Scotland Fast Becoming The IT Place For Tech Start-Ups

Posted on 10 February, 2015 by Cliff Goodwin

Scotland’s booming technology sector has already outpaced Britain’s traditional high-tech hubs and is snapping at London’s heels to become the nation’s start-up capital.

scotland-fast-becoming-the-it-place- for-tech-start-ups

According to Office for National ­Statistics figures, analysed by the contractor-accountancy provider Nixon Williams, 6,520 information technology businesses have now launched or moved to Scotland — an increase of 32.3 per cent on the 2009 total of 4,930.

During the same period the London total jumped by almost 39 per cent, from 25,085 to 34,750 tech new comers. But overall, Scotland has ­outpaced every other key UK tech hub including the east of England’s “Silicon Fen” and the M4 corridor in the south-west of England.

The research also discovered that since the end of recession, both Wales and the East Midlands have badly lagged behind the IT revival with respective growth of just 7.3 per cent and 8.8 per cent.

“The Scottish tech sector took a hammering after the dotcom bubble burst, but has since ­diversified away from electronics manufacturing,” explained Martin Brennan, practice manager at Nixon Williams.

“Software development and services now account for a much larger share of Silicon Glen’s output, and are typically less capital-intensive, meaning that start-ups can often get off the ground with minimal financing.

“Much of the focus in recent years has been on London,” he added, “which has emerged as a centre for digital start-ups, but regions like Scotland are now rivalling London in terms of growth.”

London has seen its own technology cluster expand in recent years, centred around a junction on the boundary of the boroughs of Hackney and Islington, colloquially known as “Silicon Roundabout” owing to the prominence of web-based companies located there.

Commenting on London’s apparent advantage, Brennan said that as well as having access to markets and a large pool of ­talent, the cost of doing business in the capital is significantly higher than most other UK regions.

“By contrast, the central belt of Scotland, where Silicon Glen is situated, has a lower cost base and is home to a large number of universities, which have a proven track record of spinning out tech start-ups,” he added.

The Nixon Williams report also pointed out that while the London tech sector has received significant central government attention and support in the form of Tech City — a publicly-funded body to promote IT start-ups around Shoreditch and the Olympic Park — other established tech clusters elsewhere in the UK, including Silicon Glen, have been “comparatively overlooked”.

Issued recently, a separate Bank of Scotland jobs report revealed that rates for IT contractors in cities including Glasgow and Dundee have surged in recent months as demand for such work north of the border hit its highest level in a decade.




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