Scotland's Technology Council 2025-26 Report
Scotland’s Technology Council was established in May 2025, tasked with guiding the nation’s tech-driven economic ambitions and future. This is the Council’s first report and sets out Vision 2035: Scotland’s Next Horizon, which aims to position Scotland for global leadership in technology.
Challenges, Barriers, and Limitations
The Council has identified several challenges, barriers, and limitations.
Talent: Speed and Agility as the Primary Constraint
The core challenge for Scotland’s scaling companies is not the availability of talent, but the speed and flexibility with which they can access it.
Key barriers include:
- Immigration processes that operate on timelines misaligned with the rapid hiring cycles required by scale‑ups.
- A limited pool of “second time” scale leaders with experience operating at global growth velocity.
- A persistent mismatch between educational outputs and the evolving technical capabilities demanded by high-growth sectors.
Leadership Capacity: Keeping Pace with Company Growth
Many companies experience growth stalls when leadership capability fails to scale alongside revenues and organisational complexity.
Underlying frictions include:
- Insufficient access to globally experienced executives with a track record in scaling businesses.
- A lack of structured pathways that enable founders to transition roles without relinquishing strategic control.
- Thin peer networks for companies operating in the £50m–£500m revenue range, limiting access to shared experience and operator level insight.
Markets: Procurement as a Barrier, Not a Catalyst
Public procurement processes frequently impede early commercial traction instead of enabling it.
Key constraints include:
- Risk frameworks that inadvertently exclude innovative SMEs.
- Requirements for proof-of-scale that are disproportionate to a first contract environment.
- Fragmented procurement structures, resulting in duplicated compliance and inconsistent buyer expectations.
Finance: Capital Timing, Scale, and Alignment
While capital is available, it often fails to arrive at the pace or scale required for competitive growth.
Challenges include:
- A critical growth capital gap between Series B and pre-IPO stages.
- Conservative institutional investment mandates that limit participation in emerging technology opportunities.
- Concerns over dilution and control, which can drive some founders to relocate operations to more favourable funding environments.
Systemic Fragmentation Across the Support Landscape
A cross‑cutting issue underlying all four frictions is structural fragmentation.
Examples include:
- Overlapping public agencies and unclear accountability for scale-up outcomes.
- Multiple, uncoordinated entry points to support, with no single owner of the scale-up journey.
- A high administrative burden for founders navigating available programmes, reducing focus and momentum.
Additional Strategic Considerations
- Greater use of “Buy Scottish” procurement levers could stimulate early domestic demand for Scottish innovation.
- Increased emphasis on international scaling, including proposals for an enhanced presence in global innovation hubs such as Silicon Valley.
- A stronger national focus on commercialising university research and NHS data, including the need to address intellectual property barriers that slow venture creation.
- Recognition that high energy costs in Scotland remain a material constraint on competitiveness and long-term economic growth.
Contact
Email: innovation@gov.scot