Tech sector sees sales bounce back to pre-pandemic levels, ScotlandIS survey finds

Scottish tech businesses bounced back to pre-pandemic levels of sales growth in 2021, with 72 per cent of companies reporting an increase for the year – the same proportion as in 2019.

According to ScotlandIS’s Scottish Technology Industry Survey, this is a marked improvement on 2020, when just 44 per cent of businesses saw sales increase.

Data analytics, artificial intelligence and the internet of things are all helping drive the growth, but cyber security is seen as the biggest growth area, with 31 per cent of tech businesses seeing it as an opportunity in the year to come.

Less positively, exports are in decline, with 56 per cent of respondents currently exporting – down four percentage points on the previous year – and one in five Scottish tech businesses saying they have no plans to export in the current year.

The survey also found that a shortage of skills across most sectors is becoming increasingly challenging for the industry to manage.

ScotlandIS chief executive Karen Meechan said: “Data gathered from this year’s survey gives clear signals that the tech sector is back in growth mode after weathering initial impacts of the pandemic.

“As it comes to the end of the academic year for many Scottish students, we are pleased to see how many organisations across the sector are planning to recruit graduates, but the year ahead will require continued collaboration across industry, academia, and our education system to build a pipeline of talent within Scotland. We’ll continue to do as much as we can to support that.”

Economy secretary Kate Forbes said: “It is encouraging to see more technology businesses in Scotland reporting increased sales, in line with the return to pre-pandemic retail sales levels more generally.

“We want to establish Scotland as one of Europe’s leading start-up economies – that is why the Scottish Government is committed to the most radical reforms of the Scottish entrepreneurial system since devolution.

“A key ambition in our strategy to transform the economy is to establish Scotland as a world-class entrepreneurial country, founded on a culture that encourages, promotes and celebrates entrepreneurial activity.”