And so begin a million nervous and excited conversations around the world; people looking to defy the odds in the hope that their idea will somehow be the one to make it big. Whilst no-one necessarily expects to be the next Zuckerberg or Musk, in this internet age everyone knows a ‘friend of a friend’ that’s managed to make their millions by selling a business. All it takes is the kernel of an idea, some good technology or some valuable data (hopefully all three). Not to mention being in the right place at the right time with a little bit of good luck.

If you’re living in Scotland and having these entrepreneurial thoughts then what is the answer to the question above – where do we go from here – and is Scotland going to be a help or hindrance to your start-up ambitions?

Starting Up In Scotland?

I recently returned to live and work in Scotland and was unsure what I would find in terms of the start-up scene. In a short space of time I’ve been bowled over by the creativity, enthusiasm and successes I have encountered. Admittedly, I had naively thought that away from the tech hubs of San Francisco, London and Berlin that things might be somewhat less vibrant – but it’s been a lovely surprise to see just how wrong I was. On the contrary, I am coming around to the view that starting out in Scotland is no bad place to test your idea and launch a business.

The ‘small country syndrome’ is often levelled at the Scots in a pejorative sense, but I can see some key advantages in this context. The maturity and the relative small-scale of the Scottish economy provides a rich community of resources for the budding entrepreneur. Equally, the smaller pool of activity means that only the truly committed prevail, start-up surfing is not an option for anyone in the Scottish scene like it might be in Silicon Valley or London.

One of the key strengths of the Scottish economy is its finance sector.  Whilst this has provided a focus for a burgeoning Fintech community, particularly in Edinburgh, the presence of a knowledgeable and mature investment community also provides many advantages. This is not just through proximity, but connectedness to the global finance ecosystem. Iqbal Bedi, a Glasgow-based entrepreneur and business advisor points to Scotland’s substantial “body of well-connected investors” as a reason to be encouraged to start your business here. Despite sluggish economic growth, there is investment liquidity and an appetite to seek higher returns – and new tech is absolutely part of that story.

Small-Tech

Indeed, private sector profits have been seeking a home, particularly among larger enterprise, and this has led to a great acceleration of interest in what ‘small-tech’ can do. Blinded by the light and expense of the corporate IT behemoths, companies are keen to get closer to garage innovations – both as investors and as customers. Take John Lewis’ JLAB or Unilever Foundry programme as examples, with Diageo, Heineken, Sainsbury’s and William Hill also having started similar initiatives.

The Internet of Things is one such area where it makes sense to talk to smaller players with innovative solutions. And Scotland is well placed in this particular space: it has a vibrant community supported by first class academic institutions, investment support and a wealth of entrepreneurs focused on IoT technologies.

It is not just from private enterprise that support is growing; the public sector is also trying to encourage innovative technology companies to expand, while seeking new ways to bridge the gap between bureaucratic procurement and the needs of the citizenry. A number of bodies have been created to lend support, such as Scottish Enterprise, InnovateUK, TechCity, and Scottish Futures Trust.

Public Sector Support

There are signs that these efforts have already delivered results, and you don’t have to look far to find someone that has benefited. Glasgow based start-up, ODRO acknowledges that Scottish Enterprise was highly influential to its early success. CEO, Ryan McCabe said “Scottish Enterprise have been a fantastic help for us – without SE we certainly would not be here today. From financial support, to advice and introductions, this help in the early days was invaluable”. In an era when it’s fashionable to criticise anything the public sector says or does, this is very heartening to hear.

The return of “industrial strategy” seems like an idea from a bygone political age, but the public sector understands very well that it has an important role to play in catalysing the start-up ecosystem. Encouraging technological innovation is critical to Scotland’s economic sustainability, but also a likely source of solutions to its most acute economic and social challenges. Given Scotland’s historic talent for exporting its ideas and people, this seems a more essential source of differentiation than ever.

At a recent British Interactive Media Association (BIMA) in Edinburgh some serious players in the Scottish digital sector emphasised the importance of culture in starting, growing and selling a business. As a returning émigré, I think Scotland has several useful cultural traits that can help it capitalise on the start-up trend. There is a good balance of local and international tendencies.  It provides both a supporting community and a global outlook; a humility that comes with being small, without being cowed by bigger beasts. Put this together with increased local decision making and political enfranchisement and one can begin to see an improving symbiosis that encourages investment in innovation.

Clearly this paints a rose-tinted perspective, particularly given some of the disruptions at our doorstep, most notably Brexit. So perhaps this is not quite a land of magic and unicorns after all, but if you take a look at some of the recent stats there’s no denying the signals are strong.

Digital Economy Growing

The UK has attracted approximately £28 Billion of investment in digital tech investment over the last 5 years, according to Tech City’s Tech Nation 2017 report. That’s about the same as France, Germany and the Netherlands combined over the same period.  In addition, the report shows that the digital economy grew 50% faster than the wider economy in 2015. In Dundee alone, revenues from digital businesses grew by a staggering 171% between 2011-2015 – the highest growth anywhere in the UK. Glasgow’s digital sector contributed ~£600 Million to the local economy, and on average sees the birth of over 330 new digital businesses per year, 20% of which have been classified as “high growth” according to the report. Edinburgh too, sustains over 25,000 digital jobs; has seen an increase of 34% new digital businesses, with revenues growing at 85% over the same four year period. Whilst this is part of a wider UK-led growth story, the indicators within Scotland’s cities is extremely encouraging.

Back at the wine soaked table in the Italian restaurant our interlocutor has thought of two answers to the question “Where do we go from here?” The first plainly describes the need to develop the proposition and business case; some sample technology, some discussions with customers and investors. The second simply says, “We don’t go anywhere, because we have everything we need to succeed right here.”