Why now is the time to launch a tech business in Scotland
There has never been a better time to start a technology business. Digital is enabling new products and services and improving productivity in industries as diverse as retail and aquaculture, tourism and leisure, and health and social care. The potential is enormous.
The coming together of proven mobile applications, low cost sensors, the renaissance of artificial intelligence, increasingly good broadband coverage, and competitively priced cloud computing services provide a technology platform that is available to all, offering more opportunities than ever before. The combination of smart analytics, the Internet of Things and ‘big data’ is driving disruptive technology solutions, particularly in financial services, and life sciences.
All you need now is an idea …..
Scotland is already home to over two thousand digital technologies companies, many of them well established and growing steadily, selling into markets in Scotland, the rest of the UK, and globally.
It is essential we have the right environment to increase that figure further, nurturing the next generation of businesses to introduce their ideas and innovations, to contribute to the nation’s economy in the years ahead while also delivering on the global stage.
It’s great to see that Scotland is now closing the gap on the leading technology nations and delivering the facilities our innovative businesses require, within an increasingly sophisticated start-up ecosystem. From new business support and advice services, experienced mentors and investors, a highly talented workforce and access to financial capital, the infrastructure is now in place to ensure Scotland can capitalise on the innovation we have been rightly famous for.
For fledgling businesses, a range of technology incubators (TechCube, CodeBase, Tontine and Elevator) and accelerators like SeedHaus and CivTech, provide not only premises, but real expertise and experience from like minded entrepreneurs, expert specialist advice and access to funding. Innovative initiatives such as Converged Challenge and ESpark offer budding entrepreneurs help in getting their ideas from ‘light bulb moment’ through proof of concept to market ready product.
These programmes have augmented Business Gateway and Scottish Enterprise’s support as well as other traditional start-up assistance platforms.
The next challenge is how to ‘scale-up’, growing rapidly from start-up to established business. So these start-up programmes are now being augmented with tailored high growth programmes to help technology businesses accelerate through the various growth stages.
The well-publicised international successes of SkyScanner and Intelligent Point of Sale, have lit the way for a number of businesses, such as Glasgow’s Smarter Grid Solutions, whose software manages distributed power generation systems, and Simul8 with their world class simulation software, now thriving outwith the home Scottish and UK markets.
Similarly, Edinburgh-based Nucleus Financial now manages more than £10bn in assets after originally being founded by seven financial advisers wishing to give their clients greater flexibility, and FreeAgent the firm behind the easy-to-use accountancy software beloved of small businesses, floated their company on the AIM market last year.
More established Scottish based tech businesses such as Craneware, Petrotechnics, KAL, and Axios build increasing export earnings year on year, whilst the specialist divisions of international companies such as Amazon with its world leading software development centre in Edinburgh, Avaloq, NCR, SAS, Verint and Toshiba Medical Systems, have chosen to base their operations in Scotland to take advantage of the talented and innovative workforce.
There is a great feeling of community with successful entrepreneurs who have grown their own companies sharing their experiences and knowledge of different markets, their hints, tips and lessons learned. These peer-to-peer insights are invaluable for those making their way in the sector.
Scotland also benefits from an exceptional network of informed angel investors, and a range of early stage funding such as SMART awards and Scottish Edge grants. Professional advisors are increasingly knowledgeable about the growing tech sector, understanding the potential value of start-ups and their worth to the economy.
Investors such as Par Equity, Pentech and SEP can help companies with venture capital, often in partnership with the Scottish Co-investment Fund. But for additional VC funding rounds the Scottish market is limited, and firms need to look to London and the US. Securing investment from Sequoia Capital was a strategically important step for Skyscanner, putting it very firmly on the global map and companies like FanDuel have also raised US funding to fuel growth and provide market gravitas.
There are still areas for improvement – more venture capitalists with Scottish offices would be great but London, one of the world’s biggest investment markets, is only an hour away; there is a shortage of talented industry leaders with successful track records in international marketing and sales. We should promote Scotland as a base for internationally ambitious technology businesses and seek to attract back many of the Scots in the worldwide diaspora who have successfully built companies of scale.
But for the most part we increasingly have the right pieces in place for those with the germ of an idea to turn it into a business opportunity.
ScotSoft 2017, which takes place today, is the annual celebration of Scotland’s dynamic technology sector. With a leadership forum and developers’ conference, industry leaders will share their experience and insights across a range of technology and business themes, from robotics and Internet of Things to growing global businesses. The event also serves as an exceptional networking opportunity for those in the sector to strengthen bonds and share ideas.
I am sure there will be stories of success from the past 12 months and I’m confident many more will be generated in the year ahead. As opportunities arise and the technology industry evolves, those considering their own start-up can be confident the sector is in a stronger place than ever before to ensure Scottish businesses thrive on the world stage.
Polly Purvis is chief executive of ScotlandIS