Scottish technology businesses are planning a major employment drive, as increased exports push sales.
Trade body ScotlandIS has released the results of its annual Scottish Technology Industry Survey, which reveals that 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 thirds (63%) of the new jobs created are expected to be sourced in Scotland.
The technology sector already employs more than 80,000 people in Scotland, with around 15,600 new digital jobs 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, chief executive 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.”
According to ScotlandIS, the number of tech companies in Scotland having consolidated their growth has risen sharply. The proportion of businesses recording turnover over £1m 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.
Meechan said: “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,“ she continued, adding: “Not only are more companies recording seven-figure turnovers, but more and more are also seeking to export their services outside of Scotland.”
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.
The average annual salary of digital tech workers is £36,900 - 26% higher than the average salary of all workers in Scotland.
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