In Could 2024 UKTN launched a regional tech report in partnership with KPMG placing a highlight on the innovation, strengths and challenges confronted by the Scottish tech trade.
To discover the subject additional, UKTN and KPMG introduced collectively a bunch of consultants in all issues Scottish tech for a panel dialogue on how the local people can advance the nation’s world standing and speed up the spectacular development seen in Scotland.
The panel mentioned how Scottish tech companies can method the early levels of development, how a spot in Scotland’s digital expertise could be overcome and why tech corporations must suppose globally lengthy earlier than they contemplate increasing internationally.
Scaling Scotland’s tech companies
A latest report from KPMG revealed that in 2023, Scottish companies pulled in £359m in VC investments in 2023, with standout offers together with various meat startup ENOUGH’s £31m spherical and fintech DirectID’s £7.69m increase courtesy of the funding arm of IKEA.
This momentum has continued into 2024, with Scottish companies securing £184m of VC funding within the first half of the 12 months regardless of a worldwide slowdown in fundraising.
Although this means a optimistic efficiency for the nation in contrast with different UK areas, there’s a clear urge for food for extra funding, notably in the direction of the scaleup stage, the place Amy Burnett, KPMG Rising Giants lead for Scotland, stated there’s a “chasm” that “we have to deal with”.
For tech companies in Scotland to develop, as is the case anyplace else, attracting the eye of traders is important, however for Patricia El-Jichi, funding supervisor at Par Fairness, the excellent news is the nation provides loads of alternatives to take action for these prepared to place within the work.
“Don’t be afraid to faucet into your native ecosystem,” she stated. “Your native incubators, accelerators, funding applications.”
In response to El-Jichi, Scotland advantages from a robust and collaborative ecosystem that’s desperate to assist its members.
“They’ve their very own networks, they usually can introduce you to different traders which are based mostly in different elements of the UK or overseas.”
This was mirrored in UKTN’s Scotland report, which discovered nice enthusiasm within the trade relating to the provision of networking occasions and communities, with highlights together with Glasgow Metropolis Innovation District, ONE Tech Hub and Techscaler.
El-Jichi additionally famous how encouraging the launch of Glasgow Tech Week, a first-of-its-kind occasion in Scotland, earlier this 12 months was.
Placing your corporation in entrance of the eyes of traders is simply a part of the battle, nevertheless, in keeping with Dr Poonam Malik, co-founder and chair of Microplate Dx.
Dr Malik urged founders to “do their very own investor analysis” as a result of “you must align with and method the traders which are best for you, in any other case you’ll hear extra no’s than yeses”.
One factor particularly that corporations want to know about potential traders in keeping with Dr Malik is “danger urge for food”.
That is of specific concern to many subsectors that make up quite a lot of Scottish tech, from life sciences to house tech, these are sectors that require not solely years of analysis behind them but additionally a regulatory pathway which will postpone these not prepared to take a position patiently.
Digital expertise scarcity? Get artistic
In UKTN’s Scotland report, respondents to the stakeholder survey largely believed that the provision of expertise wanted bettering, one thing that a lot of the UK has been battling.
Dr Malik stated corporations in Scotland needs to be pondering “creatively” about methods to plug that expertise hole, whether or not that’s by means of “distant working” and even contemplating sponsoring visas, one thing that may be off-putting to smaller corporations because of the related prices.
In response to Onyinye Igbokwe, head of regional engagement for central Scotland at Codebase, there’s a massively untapped supply of expertise within the type of the nation’s huge provide of worldwide college students.
Scotland is dwelling to among the world’s greatest increased schooling establishments that draw proficient people from all corners of the world.
She described her personal expertise visitor lecturing on the College of Glasgow. In a single specific class, she seen that the overwhelming majority of scholars have been worldwide, and whereas they have been all vivid and educated, nearly none of them have been conscious of the tech corporations based mostly simply outdoors their campus.
“They go to high school right here, study no matter they’re studying and after they go dwelling…worldwide college students are coming in right here, and we’re letting them go.”
For Igbokwe, college enterprise groups must give attention to encouraging these proficient college students to stay round and develop their concepts regionally. There could also be nice assets for spinning out corporations from universities however with out correct outreach to those college students, they’ll haven’t any cause to remain in Scotland past their research.
She added that past college college students, lots of the worldwide individuals coming to Scotland might contribute massively to the native tech economic system if the obstacles to recruitment allowed it.
A big a part of the issue there, in keeping with Igbokwe, is that a lot of the regulation affecting that is decided by Westminster, which she feels is extra targeted on immigrant communities in England.
“Scotland is working in deficit for it as a result of you may’t preserve expertise right here due to all of the stringent guidelines, and England is healthier off as a result of they don’t must preserve these individuals there as a result of they have already got variety.”
El-Jichi added that whereas Scotland doesn’t have the extent of multiculturalism as London, it stays a gorgeous place for foreigners as a result of its high quality of life and the tradition of tolerance. To go a step past in retaining international expertise, she argued inspecting the construction of visas is a should.
Dr Malik identified that “an enormous barrier in worldwide college students beginning and rising profitable companies is lack of native networks for them, individuals who might consider of their enterprise concept early and again this with equal of ‘family and friends’ funding rounds.
Scottish tech on the worldwide stage
Extra corporations reaching the stage of a scaleup and past is one thing the Scottish tech trade is eager to see, however to actually elevate its world standing, there’s a want for corporations to make a splash internationally.
For Sandy Kennedy, a director at Clever Development Options, which has itself turn out to be an intercontinental powerhouse, there’s a actual alternative to do that by pondering past the boundaries that many in Scotland place upon themselves.
Kennedy described how Clever Development Options, which develops vertical farming know-how, partnering with academia and analysis organisations massively boosted the corporate’s progress.
The problem, nevertheless, is that in keeping with Kennedy, “we do love a silo in Scotland”.
He argued that there’s a tradition of siloing during which all people is “put in a field”, whether or not they’re traders, lecturers or entrepreneurs.
“That’s not the way it ought to work, we’ve bought to interrupt down silos, we’ve bought to actually begin pondering”.
That is a part of what kinds what Kennedy described as a worldwide mindset, one thing that must be baked into founders proper from the start of the companies’ journeys.
After Clever Development Options had secured a number of seed rounds, Kennedy stated they made the deliberate determination to hunt the following stage of funding in America.
“We believed that a part of our story wanted to be that we have been drawn to the highest VCs on this planet…so, due to this fact, a part of our narrative was not that we’re nice in our small Scottish market, however that we’re nice in a world market.”
The group nonetheless had a robust want to characterize and proceed to assist Scotland, partially as a result of it felt its “goal is rooted in Scotland”, however as Burnett put it, “you’ve bought to go the place the cash is”.
Thanks to the entire panellists for sharing their insights into the way forward for the Scottish tech trade, in addition to those that attended the dialogue.
