By Polly Purvis, chief executive of ScotlandIS

OVER the last 10 years, the digital technologies industry has been one of the fastest growing sectors of the Scottish economy. Now generating £6bn in GVA annually, it supports the digital transformation of all aspects of the economy and creates innovative new products and services that are shaping all our futures. In the current uncertain outlook, it’s reassuring that this growth is continuing, and the sector is optimistic about the future.

Today we’re releasing the results of our annual Scottish Technology Industry Survey. The report takes the pulse of this dynamic sector, explores its performance and seeks to understand how it is evolving and, crucially, allows us to support and address its needs.

The good news is that the technology sector as a whole is in fine fettle and firmly in growth mode. That is no mean feat given the context of fierce international competition for top talent and ongoing political uncertainty.

2018 proved to be a great year for many technology businesses, with the share of companies reporting increased sales up from 68 per cent to 75 per cent, and those with improved profit margins up from 47 per cent to 51 per cent.

With a wide range of end markets, tech companies sell both within the UK and overseas, generating £3.3bn in annual export earnings. The survey highlights that 53 per cent of businesses responding already sell internationally and a further 19 per cent are planning to. However, there are signs that the debate on Brexit and international trade may be stifling export growth as the proportion of companies with no plans to export has grown from 19 per cent to 29 per cent over the past year.

Looking forward, more than 70 per cent of respondents are optimistic about their prospects in 2019, with 83 per cent expecting to grow sales income over the year. Ours is a fast-moving industry and there are always new trends and challenges. Over the years we’ve seen the growth of mobile, ecommerce, and cloud and now companies anticipate the greatest opportunities over the next 18 months will be in delivering solutions in the areas of artificial intelligence and machine learning (46 per cent), followed by data analytics (45 per cent) and the Internet of Things (29 per cent). There is also a growing demand for cyber security solutions as threat levels increase.

This strong growth brings its own challenges; with 81 per cent of this year’s survey respondents expecting to take on new team members, it’s not surprising staff recruitment and retention remains a key issue and one of the top three challenges for 2019.

ScotlandIS continues to support the sector through a variety of initiatives to broaden the talent pool, and raise employers’ awareness of available options including our regular “Sourcing the next generation of talent” events, student placements through our ePlacement Scotland programme, the digital skills academy CodeClan, apprenticeships and our work with academic teaching staff through the Digital Skills Partnership to empower students with experience of up to date working practices.

Given data-driven innovation and cyber security are clearly areas of significant opportunity for our industry, with support from Scottish Enterprise we are creating new cluster teams dedicated to working with our members in the areas of data and cyber security.

As technology products and solutions increasingly permeate all parts of the economy, underpinning increased productivity and enabling innovation, the excitement around Scotland’s digital technologies industry is palpable, with Glasgow and Edinburgh both featuring in the top five cities in the UK for the creative and tech industries. With the potential to solve major challenges in health and social care, environmental sustainability, poverty and inclusion, as well as more traditional industries such as financial services, manufacturing and energy,the opportunities are endless.