Scotland’s tech sector sees company start-ups hit record high

New analysis has found a total of 507 technology businesses were incorporated north of the Border in the second quarter of 2025, up 15 per cent from the same period last year. The number of tech incorporations also rose quarter-on-quarter, by 25 per cent, from 405 during the first quarter of 2025.

Audit, tax and consulting firm RSM UK, which conducted the research, noted that all areas of the UK were up on last year, with nine out of the 12 regions monitored recording the highest number of new tech incorporations since 2019, prior to the Covid-19 pandemic.

Will Simpson, head of technology for RSM in Scotland, said: “This surprising jump in new tech incorporations to a record high suggests that, despite numerous headwinds, tech entrepreneurs and business leaders in Scotland have realised uncertainty may be the new norm, therefore they need to invest and innovate through the headwinds.

“Scotland is emerging as a potential leader in data science and artificial intelligence, with our world class universities creating innovators in computing and data science, engineering, cyber and AI. Long standing challenges remain however, with many early-stage promising businesses struggling to scale domestically and globally, largely due to the lack of funding firepower needed to onboard a team with the capability to drive commercial scale.

“The innovation and potential coming from Scotland’s start-ups is incredible, and the tech sector in the country could be a significant driver of growth, if the ecosystem can crack the long-standing scaling conundrum,” he added.

Ben Bilsland, partner and head of technology industry at RSM UK, said the increasing pressures on the UK government to address gaps in its budget would leave the tech industry “feeling nervous about what tax measures might be introduced”.

He said: “Changes to capital gains tax will make business founders and investors cautious, with a direct impact on investment and exit decisions. Any changes around the research and development scheme would likely send shockwaves through the tech industry, stifling innovation and growth.

“If income tax is raised, a greater tax burden on higher earners could also exacerbate workforce issues in the tech industry. Skilled workers are in high demand, and increased taxes in the UK might make the extremely competitive salaries available overseas even more appealing.

“UK tech faces fierce competition on all fronts from other countries,” he added. “The government will need to tread carefully to ensure the UK remains one of the best places in the world to start and grow a tech company, as the exit of our brightest businesses and talent overseas could cause long-lasting harm to the economy.”

The report found that UK-wide there were 14,262 tech company incorporations during the second quarter of this year. That is 16 per cent up on the same period in 2024 and 17 per cent higher than the opening three months of 2025.

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