Digital technology companies 'forecast increased demand'

Opportunity for growth remains in Scotland’s digital technology sector despite the Covid-19 lockdown, industry experts have said.

In a survey of 200 businesses in the sector by ScotlandIS, one third said they believe they will see increased demand.

With many people now working from home, ScotlandIS said there have been more calls for cloud services, digital connectivity, remote working technology and digital health solutions.

Almost 30% of digital technology businesses said they will need to increase staff levels by the end of 2020, while 71% said they expect workforce numbers to stay the same.

Jane Morrison-Ross, chief executive of ScotlandIS, said: “The industry has demonstrated strong growth over the past decade and optimism had risen in 2019 prior to Covid-19.

“Naturally, the pandemic has impacted the outlook for the rest of the year for many, but there is still clear determination across the sector to adapt and respond to several new challenges.

“Digital connectivity has never been more important for businesses and individuals across Scotland, and it is heartening to see the support Scotland’s tech sector is offering to try and make sure no person, and no business, is left behind due to a lack of digital resource.”

Peter Proud, founder and chief executive of Cortex, added: “The marketplace has changed significantly due to coronavirus but it’s important to remember that digital does underpin the economy.

“I have no doubt that as a company and as a sector, we will come out the other side of this.

“Rapid digital transformation is taking place not just across Scotland and the UK, but across the globe.”

However, one in ten businesses surveyed indicated avoiding insolvency is among the top three challenges for the rest of the year.

Other concerns include that the lockdown has caused a stall in new business, cashflow and income management, as well as the health and wellbeing of staff.

Around 33% of companies have already furloughed staff, while 30% say they expect to in the next few weeks.

Ritchie Somerville, head of strategy for the Data-Driven Innovation initiative, said: “When we move out of the lockdown, innovation will be a vital part of how we get the economy working again.

“This report provides clear signals that Scottish companies, whether start-ups or large enterprises, were moving in a positive direction in their use of data.”