Turbulence shouldn’t see Scottish tech firms reaching for the parachutes

Shaun Millican

Shaun Millican

Business Advisory Partner

This article first appeared in Digit on 5 February 2021. 

We all know the feeling, the cabin begins to shudder, the seatbelt light comes, followed by the voice of the captain – “ladies and gentlemen we are currently experiencing some turbulence”.

For businesses, it’s a phrase that arguably feels more pertinent than ever just now, which is ironic given how few of us are able to get on a plane at the moment. Nobody needs reminding how difficult a year it was for businesses and how bumpy the economic landscape has been in the last 12 months. Let’s face it, if we were travelling at 35,000 feet, we’d have white knuckles from grabbing the arm rests and the in-flight meal would be firmly stuck to the ceiling.

Clearly, we’ve got a long way to go and, whether it be COVID, Brexit or climate change, the challenges we face aren’t going to disappear overnight. That being said, there are some shining lights of optimism popping up across the business landscape north of the border.

One such shining light is the Scottish tech sector which, driven by entrepreneurial ambition, passion and innovation, is showing that not all industries are in the brace position.

The 2020 Scottish Technology Industry Survey, which was adjusted to take into account the first phase of the pandemic, gave an early indication that new opportunities might arise. Even at the earliest stage of the COVID crisis, around a third of Scottish tech businesses predicted that the pandemic would bring about fresh opportunities due to increased or new demands relating to the unprecedented challenges society was about to face.

Those early predictions have turned out to be mainly accurate if, actually, a little pessimistic in retrospect. Many businesses across the technology sector have fared very well in recent times, with the demand for new solutions and alternative ways of working skyrocketing. Overnight, technology companies whose product or service – sometimes unintentionally – offered a perfect solution to a post-pandemic world, found that the game, for them, had completely changed. In these situations, the challenge has been to keep pace with the increased activity and adapt plans for funding and talent acquisition to deal with an exponentially increasing demand.

Of course, not every tech company can be a Zoom or a Netflix. However, even those whose product or service has not directly aligned with a specific pandemic driven demand have benefited as a result of increasing willingness to embrace innovative technological solutions for the longer-term.

The pandemic may have taken the majority of the headlines in recent times, but it isn’t the only issue that is driving demand for the tech products. Climate change, for example, is a major long-term challenge for businesses in just about every sector. More and more we are seeing a major push on green energy, food security and mileage, carbon capture and the wider circular economy. Of course, our tech companies must learn from the experiences of companies in the retail sector which have not been able to reposition quickly enough, but there will undoubtedly be a myriad of opportunities in this area for innovative Scottish tech businesses that can prove fleet of foot at the right time.

Similarly, the aftermath of the Brexit deal has brought into sharp focus the issue of food transportation. The vertical farming techniques from firms like Intelligent Growth Solutions are increasingly being deployed across our food supply chain as a result of this ongoing issue.

In direct contrast to the trend across many sectors, the demand for innovation is only likely to increase as we move further into 2021. Those businesses that can manoeuvre themselves into a strong place will be in a strategically advantageous position to rapidly accelerate their commercial interests in the coming months.

It’s clear that tech firms have more opportunities in front of them than many businesses in other sectors just now. That being said, it would be foolish to think that this won’t bring its own challenges, especially in an economic landscape that is not exactly conducive to rapid expansion. Having an appropriate funding strategy in place that accounts for a rapidly changing commercial picture will be vital. Likewise, securing the appropriate talent in an industry that was already seeing demand outstrip supply will be a crucial step. Firms that can tick these boxes could have a chance of competing, not only on the regional and national stage, but at a global level.

With so many opportunities for Scotland’s tech firms this turbulent period of uncertainty and change is an opportunity to turbocharge the sector. There is now a need to turn a promising tech ecosystem into a developer of growth businesses that achieve real scale, and which act as a magnet for both talent and money that can then be reinvested into developing promising new ventures. In a climate that is extremely hostile for many businesses, Scottish tech firms have the opportunity to achieve rapid growth and, in so doing, further improve Scotland’s reputation as an innovative leader in this area. The conditions are right, so our tech businesses and wider ecosystem now need to embrace the opportunities and fly.

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