Survey reveals rosy outlook for 2018 across Scotland’s digital technology industry
Confidence is high amongst Scotland’s digital technologies companies as they look to the year ahead with research conducted by ScotlandIS reflecting optimism over sales, profits and international growth. The 13th annual Scottish Technology Industry Survey reports that 80% of respondents expect a positive 2018 with nearly one third forecasting more than 50% increase in sales. 80% of those surveyed also expect to increase employee numbers in the next 12 months, up from 66% in 2016.
According to the survey conducted by ScotlandIS, the trade body for the digital technologies industry, 68% of businesses recorded improved sales during 2017 compared to the previous year. Increased profit margins were reported by 47% of respondents for 2017, only 1% less than 2016.
Key challenges highlighted are staff recruitment and retention, developing new business and the current political situation. Staff recruitment concerns grew by 9%. Changes to regulations, such as the introduction of GDPR, emerged as a new challenge increasingly cited by respondents.
International markets remain a key focus for Scotland’s digital companies with 64% of businesses already exporting and a further 17% planning to do so. As in previous years, the top three export markets remain the Rest of the UK, Europe and North America. Europe has, however, replaced the Rest of the UK as the top destination for exporters.
In terms of people, the local marketplace is anticipated to provide the bulk of new talent with 70% expecting to recruit from within Scotland. Confidence appears to have grown in hiring from further afield with 19% planning to find new recruits mainly outside the UK, up from 9% last year.
73% of those responding said they were ‘definitely’ or ‘quite likely’ to recruit graduates. This figure has stayed relatively steady over the last five years. Demand for Modern Apprentices is up, with 45% saying they would be ‘definitely’ or ‘quite likely’ recruit in this way, compared to 38% in 2017 and 29% in 2016.
This year, for the first time, ScotlandIS polled members on steps they were taking to tackle the gender gap. More than half had found that offering flexible work patterns had helped in recruiting female staff. The vast majority of employers had either tried or were considering this and other initiatives such as providing more female role models when engaging with schools and universities, return to work training, and supporting groups like Girl Geeks and Scottish Women in Technology.
Software & web development and commercial & business support are the most in demand skills with around three-quarters of respondents identifying a need for these.
Polly Purvis, chief executive of ScotlandIS, said: “The survey provides an important snapshot from those at the coal face in the industry. This year’s survey shows that Scotland’s digital technology industry is thriving with many of our businesses enjoying success at home as well as experiencing increasing overseas demand.
“The overwhelming majority of respondents are optimistic about the year ahead and are forecasting business growth. This is good news not just for our industry but the country as a whole as more jobs are created and investment increases across the sector.”
64% of small businesses, 73% of medium businesses and 78% of large businesses, reported increased sales in 2017. Looking to 2018, 87% of small businesses, 86% of medium businesses and 81% of large businesses expect sales to increase.
“As in previous years, there are significant concerns over staff recruitment and retention and to a smaller extent about the impact of Brexit,” Purvis added. “There is a continuing need for skilled newcomers to ensure our businesses can fulfil their potential.
“For graduates and apprentices, both from here and abroad, there is an exceptional opportunity to forge a career in an exciting and expanding market. In addition, the increasing emphasis on the importance of closing the gender gap means minds are focusing on ways to encourage women to join or return to careers in the industry.”
There were 205 respondents to the Scottish Technology Industry Survey 2018. Polling took place during January and February this year.