Scottish tech sector optimistic amid challenges for 2025

The latest report by ScotlandIS has found that the Scottish tech sector remains optimistic despite a challenging economic and geopolitical environment.

The study indicates that nearly three-quarters of firms (73%) are maintaining a positive outlook for 2025. Although this marks a slight decrease from the previous year's figure of 78%, it still highlights an overall sense of confidence across the sector. This sentiment is largely driven by expectations of growth and fresh opportunities.

Significant growth is anticipated in the area of artificial intelligence (AI) and machine learning (ML). The report shows a rise in the number of firms expecting new opportunities in this area, increasing from 62% in 2024 to 69% in 2025. Accompanying this is an increase in demand for skills within AI and ML, noted by 70% of businesses surveyed.

Some challenges remain, especially for smaller businesses. The report cites that 16% of firms reported cash flow difficulties in 2024, up from just 3% in 2023. This suggests financial pressures may impede growth for a portion of the industry.

To address these challenges, ScotlandIS plans to foster stronger collaborations with policymakers, industry bodies, and educational institutions. Karen Meechan, the CEO of ScotlandIS, highlighted the need for continued support, saying, "There's a lot to be excited about in the Scottish tech sector right now. For example, the UK government's increased focus on AI, has driven huge growth for our industry in that area. This is reflected by some encouraging responses to our survey and it's great to see a strong sense of optimism continue as we progress further into 2025. With the ongoing geopolitical and economic challenges, the fact we've seen some slight softening when compared directly with last year's results is hardly surprising. Seeing the Scottish tech sector remain so positive, even in the middle of a very tough climate for businesses, is testament to how resilient our industry really is."

Karen Meechan also emphasised the importance of a supportive ecosystem, saying, "Given what our members are telling us, it's important we don't forget about the bigger picture. Like a healthy ecosystem, our sector needs support in order to thrive. Over the last year, we have shared over 400 opportunities with our members to support them entering new markets, building strategic partnerships and accessing the talent essential for growth. Looking at the year ahead, we will continue to back up our members, working closely with governments and policymakers to show just how valuable our tech sector really is."

Stephen Coleman, CEO and Co-Founder of CodeBase, underscored the rapidly evolving global technology landscape, pointing out that, "The global technology landscape is evolving at an increasingly rapid pace, with advances in AI and a shifting investment landscape creating both challenges and opportunities. As this report shows, these macro movements are being felt in Scotland. The issues are complex and multi-faceted, but Scotland has assets, talent and infrastructure which can collectively create a strong tech economy. Techscaler is a vital part of that infrastructure; supported by many great partners like ScotlandIS, we are working to help create more startups, and supporting the increasing numbers of scaleups to help them achieve their high growth potential. This survey is a valuable tool as we collectively navigate towards a better future for Scotland."