- Scotland is one of the UK’s strongest tech hubs, with the highest number of verified startups (2,442) outside of London and the South East
- Tech companies in Scotland raised a collective £345 million in venture capital funding in 2020
- There are 4,414 open tech roles in Scotland according to new data by Adzuna
- 31% of all vacancies in Edinburgh are in tech or IT-related
- The average advertised salary for open IT roles in the Scottish capital is £59,776, compared to the UK average of £53,945
SCOTTISH startups continue to flex their strengths in 2020 with tech companies across the country raising a collective £345 million in venture capital funding, according to new data by Tech Nation, the growth platform for tech companies and leaders, and job search engine Adzuna.
Scotland is one of the UK’s biggest tech hubs, with the highest number of verified startups (2,442) outside of London and the South East. The number of venture capital rounds increased in 2020 to 96 up from 87 in 2019, despite the challenges of the pandemic.
Last year two Scottish startups were named among the 10 winners of UK-wide growth platform Tech Nation’s Rising Stars programme. Edinburgh’s tech for good firm Neatebox, which harnesses tech to help disabled people in their day-to-day lives, and Glasgow-based Talking Medicines, which provides pharmaceutical companies with real-time data intelligence, received a support package to help them scale, grow and build their networks.
Startups and fast-growing scaleups raised significant rounds during the year, including biotech firm Roslin Technologies which raised £50m in early VC funding in July, rocket company Skyrora which raised £25.5m in Series A funding in January and cryptocurrency wallet and payments platform, Zumo, which raised a £10m Series A round in November.
Adequate access to finance and talent are some of the main barriers to growth for startups. That’s why the UK government’s British Business Bank continues to provide funding for tech hubs. Since it began in 2012, the bank has issued more than 4,700 loans worth £36.7 million to small businesses in Scotland. Scottish companies also secured a total of £235m in tax relief from the UK government for research and development projects in 2018/19.
These dynamic tech companies need skilled staff to facilitate their growth plans, with Skyrora alone announcing it was hiring 170 staff for a new site in Fife to contribute to its mission of launching its first rocket into space. Growing tech companies in Scotland are competing with the likes of Barclays, Sky and Amazon, as well as established unicorns Skyskanner and FanDuel, for talent. As of December 2020, there are 28,295 open job vacancies in Scotland, 4,414 of which are in IT-related roles. In the capital of Edinburgh, 31% of all job roles are in the tech sector, making it the city’s fastest-growing sector.
The figures on the growth of Scotland’s tech industry are published as the Government’s Digital Economy Council and Tech Nation prepare to host a digital roundtable on 3 February to discuss the challenges facing the tech sector as it works to create jobs and help the region recover from the impact of the coronavirus.
The increased demand for skilled tech talent across the country is reflected in the high advertised salaries for open jobs. In Edinburgh, the average advertised salary for tech jobs is £59,776, ahead of the UK average of £53,945. Advertised salaries are even higher for specialist workers including solutions architects, who are tasked with testing, integrating and programming software systems to suit a company’s needs, who can command a salary of around £69,532, a 20.7% increase from 2019’s figures. Product managers looking for a new job can expect an average advertised salary of £64,054, an increase of nearly 30% from 2019 figures. There are currently 84 product manager vacancies across the city, demonstrating the strength of Scotland’s tech sector.
The UK Government has committed £300 million to Edinburgh and the South East of Scotland to help unlock economic growth and boost jobs. This includes the creation of five new innovation hubs in fields such as robotics and space technologies. A further £13 million of investment in six science centres across the UK includes Dundee and Glasgow.
And, as part of the AI Sector Deal, the UK Government provided £30 million of funding for the University of Edinburgh’s Bayes Centre to help support the development of world leading technology, attract further investment to the region and support high value jobs for the future.
This week’s virtual roundtable is one of a series being held with tech executives, investors and entrepreneurs across the country. Local companies, investors, university representatives and other ecosystem participants will be brought together to learn, share and collaborate on the challenges posed by the pandemic. The learnings will be fed back to the DCMS (Department for Digital, Culture, Media and Sport).
Minister for Digital Caroline Dinenage said: “Scotland’s flourishing tech scene not only attracts investment from global companies such as Amazon and Rockstar Games but is also a production line for stellar homegrown firms including Skyscanner and FanDuel. The UK government has invested in skills, infrastructure, and research and development to create the right business environment for this success, and I am delighted to join entrepreneurs, investors and local stakeholders to celebrate its resilience throughout the pandemic.”
UK Government minister for Scotland, Iain Stewart said: “The tech industry in Scotland is going from strength to strength. It is fast growing and hiring. Scotland is a competitive choice for companies and individuals, backed up by data showing we have one of the highest start up rates in the UK. Scotland’s tech scene will play an important role in creating new jobs and supporting our economic recovery from coronavirus. The UK Government will continue to actively work with and support the growth of the sector in Scotland.”
Dr George Windsor, Head of Insights at Tech Nation said: “From its roots in the electronics industry, Scotland’s tech scene has evolved into a dynamic sector, encompassing everything from space to biotech and fintech. With more companies competing for skilled staff, it’s an opportune moment to meet with local entrepreneurs to hear what needs to be done to support this growing tech hub.”
Andrew Hunter, co-founder at Adzuna said: “Scotland is a brilliant place to set up a tech base, with tech giants and local enterprises setting up shop in cities including Edinburgh, Glasgow, Fife and Dundee. As companies look to recover from the coronavirus pandemic, hiring the right talent will become a challenge, particularly for specialised roles like product managers and solutions architects.”
Rachel Jones, founder and CEO at SnapDragon said: “Edinburgh is a brilliant place to set up a tech company. With an eclectic and international workforce on tap and easy access to businesses at home and across Europe, we’ve been able to beta test our product and prove a need for affordable, effective, brand protection technology. In the past few months, we’ve grown the team including hiring a new COO, and are looking forward to further expansion in 2021.”
Alan Thompson, head of government affairs at Skyrora said: “Scotland’s spaceflight sector is developing rapidly, advancing at a much faster rate than anywhere else in the UK. With Scotland’s space sector estimated to be of value of £4 billion by 2030, along with an array of potential spaceport locations to support polar orbital launch, Skyrora is advantageously positioned in Edinburgh. Our team has been working hard on our developmental programme and we will continue to grow, develop and learn with the aim of launching the Skyrora XL orbital launch vehicle by 2030.”
