Scotland's growing role in the UK tech ecosystem

Scotland's growing role in the UK tech ecosystem

Technology is growing rapidly and is an industry that affects everyone in their everyday lives. Whether it’s ordering a coffee, booking a GP appointment, tracking steps and sleep, or arranging a food shop to be delivered, technology is embedded in almost every stage of service delivery.

The Tech Nation Report 2025 (the "Tech Nation Report") has recently been published (the full version of which can be found here) and underlines just how embedded the technology industry has become across sectors—from healthcare, transport, education, and finance to food and drink—shaping how these industries operate, compete, and grow. The report also highlighted how Scotland is gaining momentum as a key technology hub. MFMac were delighted to have recently hosted the opening of Glasgow Tech Week with a Technology Licensing Masterclass. The Glasgow Tech Week event was a great success, and it was wonderful to see the depth and breadth of growth and innovation among Scottish tech businesses.

This article summarises some key highlights from the Tech Nation Report and news relevant to the Scottish tech industry, as well as some of the sector’s strengths and challenges.

Highlights

1. UK tech valuation hits $1.2 trillion

   The Tech Nation Report highlighted the increasing value of the UK tech ecosystem, now valued at $1.2 trillion—leading Europe. London continues to dominate, accounting for 59% of that value, but Scotland stood out as one of the fastest-growing regions, alongside the East Midlands and North East.
   In the first half of 2025, UK tech startups raised more than $7 billion, including one of the largest first-quarter fundraises in the past three years.

2. Scotland home to three unicorns

   The UK has produced 163 startup companies valued at over $1 billion, with 90% of those staying and scaling in the UK. Fittingly, the unicorn is also Scotland’s national animal—and the country is home to three tech unicorns: Smart Metering Systems Limited, BrewDog, and Skyscanner.

3. AI investment boom

   Across the UK, AI startups raised over $1 billion in the first half of 2025, with £4.3 billion raised in total during 2024—accounting for around 27% of venture capital (VC) investment.
   Scotland is growing rapidly in this space, home to 112 AI startups with a 35% compound annual growth rate (CAGR), although funding remains significantly lower than in other UK tech hubs.

4. Supercomputing infrastructure

   The UK Government has reinstated a £750 million investment in an exascale supercomputer at the University of Edinburgh’s £31 million Advanced Computing Facility. This aims to place the University, Edinburgh, and Scotland more broadly at the centre of the UK’s efforts to drive technological innovation and AI adoption.

5. Policy action: Scottish Technology Council

   The Scottish Government has announced the formation of a new Scottish Technology Council to help shape policy, connect businesses with government, and promote Scottish tech companies internationally.
   Council members include industry leaders and academics with experience across international markets, including health and life sciences, financial services, data and AI, advanced manufacturing, and space.
   This complements the new Scotland’s Critical Technologies Supercluster advisory board, a collaboration between the Scottish Government, Scottish Enterprise, Technology Scotland, and the Universities of Glasgow and Strathclyde. The board aims to grow revenues in the technology supercluster by £10 billion by 2035 and create 6,000 jobs.

6. Emerging challenges: scale and talent

   The Tech Nation Report identified access to capital as the number one barrier to growth for UK tech businesses. This has led to talent shortages, difficulties in scaling operations, and in some cases, relocation to other regions.

Strengths and challenges of the Scottish tech industry

Strengths

• Rising regional valuation and momentum in AI startups
• Strong talent and cost-effective tech workforce
• Active public–private collaboration

Challenges

• Fewer unicorns compared to other UK regions
• Limited access to growth capital
• Need for enhanced scaling support

Future growth

To sustain the exponential growth of the UK tech industry, the Tech Nation Report recommends broader access to funding at both government and VC levels, greater emphasis on retaining talent and businesses within the UK, modernisation of the Enterprise Management Incentive Scheme, and ensuring the UK remains a top destination for startup growth.