Outlook positive for IT sector in Scotland, ScotlandIS survey finds

People on a keyboard - Image credit: peshkov/Adobe Stock

Eighty per cent of respondents to an IT industry survey have said they expect 2018 to be positive for business.

Eighty-six per cent of respondents to the ScotlandIS digital technology sector survey expect their business to grow this year, with nearly a third predicting an increase in sales of over 50 per cent, while 80 per cent expect to increase employee numbers.

Last year was also a successful year, according to the survey, with 68 per cent reporting improved sales and 47 per cent recording increased profit margins, just a slight drop on 2016.

Among the key challenges highlighted by the survey are staff recruitment and retention, developing new business and the current political situation.

Changes to regulations, such as the introduction of GDPR, was a new challenge cited by respondents, while staff recruitment concerns increased by nine per cent on the previous year.

The majority of recruitment will be local, with 70 per cent expecting to recruit from within Scotland, but 19 per cent plan to find new staff mainly outside the UK – up from nine per cent last year.

While demand for graduates has stayed steady in the survey over the past five years, demand for Modern Apprentices is up, with 45 per cent saying they would ‘definitely’ or ‘quite likely’ recruit apprentices, compared to 38 per cent in 2017 and 29 per cent in 2016.

The most sought after skills areas were software and web development and commercial and business, with around three-quarters of respondents identifying a need for these.

The coding languages Java, JavaScript and Python are most in demand, as well as software and web development, cloud computing, cyber security and data-related skills and, on the commercial side, digital marketing, account management and solution selling.

For the first time this year, ScotlandIS polled members on steps they were taking to tackle the gender gap in IT and 55 per cent had found that offering flexible working had helped them recruit more female staff.

Most employers had either tried or were considering this.

Some were also involved in other initiatives such as providing more female role models when engaging with schools and universities, return to work training for women who had had a career break and supporting groups such as Girl Geeks and Scottish Women in Technology.

Polly Purvis, chief executive of ScotlandIS, said: “This year’s survey shows that Scotland’s digital technology industry is thriving with many of our businesses enjoying success at home as well as experiencing increasing overseas demand.

“The overwhelming majority of respondents are optimistic about the year ahead and are forecasting business growth.

“This is good news not just for our industry but the country as a whole as more jobs are created and investment increases across the sector.”

She added: “As in previous years, there are significant concerns over staff recruitment and retention and to a smaller extent about the impact of Brexit.”

“There is a continuing need for skilled newcomers to ensure our businesses can fulfil their potential.

“For graduates and apprentices, both from here and abroad, there is an exceptional opportunity to forge a career in an exciting and expanding market.

“In addition, the increasing emphasis on the importance of closing the gender gap means minds are focusing on ways to encourage women to join or return to careers in the industry.”

The digital sector is a growth area in Scotland. Between 2010 and 2017, the number of digital technologies businesses in Scotland increased by 60 per cent or approximately 3,500 companies.

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In 2016, the digital technologies sector contributed £5.9bn to the Scottish economy, more than four per cent of total GVA (gross value added).

The sector’s GVA is forecast to grow by 38 per cent to 2024, making it the fastest growing sector in Scotland.