Regional spotlight: Why the future is bright for tech in Scotland – UKTN (UK Technology News

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Scotland is well known for its exports of textiles, whisky, salmon, and shortbread. But it’s Scotland’s know-how trade that’s driving the following wave of financial development, with some seeing it as having the potential to turn into the UK’s Silicon Valley.
Scotland spans almost 78,000 sq. kilometres, together with the mountainous and loch-filled area within the northwest and the built-up areas nearer to the English border.
Whereas it has eight cities, its tech exercise is closely concentrated in three: Edinburgh, Glasgow and Aberdeen.
There are greater than 850 high-growth tech companies in Scotland, in accordance with analysis agency Beahurst, with 38% of these headquartered in Edinburgh. Mixed, these startups raised £454m in 2021, and £312m within the first half of 2022.
Entrepreneurs within the area are optimistic about its potential. In response to the annual Scottish Startup Survey, 93% of companies based mostly in Scotland stated it’s a good place to launch a startup.
“Scotland has gone from energy to energy as a tech hub. Its future development appears robust and it’s solely a matter of time earlier than it produces its subsequent tech titan,” says Steve Harris, UK head of know-how sector, SME & mid company on the Financial institution of Scotland.
However what makes Scotland a fast-growing tech area, and the way did it get to the place it’s at this time?
Over the centuries Scotland’s economic system has developed from an industrial powerhouse within the 1800s to 1 centred round heavy trade and shipbuilding.
From the Forties, electronics corporations flocked to Scotland. Within the following a long time, semiconductors turn into a vital a part of Scotland’s tech trade, incomes the triangle between Dundee, Inverclyde and Edinburgh the moniker Silicon Glen.
This attracted a wave of abroad tech giants, together with IBM and Honeywell, to determine a presence in Scotland.
Nonetheless, the tech crash in the course of the late Nineteen Nineties to 2000 despatched ripples throughout the Atlantic that hit Scotland’s high-tech trade, leading to mass layoffs at electronics corporations and shuttered factories.
During the last decade, there was a resurgence of Scotland’s tech trade and a diversification away from electronics manufacturing.
There may be now a give attention to fostering native innovation – though Scotland continues to draw abroad tech corporations. US tech big Amazon, for instance, established a software program improvement centre in Edinburgh again in 2004 and has persistently expanded it within the years since.
Scotland’s diversification away from {hardware} manufacturing has paved manner for a booming software program trade. The nation is especially robust in AI, cybersecurity and fintech.
In response to FinTech Scotland, there was a 27% enhance within the variety of fintech corporations based mostly within the nation in 2021.
In the meantime, Dundee-founded Rockstar North, the developer studio behind the Grand Theft Auto collection, has put Scotland’s gaming trade on the map.
In comparison with different elements of the UK, Scotland’s tech trade is nascent, with half of the businesses on the seed stage.
Funding throughout the UK slowed down within the second half of the 12 months, however loads of tech startups in Scotland continued to select up funding, together with life science firm Cytomos, well being tech firm PhysioMedics and pension platform Guiide.
The unicorn could also be Scotland’s nationwide animal, but it surely has produced simply three corporations which have reached the much-vaunted metric of a $1bn non-public valuation.
One among these is BrewDog, which as a craft beer brewer doesn’t fall beneath the remit of tech firm. The second is FanDuel, an Edinburgh-founded playing firm most just lately valued at $20bn.
Edinburgh-based Skyscanner is subsequently Scotland’s solely true tech unicorn. Based in 2001, the journey search company was acquired for £1.4bn in 2016.
Whereas Scotland has fewer unicorn corporations in comparison with different areas within the UK – specifically London – there are 4 Scottish corporations recognized as ‘futurecorns’, high-growth corporations anticipated to hit the $1bn milestone within the close to future.
Three of those – Amphista Therapeutics, NuCana BioMed and Roslin – are biotechnology corporations, whereas Interactive Investor demonstrates Scotland’s fintech energy.
These corporations, and the various different scaleups present process intervals of speedy development, present that Scotland’s tech trade is one with excessive potential. Some, together with Elevating Companions founder Helena Murphy, consider that Scotland – and Glasgow specifically, can emulate the success of Silicon Valley within the US.
Scotland’s devolved parliament has put tech on the forefront of development plans. In July 2020, the Scottish authorities commissioned a report, led by former Skyscanner chief working officer Mark Logan, to assessment its know-how ecosystem and make suggestions to enhance it.
Since then, the devolved authorities has invested £60m into the ecosystem. Logan’s appointment as Scotland’s first chief entrepreneur has gained reward from the tech trade.
