Double-digit increase in new Scots tech firms
The number of tech companies being set up in Scotland rose by 12 per cent in 2020, eyeing the increased potential of digital services seen during the pandemic, according to new analysis from RSM.
The audit, tax and consulting firm has analysed Companies House data, and found that 545 tech businesses were incorporated north of the Border in 2020, up from 485 in 2019. Scotland sits within the top three for regional growth, behind the West Midlands and London added the tax firm, whose Scottish offices encompass Edinburgh, Falkirk, Glasgow, Aberdeen and Lerwick.
Ross Stupart, head of RSM’s technology and media team in Scotland, said: “Despite the acute impact of the Covid-19 and lockdown restrictions, it’s encouraging to see growth in the Scottish tech sector as entrepreneurs seize the opportunities that the pandemic has revealed for technology to support new ways of working and digital entertainment.”
He also said that in 2020, the UK attracted $15 billion (£11bn) in investment, and ranks third internationally for tech incubations, according to the latest Tech Nation report – “demonstrating that the UK continues to stride ahead of other European countries, despite Brexit, and remains the first-choice tech hub after the US and China”.
Mr Stupart also said: “London will always be a target for investment due to the financial and private equity infrastructure, but it’s great to see double-digit growth in Scotland, where thriving gaming and [artificial intelligence] industries are fuelling regional growth.
“This was mirrored in Accenture’s Tech Talent Tracker 2021, which showed growth in AI and extended reality roles, and, with further support from the Scottish government in this area, we could see a further uplift in tech start up throughout the year.”
Separately, RSM has also looked at the extent to which middle-market businesses – which it said are a “powerhouse” of the UK economy – are exposed to cyber-attacks in the UK.
It has revealed that 56 per cent of respondents say they operate without any form of cyber-security insurance, despite one in five reporting an attack in the last 12 months, “and the likelihood of a continued surge in cyber-attacks in the coming months, and beyond”.
The Real Economy survey in January questioned 400-plus middle-market business leaders – defining the sector as firms with a turnover of £10 million to £750m or financial institutions with assets under management of £200m to £7.5bn.
Of the companies reporting a cyber-attack, more than half said security breaches were up in 2020 from the previous year – although RSM also said it was “perhaps surprising” that 92 per cent of firms surveyed were confident in their existing measures to safeguard sensitive data.
Paul O'Leary, technology risk assurance and cyber security partner at the firm, said: “With employees working remotely and not being fully safeguarded by corporate infrastructures, recognising and mitigating against cyber threats is more important than ever.
“The challenge with cyber insurance sits in the fact that businesses still don’t know what they need their insurance to provide cover over. Additionally, questions remain on whether the UK workforce is adequately skilled with technically-trained cyber security professionals, and the hand-in-hand role security measures will have for businesses when looking at their wider cyber footprint.”
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