11 Sep 2017

Scotland – the home of bagpipes, haggis, and increasingly, multi-billion-pound tech businesses

When you think of ‘unicorns’, nine times out of ten it conjures up images of mythical beasts found in fairytales. What you might not know though is that it’s also the name given to high flying start-ups desperately sought after by investors. Why? Well to use another mythical animal analogy, these are the technology golden gooses whose valuation exceed $1 billion. There are just under 200 in the world and Scotland has been the birth-home to two of them.

Located in Edinburgh’s Quartermile, travel search engine site, Skyscanner, which was sold to Chinese firm Ctrip for £1.4bn and fantasy sports firm FanDuel valued at $1bn (£690m) have gained international recognition. Additionally, what they have also been able to do is showcase Scotland’s tech industry – a sector which isn’t just buoyant, but one that is booming. Research by ScotlandIS, the country’s trade body for ICT, has shown that Scotland is only second to London in tech growth, with increasing start-up activity creating a wide range of new entrants to the market.

While all these signs are positive, it’s important to recognise that the road to success for Scotland’s tech sector has not always been smooth. Still feeling the effects of the decline within its heavy industry sector, the late 80’s saw the emergence of the internet and the explosion of personal computers transform Scotland as a centre for electronic manufacturing excellence.

Coined under the name ‘Silicon Glen’, multi-national tech firms ploughed money into building factories and research facilities along the M8 corridor. By the mid ‘90s, Scotland and technology went together like neeps and tatties. Fabrication plants blossomed across the land, people spoke excitedly about Scotland as the gateway to electronics in Europe and with the region employing an estimated 55,000 people and producing 35 per cent of all of Europe’s PCs, what could possibly go-wrong?

Almost as quickly as it had risen, the dotcom crash of the early noughties burst the bubble – and with it, Silicon Glen. Costs for creating new fabrication facilities sky-rocketed, and a general aversion to investment saw manufacturing moved offshore. From this, an estimated 20,000 people lost their jobs. The fallout left the country in a state of flux; Silicon Glen was meant to usher in a new age of industry. It didn’t, but as the curtain came down, another began to rise driven by those left unemployed from the downturn. Putting their skills to good use and driving innovation and life back into Scotland’s tech sector, it was these first shoots of recovery that were so critical to putting Scotland on the path to becoming the vibrant and bourgeoning market it is today.

Gareth Williams, the CEO of travel search engine site Skyscanner, was once interviewed about what he saw as the advantages of being head-quartered in Scotland. In his response he spoke at length about the importance of having easy access to world-class universities excelling in computing and digital skills, the availability to a rich source of people with the right qualities to drive innovation, and also having the support of a strong startup community that is willing to support one another.

These factors have been critical in establishing Scotland’s technology industry on solid grounds. In Edinburgh, industry heavyweights such as Microsoft, Apple and Amazon all have a presence within the city. Additionally, CodeBase, the largest technology incubator in the UK and one of the fastest growing in Europe, is home to over 80 of the brightest, upcoming technology businesses in existence, and has recently expanded into central-Scotland, with a new operation in Stirling.

Glasgow’s transformation from industrial powerhouse to leading digital technology cluster is highlighted by the development of the Fairfield Offices in Govan – now home to Rookie Oven, and one of several locations in the city providing a home to a new breed of digital tech start-ups. In Aberdeen, the opening of a new £180m oil and gas technology centre aims to become one of the top three sites globally for innovation and technology development, with a particular focus on subsea production, drilling and wells, mature basin asset management, ensuring decommissioning excellence, and oil and gas data science.

Dundee, the birth place of the world’s biggest-selling video game Grand Theft Auto, is now a globally recognised hub for video game design and home to a third of all of Scotland’s video game developers. In central Scotland, companies like enterprise mobility specialists, DOGFI.SH Mobile, have made the Stirling University Innovation Park their home, capitalising on the city’s excellent transport links and access to a talented pool of graduates coming from the University.

The Scottish government has been central to this success, making significant investments to keep the country at the forefront of digital technology. These factors have been essential in establishing solid foundations and as we look ahead the future looks very bright for Scotland’s digital technology sector.

Nick Bird, Spreckley, guest-blogger