“With a give attention to guaranteeing that entrepreneurship is instilled within the training and abilities methods and supporting each D&I in enterprise scaling and the Begin-Up Nation Programme, Mark is the general public face of a nationwide endeavour to radically remodel the Scottish economic system,” says Garry Bernstein, group lead at Tech Scotland Advocates.
In July 2022, the Scottish authorities awarded a contract value as much as £42m to Edinburgh-based Codebase to arrange seven new tech scaler hubs throughout Scotland. Bernstein says that that is “driving improved entry to world-class infrastructure, studying and funding”.
He provides: “The addition of the Scottish Nationwide Funding Financial institution to a complicated and various funding panorama will complement the extraordinary success the nation’s Enterprise Companies have had as fairness/debt co-investors in Scotland’s tech scene.”
Supporting Scotland’s tech development is a community of incubators, accelerators, angel investor networks and specialist hubs. Tech incubator Codebase has supported over 500 startups, which have gone on to lift greater than $4.8bn mixed. Since 2014 it has grown its presence from Edinburgh to incorporate Stirling and Aberdeen.
In the meantime, investments made by enterprise angel syndicate Archangels have generated an estimated £1.4bn for the Scottish economic system within the tech and life science fields.
Pre-seed accelerator Seed Haus and privately financed incubator Techube are additionally based mostly in Edinburgh, as are biotech and life science hubs BioQuarter and the Roslin Innovation Centre.
In Glasgow, co-working and innovation areas Tontine and RookieOven present focal factors for entrepreneurs to fulfill.
“The important thing components underpinning the expansion of Scotland as a tech hub is the entry to good expertise and the flexibility to entry help from our bodies similar to Scottish Enterprise,” says Reza Najafian, director at Staffscanner, a platform for momentary healthcare employees. “Staffscanner has been lucky to draw and retain good expertise throughout the UK. The entry to the RBS Entrepreneur Accelerator was additionally extraordinarily helpful as we had been round different startups which made the entire journey much less isolating.”
There may be robust collaboration between academia and trade in Scotland, with the College of Edinburgh amongst these working accelerator initiatives.
By no means earlier than has a rocket launched from British soil into house. That appears set to alter in 2023 – and Scotland is ready to be on the coronary heart of the UK’s plans.
There are presently 5 spaceports in various phases of improvement throughout Scotland. The nation’s geographical place provides it entry to each polar and sun-synchronous orbits with out flying over land inhabited by people, making it the “greatest place within the UK” for vertical rocket launches.
These advantageous components have attracted 173 house corporations to Scotland, an ecosystem that employs one in 5 of all of the UK’s house sector jobs.
These vary from rocket producers to satellite tv for pc makers and information analysers, with regional specialisms rising. Glasgow, for instance, builds extra satellites than every other place in Europe.
Edinburgh-based Skyrora and Forres-based Orbex are each constructing rockets to launch small satellites into orbit, and have raised hundreds of thousands in enterprise funding to take action.
Two spaceports – in Sutherland and on the Shetland Islands – are on monitor to launch satellites onboard every firm’s rockets into house subsequent 12 months.
Scotland’s tech trade is taking pictures for the celebrities, however its startups face most of the identical challenges felt throughout the remainder of the UK. These embrace entry to funding and expertise.
A extra particular problem for Scotland is attracting the later-stage capital required to scale startups up from the early to later phases. Attracting this monetary help amid a worsening macroeconomic outlook will make this tougher as traders tighten their belts.
This 12 months’s Scottish Startup Survey discovered that 69% of respondents have discovered it troublesome to rent expertise over the past 12 months, with engineer and developer roles significantly difficult to fill.
“The primary challenges are additionally round employees and the flexibility to draw the numbers required for continued development,” says Staffscanner’s Najafian. “Making a steady work surroundings for employees can be essential in occasions of uncertainty.”
However with the devolved authorities in Scotland prioritising tech sector development, mixed with the present entrepreneurial spirit throughout the nation, the longer term appears vibrant.
“This coming 12 months might be difficult for entrepreneurs throughout the entire of the UK, not simply Scotland,” says the Financial institution of Scotland’s Harris. “It’s essential that the ecosystem continues to get help to construct on the good foundations that’s already producing revolutionary corporations. I’m assured that Scotland will proceed to exhibit that it’s a flourishing place for tech companies.”
The Financial institution of Scotland’s relationship managers are skilled within the tech sector and are eager to help additional development of this vibrant trade. Please get in contact at this time to debate how we’d assist what you are promoting.
Steve Harris is UK head of know-how, SME & mid company at Financial institution of Scotland.
[email protected]
For extra details about how the Financial institution of Scotland helps UK tech companies, click on right here.
In partnership with the Financial institution of Scotland, a part of the Lloyds Banking Group.


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