By MARCUS FORD
Scotland is setting the pace in the fast-evolving technology sector with a flourishing growth rate that is helping to drive Edinburgh’s emergence as a key hub to rival London.
With more than 50 years of technology manufacturing experience, Scotland continues to forge a global reputation for innovation, and for excellence. This is an encouraging success story that is rooted in a dynamic collaboration between business, universities, and the Scottish government; partnerships that are underpinning a sector in the business of generating success.
There have now been around 3,000 start-ups in the last five years, and Scotland’s wealth of talented people and world-class universities, together with support for research and access to funding, is spawning some of the most exciting businesses in the global technology market.
At the heart of this burgeoning sector is Edinburgh, one of only a few UK cities outside of London that is home to technology ‘unicorns’, where businesses have been valued at more than $1bn (£700m), with predictions for that number to grow as technology industries continue to develop their international muscle.
Edinburgh’s existing unicorns are digital big-hitters Skyscanner, the flight comparison website, and FanDuel, the fantasy sports website, and with overseas investor interest on the up, the potential for international growth is clear. The role of the University of Edinburgh’s research and innovation unit, Edinburgh Research and Innovation (ERI), remains key to developing this success. ERI is one of the UK leaders in the successful commercialisation of the intellectual property generated from the university’s world-class research, through licensing technologies to existing companies, and new university spin-outs.
IN THE last five years, the university has supported the start up of more than 180 new businesses in the area, with 44 helped by ERI in the past year alone. Edinburgh’s technology hub is now made up of fast-growing start-ups such as Cortex, pureLiFi and Pufferfish, in addition to the established international companies Microsoft, Apple, and Amazon. Edinburgh also hosts business-based assets such as Codebase, the UK’s largest incubator, CodeClan, Scotland’s Digital Skills Academy, and Informatics Ventures, the Edinburgh-based commercialisation support mechanism.
The university is also working with Scottish Enterprise’s High Growth Spin-Out Programme to build Scottish companies that have the potential to achieve a £5m turnover or a commercial investment of £10m within five years, with projected continued growth. Another important aspect of making Scotland, and Edinburgh in particular, so attractive to investors, in addition to the quality of research and projects, is the entrepreneurial culture surrounding its world-renowned universities.
It’s also significant that the higher education system, where Scottish university and college students do not have to pay course fees, results in the creation of highly-trained individuals who are not carrying the levels of debt that may burden graduates from other areas, and are therefore more inclined to take a chance on a start-up rather than look immediately for the security of employment.
EDINBURGH CAN also offer an affordable and attractive quality of life, and this overall vibrancy in terms of entrepreneurial culture is helping to fuel the levels of success, with students in this city immersed in an environment that is alert to the potential of innovation and commercialisation. Investment in Scottish technology has increased in each of the past three years, up by 45 per cent in 2014 against the previous year, with the amounts invested also rising by more than 20 per cent, and with a particular surge of interest in ICT. Total investment is now close to its highest level of £250m which was reached in 2001.
David Smith, Director of Technology and Engineering at Scottish Enterprise, says Scotland’s capital is providing a platform for the upsurge in Scotland’s new and innovative companies. “There’s a real buzz around the Edinburgh technology scene which is growing in prominence as one of the leading European tech cities due to years of sustained investment in talent and innovation,” he says. “Edinburgh is now one of Europe’s most successful technology clusters, built around an impressive collection of entrepreneurial talent, science and innovation assets.”
Playing a significant role in helping to attract and encourage overseas interest is Scottish Development International (SDI), the international arm of Scottish Enterprise and Highlands and Islands Enterprise that helps overseas businesses to tap into Scotland’s world-class capabilities in innovation and commerce, and also works to help Scottish companies to do more business overseas, while also promoting this country as a good place to live and work. For potential investors, who will be able to access an extensive range of opportunities in funding, the message from Scotland’s thriving technology sector is one of opportunity, and connectivity: to education, to skills, to innovation, and to markets.