SCOTTISH DIGITAL TECHNOLOGY SECTOR CONTINUED TO GROW IN 2019

ScotlandIS survey reveals Business still see opportunities for growth during pandemic

ScotlandIS has released the annual tech sector industry survey today which shows Scotland’s digital technology sector continued to grow in 2019 with an increase in sales and profit margins.

Despite Covid-19, many firms have identified opportunities for growth over the next nine months. Approximately one third of those surveyed believe business opportunities will rise due to increased or new demands related to Covid-19, particularly in cloud services, digital connectivity, remote working technology, and digital health solutions.

Only one in ten respondents indicated that avoiding insolvency is among their top three challenges, indicating the buoyancy of the industry over the last 10 years has made many businesses resilient to the more brutal economic impacts that the pandemic has brought.

However, in line with many other industries, the most common challenges companies expect to face for the rest of the year are securing new business, cashflow and income management, and staff health and wellbeing.

In another indication of business optimism, 71 percent of respondents expect their employee number to stay the same or to increase their headcount by the end of 2020, with 27 per cent forecasting an increase in headcount. In December and January that increase was expected to be substantially higher at 80 per cent.

Around one third of respondents have already furloughed staff following the Covid-19 outbreak, with 30 per cent planning to do so in the next few weeks. Meanwhile 29 per cent have already hired new people or are planning that in the near future, and only eight per cent have already or are planning to make staff redundant.

The survey also revealed that demand for the recruitment of university graduates has increased, with 81 per cent of responding businesses reporting that they are definitely or quite likely to recruit graduates in the next 12 months, up from figures around 70 per cent over the last five years.

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 Scottish Technology Industry Survey 2020 was supported the University of Edinburgh’s Data Driven Innovation Initiative –  part of the Edinburgh & South East Scotland City Region Deal –  and was carried out between December 2019 and January 2020 through an online survey platform and received responses from 200 businesses. To ensure the survey took the latest developments into account, ScotlandIS collected follow-up responses between 1-8 April to gauge the impact of the Covid-19 crisis on the sector’s outlook for 2020.

ScotlandIS is the membership and cluster management organisation for Scotland’s digital technologies industry. The full survey is available to view: https://www.scotlandis.com/scottishtechsurvey/