New research findings suggest that while the proportion of technology-based firms in the Scottish economy is slightly lower than might be expected, technology companies are more likely to achieve rapid growth compared to non-technology firms.
The research into 'Technology-Based Firms in Scotland' found that the three main barriers to achieving this high growth are:
- Over-emphasis on R&D-led technology and limited commercial focus
- Financial challenges associated with product life cycles
- Challenges of developing a customer base from the early adopter market to the mass market
The report also highlights some key findings around the characteristics of a high growth technology firm, which could help enterprise agencies offer more tailored support in the future:
- High levels of entrepreneurial talent and leadership among the founders, industry-relevant experience, strong opportunity-driven motivation and high levels of entrepreneurial orientation and ambition
- A large varied senior management team, venture capital backing and a strong export attitude
- 'Product-as-service' business models, offering solutions rather than single products, with a strong sales and marketing focus and strong customer end-user engagement
We already work with technology firms through our commercialisation teams and high-growth start up unit, and going forward the results of this latest research will help to inform this activity.
Kenny Richmond, director of Economics at Scottish Enterprise, commented, "What the research is telling us is that we need to create and grow more technology companies in Scotland. Technology firms are more likely to achieve high growth so if we can increase the number of technology companies in Scotland, we can increase the number of high growth firms overall.
"The research also shows that even though Scotland has a relatively small number of technology companies historically, we’re better than many other UK regions at ‘converting’ these high tech businesses into high growth companies. If we raise the number of technology companies, and help more of them to grow rapidly, we can ultimately strengthen our economy."
Dr Ross Brown of Scottish Enterprise and co-author of the research said: "We recognise that there are clear challenges for technology businesses to overcome to achieve high growth. However, there are definitely opportunities for technology-led firms to contribute to Scotland's high growth business landscape. And we know that this growth is achievable, by looking at successful technology companies such as Amor Group, Calnex Solutions and Touch Bionics to name just a few.
"We have a great foundation in Scotland's energy industry, particularly oil and gas, both as a direct source of technology businesses and also as a major market for such companies. If we can encourage more companies in other sectors to emulate this entrepreneurial dynamism, we will see more high growth technology companies created as a result.
"The findings also reinforce our continuing focus on supporting opportunities for company growth, regardless of where these opportunities lie. We will be looking at these findings in more detail to see how we can further tailor our support for customers."
The research was undertaken in partnership between Scottish Enterprise and the Universities of Aston and Strathclyde.
Read the 'Technology-Based Firms in Scotland' report