Scotland sees startup growth, but Wales lags behind

Scotland’s technology sector has seen a large growth in startup companies since 2009

Scotland’s technology sector has seen a large growth in startup companies since 2009, suggesting it is growing faster than other regions in the UK outside of London.

Nicknamed Silicon Glen, the region has seen a 32.3% growth in IT startups since 2009, growing from 4,930 to 6,520 tech enterprises.

While London is the UK’s main incubator for tech startups, its percentage growth only just beat Scotland, with a 38.5% jump from 25,085 to 34,750 enterprises.

Accountancy services firm Nixon Williams looked at data from the Office for National Statistics and concluded Silicon Glen has diversified its offering to include software development and services, making it more attractive to startup businesses.

Nixon Williams practice manager Martin Brennan said the tech sector in Scotland was hit hard after the dot-com bubble burst, but has since diversified away from electronics manufacturing.

"Software development and services now account for a much larger share of Silicon Glen’s output, and are typically less capital intensive, meaning that startups can often get off the ground with minimal financing,” he said.

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“Much of the focus in recent years has been on London, specifically Silicon Roundabout, which has emerged as a centre for digital startups, but regions like Scotland are now rivalling London in terms of growth.”

Meanwhile, Wales and the East Midlands only saw growth of 7.3% and 8.8% respectively.

Cardiff Start co-founder Neil Cocker said it was disappointing to see slow growth in Wales from this report.

“However, Cardiff, which is Europe's fastest growing capital city, is demonstrating huge growth in this area and outstripping most other cities across Europe," he said. 

"It's an exciting time here, and we're proud to be a key member of Tech City's Cluster Alliance, which is working hard to make sure that the country as a whole has a strong, vibrant, digital economy."

Nixon Williams suggested tech clusters like Silicon Glen have been overlooked by the UK government, which has supported startups in the form of Tech City in London.

“When you consider that over half of government IT contracts are awarded to businesses based in the south-east and Tech City have a London-centric mandate, you have to wonder whether more could be done to support the UK’s other tech clusters," said Brennan. 

"Despite London enjoying considerable advantages, Silicon Glen has proved to be one of the star performers of the UK’s tech sector over the last five years,” he added.

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