NEWS | Digital tech at heart of future economy

Digital tech is the go-to sector for fast-growing, innovation-led businesses creating high-skill jobs.

The industry is forecast to grow twice as fast as the rest of the Scottish economy over the next decade. Its significance is enormous because of its high-growth potential, investment in research and innovation, and ability to internationalise at pace with products serving global markets.

North east Scotland’s thriving digital tech sector is already making an impact and is vital to the region’s future economy. Alongside Edinburgh and Glasgow, the region is one of three significant Scottish tech clusters and is well on its way to achieving its growth ambitions.

The 300-plus digital tech businesses in the region range from innovative startups to established companies ambitious to scale internationally and each have average turn over approaching £2 million a year.

Growing the digital tech sector is a priority for private sector economic development driver Opportunity North East (ONE) as part of regional economic diversification. Tech entrepreneur Grant Smith chairs its digital tech board and its members reflect the breadth and depth of the sector. Recent new appointments to the board include Intelligent Plant’s Steve Aitken, Stephen Coleman from CodeBase, Kevin Coll from Solab, Peterson’s Jaye Deighton and The Data Lab’s Brian Hills.

“The sector ambition is to grow a vibrant digital economy in north-east Scotland. To be a global hub for industrial digital with a high-growth company cluster, home to 10 to 20 businesses with a turnover of £20 million-plus and internationalising,” explains ONE CEO Jennifer Craw.

"In four years, the region has gone from 7% of Scotland's digital economy to over 11% - that’s 100 new businesses in the cluster – demonstrating the quality, growth potential and scalability of digital businesses and their products in markets spanning agritech and clean tech to energy tech and health tech. They already provide almost 4,500 high-skill jobs, and realising the sector’s full growth potential will be transformative for this region and its innovation economy.

“Most of the region’s tech businesses are in their startup or growth phases. They are focused on product, market fit, and customer acquisition, scaleup, moving beyond their initial markets, and internationalising. There is a lot of potential for high growth. ONE is focusing its action and investment on making the most significant impact with them. We do this while curating an inclusive tech ecosystem with ONE Tech Hub as its focal point,” explains Jennifer.

ONE Tech Hub, opened by ONE in Aberdeen city centre in 2019, is at the heart of the digital tech ecosystem and home to an ambitious cluster of businesses. It is the place where ONE offers programmes for scaling tech businesses, entrepreneurs, and founders, enabling them to innovate, develop products, markets, and talent, and achieve their growth ambitions.

ONE Tech Hub also provides hotdesking, co-working, and office space. Twenty-one businesses and partners are currently working out of the hub on Schoolhill.

For pre-start and early startup, ONE Tech Hub is the Techscaler hub for north east Scotland – the Scottish Government funded national programme, delivered by CodeBase, to create, develop and scale tech startups. Sector partners, including The Data Lab and Barclays Eagle Labs, are also based in the hub.

ONE has evolved its support to the sector over the years. Karen O’Hanlon, digital tech director at ONE, explains: “We understand our customers—the entrepreneurs, founders and businesses we work with—and their pains and gains. We add value by working with them in cohorts and individually to help them grow at pace, and the hugely exciting thing about digital businesses is the speed at which they can grow.”

The alumni of the digital business growth programme ONE delivers are a prime example. Participants in last year’s programme have already made significant progress, entering new markets at home and abroad, doubling their employee numbers, increasing their revenue by almost 80%, and doubling their customers over the same period. Strong evidence that these businesses are on a high growth trajectory.

“That’s 80 new, high-skills jobs and an additional £15 million in revenue for a cohort of businesses we worked with intensively in the programme,” says Karen. “It demonstrates the pace of growth achievable with impactful support.”

ONE also knows that skills and developing a talent pipeline are critical to supporting the sector’s future in the region. Its graduates into business programme has supported tech companies to recruit and employ 35 graduates to date.

Steve Aitken, Founder of Intelligent Plant, which expanded its team with three new graduates last year, says: “Being part of the programme was hugely valuable to Intelligent Plant. Not only allows the graduates to get training in areas that might otherwise not have been possible - but also helps create links between local companies with the graduates sharing time during the sessions and building trust between local businesses.”

“The workshops were a great way to learn and develop new and existing skills. And most importantly, the networking aspect allowed me to make connections in the digital tech community and build a solid support network,” adds Paul Gowan, Engineer at Intelligent Plant

The EnergyTech Bridge programme, now in its third year, is another example of targeted action supporting growth. Delivered through a partnership of ONE, Barclays Eagle Labs and CodeBase, it brings together startups, small scaleups and established energy businesses to focus on accelerating the transition to cleaner, greener energy through digital tech innovation.

To date, fifteen tech businesses have completed the programme, innovating alongside corporate participants, including Equinor, Petrofac, Proserv, Serica Energy, Wood, and Worley.

Karen O’Hanlon says: “North east Scotland has one of the largest clusters of energy tech businesses in Europe. They increasingly provide tech products and solutions beyond the oil and gas market and respond to opportunities in emerging high-growth sectors such as clean tech, climate tech and renewables. This diversification is essential to the continued growth of the tech cluster here, and its deep energy sector knowledge differentiates it from other digital centres in the UK.”

The pace of development and continuing growth opportunity in the region’s digital sector have attracted national attention and government backing.

Digital tech is at the heart of plans for the North East Scotland Investment Zone, a 10-year, £160 million project announced by the UK and Scottish governments in June 2023 and currently in development.

The investment zone will be a programme of targeted projects and investments, tax reliefs, and other incentives in the region’s chosen priority digital technology and green energy sectors. It will stimulate innovation-led business growth and create high-value jobs.

The regional project partners are developing detailed investment zone proposals for government approval later this year.