Scottish tech incorporations lagged behind the UK as sector emerged from the pandemic
The number of new tech companies incorporating in Scotland rose by 37 per cent last year, according to analysis of Companies House data carried out by accountancy business RSM UK.
The rate of increase was slower than in the UK as a whole, where the number of tech incorporations rose by 62 per cent, as well as in Northern Ireland, where the number of new businesses registering increased by 44 per cent.
Areas such as the West Midlands and North East England also saw faster growth at 61 per cent and 59 per cent respectively, while Wales and the East of England both saw slower growth at 25 per cent and 27 per cent respectively.
However, with the number of new businesses in Scotland increasing from 772 to 1,055, RSM tax partner Ross Stupart said the sector appears to have held up well coming out of the Covid-19 pandemic.
“Our analysis shows an unprecedented level of tech incorporations and it is clear to see that the tech sector has thrived in conditions where other industries have either slowed or declined during the pandemic,” he said.
“Add to this several high-value transactions during 2021 involving Scottish tech companies such as Current Health, Snappy Shopper, Quorum Cyber, Intelligent Growth Solutions to name just a few, and it shows that Scotland is providing high-quality and innovative businesses the environment to flourish.”
Formerly known as Snap40, Edinburgh-based Current Health has developed a wearable medical device that continuously monitors the health of a patient across a range of indicators and analyses it to accurately detect the early warning signs of deterioration.
In October 2021, it was acquired for $400m by New York Stock Exchange-listed Best Buy, which is pursuing a ‘health at home’ strategy.
Meanwhile, Intelligent Growth Solutions, a vertical farming specialist that is also based in Edinburgh, raised £42.2m in a funding round at the end of last year.
Stupart noted that more needs to be done to support the tech sector to ensure there will be more success stories to come.
“Covid-19 has encouraged more businesses to embrace technology, both to operate successfully during periods of disruption and to adapt to shifting consumer demands,” he said.
“The rollout of 5G and experimentation with new ideas such as the metaverse and crypto has led to more companies perceiving themselves as a tech business which wouldn’t have been the case in the past.”
“The challenge remains, however, how the Scottish tech ecosystem can develop to ensure the consistency of volume of success stories.”