Scotland sees slower growth in tech startups

Scotland’s technology startup rate lagged in ninth place out of 12 UK nations and regions in the third quarter of the year.

New figures show a 26% rise in incorporations in Scotland to 471 from 375 in the corresponding quarter last year. The figure was down 7% on the second quarter which produced 507 new companies.

The Q3 figure was well short of the 141% jump in Wales, 51% in the West Midlands and 41% in the North West.

Only the south east and Yorkshire and Humber (both 21%) and Northern Ireland (6%) produced a lower number of new firms than Scotland.

Audit, tax and consulting firm RSM UK insisted the overall trend is of strong growth.

Head of technology for RSM in Scotland, Will Simpson said: “With worries over how the UK government will address gaps in the budget, it’s now more important than ever that the UK and Scottish governments work to develop a healthy ecosystem, where innovative tech companies are nurtured, not only at early incorporation, but also as they look to scale.

“The tech sector has the capability to become a huge driver of economic growth, and with the right government support, Scotland would be ideally placed to benefit, with its world-class universities driving a skilled future workforce for the sector.”

Nationally, RSM’s analysis found a total of 15,470 new tech companies were incorporated in Q3 2025, jumping 36% from 11,368 in the same quarter last year. The number of tech incorporations also rose by 8% compared to Q2 this year, up from 14,262.

Ben Bilsland, partner and head of technology industry at RSM UK, said: “UK tech is showing resilience, with quarterly tech incorporations reaching another record high despite broader business confidence remaining subdued.

“The continued momentum in the UK’s booming tech ecosystem of high growth, successful companies will further reinforce the country’s position as a global leader in tech.

“Q4 may see further growth in the wake of positive messaging from the UK government on the tech sector and the US-UK Tech Prosperity Deal announced during the US President’s recent visit.

“This deal pointed to deep investment in AI, civil nuclear energy, quantum technologies and further frontier innovations. Leading US tech companies made multi-billion figure promises of investment into the UK as their CEO’s praised the UK’s tech ecosystem.

“Looking ahead, the government must address roadblocks to ensure growth of these tech companies isn’t stifled. Funding is crucial, alongside access to the right talent and skills, and a regulatory environment that balances innovation with protection.”

Number of new technology company incorporations – year-on-year comparison

Number of new technology company incorporations – quarter-on-quarter comparison