Scotland’s technology sector is entering 2026 with a cautiously positive outlook, as companies balance steady growth opportunities with economic and regulatory pressures, according to new research from ScotlandIS.

The tech body’s Scottish Technology Industry Survey 2026 shows that the majority (71%) of Scottish tech businesses are optimistic about their outlook this year, a slight dip from previous years – 73% in 2025 and 80% in 2024 – with an increasingly challenging operating landscape resulting in a more cautious outlook after years of strong confidence.

However, despite a softening in headline optimism, the broader results point to solid underlying pipelines and improved financial stability. More than half (58%) of Scottish tech firms reported rising sales last year, while 84% expect to see sales growth in 2026. 

Cashflow pressures have also eased, with 36% of businesses reporting improvement and only 11% experiencing substantial difficulties, down from 16% in 2024.

Examining anticipated growth more closely, expectations remain strong across most customer sectors, particularly in the case of energy & utilities, financial services, and healthcare & pharmaceuticals, which ScotlandIS said reflects growing demand for digital technology support in highly regulated and data-intensive industries.

In terms of technology, AI continues to act as a driver of innovation and growth, with almost all Scottish businesses using the technology in some form and more than half (59%) still identifying AI and ML as critical opportunities for 2026, though that figure has fallen from 69% last year.

Full adoption has doubled to 18%, while only 2% report no use at all, compared to 10% in last year’s survey, with businesses planning to expand deployment across multiple functions over the next year, with the strongest growth in product development (56%), marketing (55%), and R&D (48%).

However, despite those ambitions, demand for AI/ML skills remains on par with 2025, with those reporting a high requirement for these skills rising to 36%, up from 26% last year, evidence of a growing skills gap.

The survey found that while commercial and cyber skills remain in high demand, the need for traditional IT, data, and cloud expertise is slipping slightly, signalling a shift toward more advanced digital capabilities and commercially driven roles as firms chase growth and innovation.

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In terms of growth opportunities, although AI and ML (59%), data analytics (36%) and cybersecurity (36%) remain key focus areas, slightly lower levels of interest – alongside reduced enthusiasm for cloud and IoT – suggest a maturing market and more targeted innovation strategies.

“It’s encouraging to see optimism holding across Scotland’s tech sector, even as confidence levels ease slightly. The fundamentals are strong – businesses are growing, investing and continuing to innovate,” said Karen Meechan, CEO at ScotlandIS.

“Of course, the outlook is not without its challenges. Companies are operating in a tougher, more complex environment, and that’s clearly shaping how they approach growth. But crucially, it doesn’t seem to be stalling it.

“In terms of practising what we preach, AI has a big role to play in this. One of the most significant shifts we’re seeing is the move from simple adoption to using the technology in ways that deliver real impact. I believe our businesses can be true innovators in this space.”