Silicon Glen’s start-up figures set heather alight

Scotland has seen growth of 32.3 per cent in start-ups, going from 4,930 to 6,520 tech enterprises since 2009

Scotland has seen growth of 32.3 per cent in start-ups, going from 4,930 to 6,520 tech enterprises since 2009

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Scotland’s technology sector is firing on all cylinders, with new research ­suggesting it is almost rivalling London for growth in start-ups.

The findings also indicate that since the start of the decade Scotland has ­outpaced other key UK tech hubs including the east of England – an area often ­labelled “Silicon Fen” – and the M4 corridor in the south-west of England.

Nixon Williams, the contractor ­accountancy provider, analysed data ­obtained from the Office for National ­Statistics.

It found that since 2009 the number of IT businesses in London jumped by almost 39 per cent, from 25,085 to 34,750. However, Scotland was right on its heels with growth of 32.3 per cent in start-ups, going from 4,930 to 6,520 tech enterprises since 2009.

The research discovered that Wales and the East Midlands were left wanting, recording respective growth rates of just 7.3 per cent and 8.8 per cent in the number of tech businesses formed since the end of the recession.

According to Nixon Williams, the Scottish electronics manufacturing industry contracted sharply following the bursting of the dotcom bubble in 2000. However, “Silicon Glen” has since diversified towards software development and services and is regaining its status as one of the UK’s most dynamic technology hubs.

London has seen its own technology cluster emerge in recent years, centred around a junction on the boundary of the boroughs of Hackney and Islington, colloquially known as “Silicon Roundabout” owing to the prominence of web-based companies located there.

Martin Brennan, practice manager with Nixon Williams, said: “The Scottish tech sector took a hammering after the dotcom bubble burst, but has since ­diversified away from electronics manufacturing.

“Software development and services now account for a much larger share of Silicon Glen’s output, and are typically less capital-intensive, meaning that start-ups can often get off the ground with minimal financing.

“Much of the focus in recent years has been on London, specifically Silicon Roundabout, which has emerged as a centre for digital start-ups, but regions like Scotland are now rivalling London in terms of growth.”

He added: “The advantage London has is access to markets and a large pool of ­talent, but the cost of doing business in the capital is significantly higher than most other UK regions. By contrast, the Central Belt of Scotland where Silicon Glen is situated has a lower cost base and is home to a large number of universities, which have a proven track record of spinning out tech start-ups.”

A recent jobs report from Bank of Scotland revealed that rates for IT contractors in cities including Glasgow and Dundee have surged in recent months as demand for such work north of the Border hit its highest level in a decade. Many key skills remain in short supply.

The Nixon Williams report also pointed out that while the London tech sector has received significant central government attention and support in the form of Tech City, a publicly-funded body to promote IT start-ups around Shoreditch and the Olympic Park, other established tech clusters elsewhere in the UK, including Silicon Glen, have been “comparatively overlooked”.

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