What the next government can do to maximise Scotland’s tech sector

Earlier this year, I celebrated my 20th year working with ScotlandIS.

Nobody needs to tell me that two decades is a long time, but I feel extremely privileged to have witnessed firsthand the remarkable evolution of Scotland’s technology sector during that time.

From the bustling start-up ecosystems in Edinburgh and Glasgow, to the evolving hubs in Aberdeen and Dundee, Scottish tech companies truly are at the forefront of global innovation.

However, to maintain and accelerate this momentum, we must collectively champion and support the needs of our tech businesses to facilitate as many of them as possible achieving their full potential.

Failing to do so could result in an unforgivable missed opportunity.

As we move rapidly towards the general election, it has never been more important to champion the cause of our sector. I believe there are two key areas - bridging the skills gap and supporting SMEs - where, working alongside the Holyrood administration, the next government can help make a real substantive impact on the tech sector north of the border.

SMEs are the backbone of Scotland's economy, driving job creation, fostering innovation and contributing significantly to GDP. They represent 95% of businesses in Scotland, making their success crucial for the nation’s economic prosperity.

As such, supporting these enterprises is not just beneficial - it's essential. And the next government has a huge role to play in achieving that.

One of the most pressing challenges facing our tech sector is the skills gap. Despite the high demand for tech talent, many companies struggle to recruit and retain the qualified professionals they need. This gap stifles growth and innovation, leaving businesses unable to fully realise their potential.

However, with competition for the most skilled workers at an all-time high, fixing the issue is easier said than done.

A shortage of specialist skills is nothing new for Scotland, it’s a topic that has been much discussed at the highest levels for a long time now. But while there has been much attributing of blame and many lofty hypotheses, there have been painfully few practical solutions suggested.

Solving the issue means taking a long-term view, by seriously investing in education and training. This includes supporting initiatives that encourage young people to pursue careers in tech from an early age, such as coding bootcamps, apprenticeships and partnerships with academia.

Moreover, we need to foster continuous learning and up-skilling opportunities for our existing workforce. Government and private sector collaborations are pivotal here – programmes that offer retraining and skill enhancement can ensure that our talent pool remains competitive and consistently capable of meeting industry demands.

Support in attracting and retaining the right skills and talent is certainly a priority, but it’s not the only area where support is important.

Government procurement presents a significant opportunity for tech SMEs – but it’s often a door that remains stubbornly difficult to open. Public sector contracts can provide a stable revenue stream and a platform for demonstrating capabilities. However, many SMEs find the procurement process complex and opaque.

Taking steps to simplify public sector procurement and provide clear, accessible pathways for SMEs to engage with government projects would be extremely valuable, for all parties.

I believe there’s also an opportunity to be more creative in how public procurement is managed. Often the smartest, most bespoke and effective approaches to a problem come from SMEs.

Smaller businesses have the capacity to take a more specialised approach based on very particular, niche expertise, but these businesses often miss out to the larger organisations that become almost a default choice for the biggest public sector contracts. For these larger suppliers, it can be more a case of a one size fits all strategy.

Legislation that contractually tied those bigger players to using homegrown businesses to support in certain areas of the larger projects, could provide a huge boost to the sector.

What’s more, taking this approach would likely provide more varied and effective outcomes for local and national government – helping them overcome the enormous challenges currently being faced.

Scotland is home to some of the most innovative tech companies in the world. Yet, to ensure our continued success, we must actively promote our tech sector on the global stage. This means not only showcasing our existing strengths but also highlighting Scotland as an attractive destination for tech investment.

We need to foster more and stronger relationships with international investors, providing them with compelling reasons to support and invest in Scottish tech enterprises. Tailored investment incentives and robust support networks can make Scotland an attractive proposition for global backers.

As with the skills gap though, what matters most is the practical support available to the sector. For example, ensuring that tech SMEs have access to funding is crucial. This can be through traditional loans, venture capital, or government grants designed to stimulate tech growth.

Likewise, providing robust support for research and development, through tax incentives or direct funding, will help drive the creation of new technologies, making Scotland a more attractive home for growing businesses.

The sector is growing in spite of government action, not because of it but. If we don’t support the sector to scale, we could end up being consumers rather than innovators.

Space and robotics are both good examples of new sectors developing quickly across the globe. If we don’t grasp these kinds of opportunities, we risk falling behind. That’s why, as we approach the 2024 general election, it's imperative for all stakeholders - government, industry, and the broader business community - to come together and champion the needs of our tech sector.

By addressing the skills gap, simplifying government procurement and promoting our innovations globally, we can ensure that Scotland remains a leading tech hub.

Let us commit to a future where our tech SMEs flourish, our workforce is empowered with the skills of tomorrow, and Scotland's name is synonymous with technological excellence and innovation. Together, we can drive the growth and prosperity of our tech sector, securing a vibrant economic future for all.

Karen Meechan is the chief executive of ScotlandIS