Scottish IT businesses ‘cautiously optimistic’ about 2010

February 28, 2010 by Nick Clayton · 1 Comment

scotlandis logo Initial figures from the annual Scottish Technology Industry Survey show 72 per cent of respondents are optimistic or very optimistic about the outlook for 2010. An even greater proportion, 78 per cent, expect sales to grow and just 10 per cent predict their sales will decline.

Last year’s survey showed 44 per cent were positive about their prospects which was a high figure compared to the dire predictions then coming most UK industries. “We were surprised, but now we know their forecasts in terms of sales weren’t that far off,” explained Polly Purvis, executive director of technology trade body ScotlandIS which commissioned the survey with 9-20recruitment.

The information and communication technology (ICT) businesses that are doing best according to Purvis are those that are able to show they can quickly cut clients’ costs. “If you can show a quick return on investment customers will buy into that,” she said.

More detailed analysis of the survey shows ICT companies in Scotland are also trimming their own costs hard. “In the first six months of last year we saw companies of all sizes asking: ‘Is this meeting really necessary?’ The move to teleconferencing, virtual meetings and conference calls is now very much business as usual,” she said.

Website and e-commerce developers are also upbeat as companies realise they have to have a presence on the internet. “There have been some great success stories, but I still think Scotland’s been a bit slow at getting its business online,” she said.

The weakness of sterling has tended to help businesses involved in exports by making them more competitive. That’s been tempered a little by the poor financial state of some export markets although Middle East sales appear to have held up and specialists in areas such as healthcare have continued to increase sales to America.

There are still some areas where Scottish ICT businesses are struggling because spending by their customers has stayed low. Financial services expenditure is predicted to recover a little in 2010. “I personally don’t think financial services will ever come back to being the big spenders they used to be because quite a lot of their expenditure decisions will be being made from other parts of the UK,” said Purvis.

“But over all I think we can say from the survey that the Scottish ICT industry is cautiously optimistic about 2010, but it’s also aware that the recovery is very fragile,” she said.