The number of technology companies incorporated in Scotland rose by 21% in 2023, new analysis from RSM UK — the audit, tax, and consulting firm — has discovered.

The firm found that a total of 1,553 Scottish tech companies were incorporated last year, compared to 1,280 in 2022 — marking an increase of 273 companies, or 21%.

Across the UK as a whole, last year saw 51,017 new tech firms incorporated, compared to 2022’s figure of 41,972, representing a change of 9,045 companies, or 22%.

Key sub-sectors that saw significant growth included software development companies, data businesses, and IT consultancies.

However, the only UK region that didn’t see an upward, positive change was Wales, which had 1,257 tech company incorporations in 2022 compared to 2023’s 1,150 — a decrease of 107 companies, or -9%.

Speaking on the Scottish stats, Ross Stupart, who’s office managing partner for RSM in Edinburgh, said: “It’s great to see another strong year for incorporations in Scotland, closely reflecting the national average of 22%.

“This demonstrates that Scotland continues to be a place that creates a good volume of tech start-ups. The key challenge for Scotland in the tech sector however remains the ability to scale in Scotland.

“By creating an environment that provides businesses with ready access to capital for rapid upscaling, and encourages their ambition for internationalisation and growth, we should see many of Scotland’s tech start up entrepreneurs fulfilling their huge potential.

“This could help create lots of economic value from Scotland’s tech sector. Some policy changes will be required within the Scottish Government to get us on that track.”

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Ben Bilsland, who’s a partner and technology industry senior analyst at RSM UK, commented on the stats for the UK as a whole: “Our research is testament to the resilience of the UK’s tech sector despite global challenges. The rise in tech incorporations shows there is cause for optimism in this key industry.

“But the sector has, and continues to be, marked by layoffs, so it may be that these members of the workforce have been confident enough to go it alone, thereby fuelling incorporation growth.

“The government has an important role to play if this trend is to continue. Making valuable resources, including AI compute, accessible for universities and early-stage entrepreneurs is critical.

“Funding and policy changes, including innovation reliefs, that ensure a world-class tech workforce are crucial both in terms aiding education and skilled immigration.

“For those businesses working in AI, clarity on future regulation will assist the ability to forward-plan.”