SCOTTISH technology firms are at a higher risk of insolvency than those across the UK, new research has warned.

Just over half of all technology and IT companies in Scotland are at a higher than average risk of insolvency in the next 12 months, according to research from insolvency and restructuring trade body R3.

It found that 50.1%, or 5,600, of IT companies in Scotland are in the negative band. This is a steep rise from June last year, when a third were judged to be at higher than average risk. It is also higher than the UK overall where 47.9% of companies in the tech sector fell into the negative band this year, up from 33.6% last June.

Nearly 79,000 of all the 232,000 businesses registered in Scotland fell into the negative band in June, meaning one in three are judged to be at greater than usual risk of insolvency within the next year. But this is better than the UK as a whole where two in five companies fall into the high risk category.

R3 said the picture was brighter for transport and haulage businesses in Scotland, where 35.1% of companies fell into the negative band, and for construction on 40.8%. It said that for both those notoriously volatile sectors, Scotland’s proportion of companies deemed at greater than usual risk was lower than for the UK overall.

Tim Cooper, chair of R3 in Scotland and a partner at Addleshaw Goddard in Edinburgh, said: “Although R3’s research indicates that a high proportion of Scottish tech firms are at greater than normal risk, there’s no need for panic in the Silicon Glen.”

He said Scotland’s tech scene is supported by a network of world-class universities, providing a ready supply of qualified and talented graduates. He added that the country’s strength in financial services means entrepreneurs need not uproot themselves to access funding.