The number of new Scottish technology incorporations dropped 9% in the first quarter of 2025 compared to last year, according to new analysis from audit, tax, and consulting firm RSM UK.

RSM’s analysis shows that a total of 405 new tech firms were incorporated in Q1 2025, while the figure for Q1 2024 was 445.

That said, most UK regions saw a decrease, and Scotland’s fall of 9% beats the UK as a whole’s average.

Across all of the UK’s regions, tech incorporations decreased by 12% year-on-year. In Q1 2025, the figure was 12,184 in total, while it was 13,801 for the same period last year.

Further, despite the year-on-year decline, the number of incorporations have increased quarter-on-quarter for both Scotland and at the UK level.

Scotland saw a positive 9% quarter-on-quarter change, with 405 new tech incorporations in Q1 2025, compared to 371 in Q4 2024.

Meanwhile, the UK as a whole saw a quarter-on-quarter increase of 10%, considering that Q4 2024 saw 11,031 tech incorporations, while Q1 2025’s number was 12,184.

“Despite new tech incorporations falling year-on-year, it’s encouraging to see some growth quarter-on-quarter, after declining for three consecutive quarters,” said Ben Bilsland, partner and head of technology industry at RSM UK.

“Economic uncertainty has taken hold in the tech sector, with business leaders being increasingly cautious about making investment and recruitment decisions.

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“The complexity around tariffs causes disruption for the technology sector. The recent news around Apple delaying iPhone shipments intended for the US market is a high profile example. Many tech companies are reviewing their supply chains as they look to move hardware or equipment from one country to the next,” Bilsland added.

“The US government has indicated they will look for concessions from the UK around digital taxes and their own tech sector as they look to negotiate a trade deal. It is unclear what the consequences will be for UK tech yet, but the sector will be watching closely for decisions that either stifle or encourage growth of homegrown companies.

“The technology industry has a big part to play in the government’s growth agenda, but it cannot do this without the necessary resources. What’s needed is urgent action from the government, including clarity around support and policies that cultivate growth.”