The Scottish Government should recognise that, as well as the economic boost offered, providers north of the border understand the country’s public sector needs better than international rivals, according to Karen Meechan, chief executive of ScotlandIS.
Scotland has the talent, ambition and technical capability to set the standard for public sector technology use. Across the country, homegrown companies are rethinking how technology can support the provision of vital local services. What they’re creating has the potential to make the public sector smarter, more accessible and, crucially, more efficient. However, without stronger connections between Scotland’s public sector and its technology ecosystem, we could be missing an important trick.
Government has already shown leadership in recognising the role digital innovation can play in improving lives. From national digital strategies to targeted support for skills and startups, there is clear intent from Westminster and Holyrood to strengthen the tech sector’s contribution across the board. The next step is to ensure these efforts are embedded as early as possible, when public services are commissioned and delivered, rather than applying them after the fact when it’s impossible to realise the full potential value.
Procurement plays a crucial role here. It’s more than a back-office function – it’s a strategic tool that can shape the future of public service delivery and support the broader Scottish economy. When government organisations choose to work with local tech companies, they gain more than just a supplier. They gain access to flexible, responsive innovation that understands Scotland’s public sector needs in a way that businesses from further afield simply don’t. What’s more, investing in businesses that create jobs, retain talent and reinvest profits locally creates a virtuous circle that is the very definition of win-win.
The current challenge is that procurement practices don’t always reflect this. Scottish SMEs are often sidelined by systems that favour larger or international suppliers. For example, legacy EU legislation, such as the EU Procurement Directive 2014/2024 requires that continental firms are considered on an even footing. This not only limits opportunities for agile, high-impact Scottish businesses but also weakens the feedback loop that helps local companies grow and reinvest in future innovation.
For many, the biggest barrier is not capability, but fit – contract sizes, liability thresholds or narrow scopes that don’t accommodate the way SMEs operate. It’s an area where relatively modest reforms could have outsized impact but, currently, it represents a major frustration for many SMEs.
Encouragingly, there is growing recognition of this challenge within both government and industry. The opportunity is now to create procurement processes that are more inclusive, better informed by industry capability and more consistent across departments. When these changes happen, the benefits are shared – government receives services that are fit-for-purpose and cost-effective, while SMEs gain the platform and validation to help them scale. After all, a government contract is a good one to have on the company CV.
Importantly, this isn’t about lowering standards or ring-fencing work for Scottish firms. It’s about making sure capable, innovative businesses aren’t unintentionally excluded from the public sector marketplace. It’s also about recognising the strategic value of investing in local solutions that generate economic return – through employment, taxation and reinvestment – in a way that few overseas providers can match.
Consistency and visibility
There are already strong examples to build on. Local authorities trialling AI-powered citizen services have reported significant cost savings and improved user experience – without the decimation of jobs that many feared. Government-funded pilot projects have helped start-ups gain market traction and credibility. What’s needed now is more consistency and visibility. Too often, successful innovation remains locked in silos – unshared between departments or councils – when it could be adapted and scaled elsewhere. Historically, Scotland has rarely been the best at celebrating success and that legacy can certainly be seen here.
To bridge this gap, better communication is essential. SMEs often report missing opportunities, not due to a lack of capacity, but a lack of access or early insight. Creating more open and ongoing dialogue between public sector buyers and the tech community would allow both sides to understand what’s possible, what’s needed and how to shape tenders that deliver the best outcomes.
This long-term view is critical. Short-term funding rounds or one-off contracts can kick-start innovation, but sustained success comes from steady, predictable engagement. The more the public sector can plan and communicate its future needs – and the more that industry can prepare to meet them – the greater the chance of building services that are resilient, scalable and genuinely impactful.
There is no lack of willingness across Scotland’s public institutions to innovate. Nor is there a shortage of ideas, skills or ambition among its tech community. What’s required now is a shared framework that brings those strengths together. One where procurement is a bridge, not a barrier.
Scotland has an opportunity to create a model where public investment fuels both better services and a stronger domestic economy. When the public sector partners with local innovators, it sends a message that Scotland doesn’t just talk about innovation – it invests in it, believes in it, and benefits from it.
Karen Meechan is chief executive of ScotlandIS, a menbership body representing more than 1,000 technology firms across Scotland – 85% of which are SMEs. The organisation is hosting its flagship conference ScotSoft on 25 September at the EICC in Edinburgh.