New research has found that 72% of Scottish tech businesses reported increased sales in 2021, reversing the 44% drop seen in 2020.

According to ScotlandIS’s annual Scottish Technology Industry Survey, the largest increase in potential growth opportunities has been seen in cybersecurity, with 31% of Scottish tech businesses seeing it as an opportunity in the year to come.

Other promising fields in which tech businesses are expecting to reap rewards are data analytics, artificial intelligence, and the Internet of Things (IoT).

However, whilst the sector is on a positive trajectory, exports are in decline. Last year saw a 4% reduction in exports to 56%, and one in five Scottish tech businesses have no plans to export this year. Of those planning to export, key markets are Europe (68%), the rest of the UK (77%) and North America (60%).

The survey also found that talent continues to stay in high demand across the industry and with wider impacts of a skills shortage across most sectors, this issue is becoming increasingly challenging for the industry to manage.

Efforts to support businesses on the talent shortage will continue to be a priority this year as it remains one of the top barriers – alongside pandemic recovery – to achieving ambitions in the year ahead.

Karen Meechan, CEO of ScotlandIS, said: “Data gathered from this year’s survey gives clear signals that the tech sector is back in growth mode after weathering initial impacts of the pandemic.

“As it comes to the end of the academic year for many Scottish students, we are pleased to see how many organisations across the sector are planning to recruit graduates, but the year ahead will require continued collaboration across industry, academia, and our education system to build a pipeline of talent within Scotland. We’ll continue to do as much as we can to support that.”

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Economy Secretary Kate Forbes said: “It is encouraging to see more technology businesses in Scotland reporting increased sales, in line with the return to pre-pandemic retail sales levels more generally.

“We want to establish Scotland as one of Europe’s leading start-up economies – that is why the Scottish Government is committed to the most radical reforms of the Scottish entrepreneurial system since devolution.

“A key ambition in our strategy to transform the economy is to establish Scotland as a world-class entrepreneurial country, founded on a culture that encourages, promotes and celebrates entrepreneurial activity.”

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