Top 10 technology driven sectors in Scotland (part 1)

It’s no secret that Scotland has a rich history when it comes to technology and innovation. From the first telephone invented by Alexander Graham Bell, to the lifesaving invention of penicillin discovered by Sir Alexander Fleming, it’s fair to say that when it comes to technological and scientific innovation, Scotland punches well above it’s weight. As new technologies redefine and transform the Scottish industrial landscape, the emphasis on businesses to adopt new technologies to elicit commercial transformation has never been greater. This blog is the first in a two part series, looking at the top 10 technology driven sectors in Scotland. We’ll focus on the energy and low carbon sector, financial and business services, food and drink, life sciences and sustainable construction. Over the next few months we’ll do a deeper dive on each sector and explore the economic makeup of each industry, establishing the role of technological innovation within each area (we’ll cover tourism, public sector, technology, creative industries and advanced engineering in part two of the blog) .

New technological innovations are fundamentally transforming the way we interact, live, transact and communicate, which in turn has a profound influence on overall economic development. In order to promote technological advancement, Scotland must invest in quality education for young people and provide continuous developmental training for managers and employees. Technology represents a key driver to economic growth, purely because technological advancements underpin economic growth and innovations in infrastructure, healthcare systems and education.

The Scottish Economic Landscape

In March 2015 there were a total of 361,345 private sector enterprises (i.e. different companies) throughout the whole of Scotland, with 359,050 of these companies being classified as SME’s. The Scottish Government estimated that between March 2014 and March 2015, that the number of private enterprises in Scotland increased by nearly 8%, symbolising the formation of 26,090 new companies. What’s truly astonishing is that large enterprises (companies with more than 250 employees) accounted for almost 45% of all private sector employment and more than 60% of all private sector turnover. This means that whilst SME’s represent 99.4% of all companies in Scotland, it’s large companies that create the greatest number of jobs and contribution to national turnover.

Energy & low carbon technologies

The energy and low carbon technologies sector in Scotland consists of the low carbon industries, renewables, thermal generation, environmental activity and oil and gas. There are currently over 2000 companies active in the oil and gas sectors, ranging in size from global multinationals to an extremely highly regarded and increasingly innovative base of SME’s. There are over 200 companies active in thermal generation, more than 3,500 active companies in renewables (and low carbon electricity) and another 4000 companies actively involved in low carbon heat (and energy from waste) and others providing low carbon and energy efficiency goods and services.

The Climate Change (Scotland) Act 2009 has created an ambitious set of targets that involve creating an 80% reduction in greenhouse gas emissions by the year 2050. It’s envisaged that that the vast majority of this reduction will be driven by decarbonising Scotland’s electricity supply, with new technological innovations playing a crucial role in this process. At present Scotland’s electricity supply comes from a variety of different sources (we’ll explore this in more detail in a future blog) and in order for the makeup of these electricity sources to change, there will be a requirement for significant technological advancement, particularly when it comes to innovations in the mobile space. The Skills Investment Plan for Energy also suggests that there will be the creation of over 40,000 new jobs in electricity generation and renewable heat as soon as 2020. The goal will be to utilise technological innovations (tidal power, wave, solar, wind, hydroelectricity, radiant energy, geothermal, biomass etc) to amplify renewable energy output and redefine the way electricity is sourced, supplied and consumed.

Waracle have just recently started working with Scottish Power on their very impressive mobile, IoT and technology strategies.

Financial and Business Services

In 2014 the financial and business services sector in Scotland employed an estimated 226,500 people (86,300 people in financial services and 140,200 in the business services sector). As it stands, Scotland is currently internationally recognised as one of the most comprehensive financial nerve-centre in the UK (apart from London and the South East). Some of the biggest financial and business services companies in the world have operations centres located in Scotland including Aberdeen Asset Management, BNP Paribas, CitiGroup, Alliance Trust, Lloyds Banking Group, Royal Bank of Scotland, Tesco Bank, JP Morgan (to name but a few).

FinTech (short form for financial technology) companies are characterised as businesses who offer digital lending, money transfer, and credit ratings or retail-payment services. We recently explored the 7 key mobile trends in financial services and as new technologies continue to emerge and disrupt old business models, the financial and business services sector will need to continue to innovate. One of the major challenges for financial and business service sector companies in Scotland is accessing the right mobile development capability in order to bring innovative new products and services to market.

2016 saw the launch of two significant new entrants to the digital banking market: Atom claims to be the UK’s first bank exclusively for mobile and B is a new mobile app launched by Clydesdale and Yorkshire Bank (developed by Waracle).

Food & Drink

Scotland’s food and drink sector makes a significant contribution to the national economy in terms of job creation (nearly 120,000 jobs) and turnover (nearly £15 billion). In the past eight years the food and drink sector in Scotland has undergone significant growth, with an estimated turnover increase of 25% between 2008 and 2016.

As the food and drink sector in Scotland moves towards increasing international trade, the requirement for localised technology will play a crucial role. Understanding localised buying patterns and behaviours will be essential and developing technology platforms, particularly when it comes to mobile, enabling Scottish food and drink companies to compete on an international stage. One great example of this is the mobile responsive, fully localised e-commerce platform developed for Highland Park (see also Famous Grouse, Cutty Sark and the Edrington group). Other emerging trends in the food and drink market include the need to reduce food wastage and (check out this food wastage app developed in conjunction with the Scottish Government and Zero waste Scotland) the ‘gourmet convenience’ trend.

Life Sciences and healthcare

Scotland, and in fact our home city of Dundee, possesses one of the most vibrant life sciences and healthcare sectors in the whole of Europe.The main sub-sectors driving this growth are medical technologies and pharmaceutical services and Scotland now sits at the cutting edge of research in animal health, precision based medicine and medical technologies. In 2016, some of the emerging sub-sectors driving increased growth through technological innovation are connected healthcare, agritech (aquaculture and crop research) and industrial biotechnology. Innovations within connected digital healthcare have largely been driven by advancements in mobile technology and particularly wearables.

The global digital healthcare and life sciences landscape is now undergoing significant transformation as new technologies are adopted in a mainstream environment. New technologies enable patients and sufferers of chronic devices to analyse data in order to make informed decisions in relation to their own personal healthcare. Wearable technology is creating a culture of patient empowerment and big pharma companies are starting to realise the potential of new devices in relation to life sciences and patient wellbeing. Wearable technology is helping to improve relationships between patients, GP’s and clinicians/physicians and actively improve the quality of patient healthcare.

Sustainable Construction

The construction sector in Scotland encompasses a range of sub-sectors including materials producers (concrete, timber, aggregates), specialist contractors, architecture and project management/engineering knowledge. There are more than 31,000 businesses represented within the Scottish construction sector employing more than 170,000 people, but with the UK leaving the EU, the sector is now experiencing a period of uncertainty. As a result of Brexit, the construction sector is likely to be supported by the announcement of an extra £100 million being made available to enable infrastructure development projects throughout Scotland.

Sustainable construction and low carbon technological innovations are now vitally important to the future of the Scottish economy and in terms of meeting the country’s ambitious carbon reduction targets. Construction Scotland recently launched an innovation centre that focuses on delivering expertise to accelerate the development of new construction focused systems, services and products.

Conclusion

Innovation, technology and science play a crucial role when it comes to increasing Scotland’s competitiveness on an international stage. Each of these economic drivers plays its own unique role in enhancing Scotland’s performance in today’s global, knowledge based economy. If you’re a business working in energy and low carbon technologies, financial and business services, food and drink, life sciences or sustainable construction, and seeking new ways to innovate through technology, contact Waracle today to start the conversation.


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