The digital technology sector continued to grow in 2019 with an increase in sales and profit margins, according to the latest annual industry survey conducted by membership group ScotlandIS.
Despite the impact of Covid-19 on the economy, many firms have identified opportunities for growth over the next nine months, with about one third of the 200-plus businesses surveyed saying they believe they will see increased demand.
With many people now working from home, ScotlandIS said there have been more calls for cloud computing services, digital connectivity, remote working technology and digital health solutions.
Almost 30 per cent of digital technology businesses said they will need to increase staff levels by the end of 2020, while 71 per cent said they expect workforce numbers to stay the same.
Jane Morrison-Ross, chief executive of ScotlandIS, said: “The industry has demonstrated strong growth over the past decade and optimism had risen in 2019 prior to Covid-19.
“Naturally, the pandemic has impacted the outlook for the rest of the year for many, but there is still clear determination across the sector to adapt and respond to several new challenges.
“Digital connectivity has never been more important for businesses and individuals across Scotland, and it is heartening to see the support Scotland’s tech sector is offering to try and make sure no person, and no business, is left behind due to a lack of digital resource.”
The survey found that one in ten businesses saw avoiding insolvency as among the top three challenges for the rest of the year. Other concerns include that the lockdown had caused a stall in new business, cash-flow and income management, as well as the health and wellbeing of staff.
Some 33 per cent of companies have already furloughed staff, while 30 per cent say they expect to in the next few weeks.
Ritchie Somerville, head of strategy for the Data-Driven Innovation initiative, said: “At this difficult time our thoughts are obviously with those directly affected by Covid19. When we move out of the lockdown, innovation will be a vital part of how we get the economy working again.
“This report provides clear signals that Scottish companies, whether start-ups or large enterprises, were moving in a positive direction in their use of data.
“It also highlights the need to combine talent, adoption, data and enterprise to drive the full value of data, both in companies and for our citizens,” he added.
The 2020 survey was supported the University of Edinburgh’s Data-Driven Innovation Initiative.
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