Innovation and technology are at the core of a dynamic and growing cluster of scaling businesses across the north-east.
Around 300 firms across the sector – part of Scotland’s “third tech cluster” – are contributing an estimated £371 million a year to the region’s economy and employing more than 7,000 professionals.
They are working on bold solutions that capitalise on the region’s existing strengths and emerging technologies to address global challenges, including climate change, sustainable food production and health.
Founders have different pains, challenges and ambitions at different growth stages.”
Karen O’Hanlon, director, One Digital Tech
At the launch of the newly created Department for Science, Innovation and Technology, which aims to make the UK a tech superpower, Secretary of State Michelle Donelan said progress would be driven by Britain’s boldest businesses.
And a recent Scottish Government report, Building a New Scotland, predicted technology will be the second fastest growing sector north of the border by 2029.
Technology businesses are expected to grow 1.5 times faster than the overall economy.
‘Truly promising’ pipeline
The north-east is fortunate to have such a strong cluster of technology businesses with the potential to scale.
Economic development partnership Opportunity North East (One) is leading activity to create an environment and community for even more founders of digital technology businesses to meet, share, learn, innovate and grow together.
Karen O’Hanlon, director for One’s digital technology operation said the pipeline for early stage tech start-ups “looks truly promising”.
This is in no small part down to the new Tech Scaler Hub in One Tech Hub, in Aberdeen, and other accelerator programmes focused on early stage start-ups in the region, she said.
She added: “The key is to harness and maximise the opportunity and investment in the start-up pipeline to grow the tech sector. We know founders post start-up and in the growth phase value sharing and learning together with and from similar businesses.
“In 2021 the One Digital Tech Business Growth Programme (BGP) was launched to bring together established businesses with high growth ambitions and the potential to scale rapidly.
“Founders have different pains, challenges and ambitions at different growth stages.
“At the early stage, the focus is on creating a minimal viable product and understanding the customer and product market fit.
“In contrast, the focus for later stage founders is on strategies for growth, leadership, team building, culture and critical decisions around funding and investment to grow.
“Connecting them with expertise relevant to their growth stage and a supportive peer community is vital.”
Excellent role models
Businesses taking part in the 2022-23 programme have already made significant progress – entering new markets at home and abroad.
According to One, they have also achieved a 50% increase in new customers and 20% jump in revenue, while doubling the number of jobs – strong evidence they are on a high growth trajectory.
It is successes like these that help raise the region’s profile in the UK and internationally.
They also provide excellent role models for the next generation of technology startups.
From Aberdeen to the world
Take Aberdeen company Solab, for example.
Its patented Onboard Tracker is an SaaS (software as a service) platform to manage the safe and efficient crewing of energy and maritime workers around the world.
Onboard Tracker has already delivered exponential sales growth in the past couple of years. The technology is now used on more than 70% of manned installations in the UK North Sea and in offshore operations in 70-plus countries worldwide.
Solab managing director Kevin Coll took part in the One Digital Tech scheme.
He said: “There were a lot of business start-up support programmes.
“But there was nothing out there for established businesses with a growth focus.
“Support from Opportunity North East has allowed me to concentrate on the growth areas and is paying dividends for the business.”
Participants in this year’s scheme include Granite City food packing technology firm Leap Automation.
It aims to double in size following an investment round with Alba Equity and Scottish Enterprise. Plans include increasing its team of 21 to 42, and strengthening production, product development and support capability.
International accolade for rapidly growing Fennex
Also part of the second cohort was One Tech Hub-based Fennex, which reported a year of rapid growth in 2022.
It took on seven graduates to support new customers and contract wins.
And its innovative technology for speeding up digital transformation in the energy sector gained international recognition when the firm reached the final of the World Oil Awards, in Houston, in the US, in late 2022.
Ms O’Hanlon said: “As well as the entrepreneurial education element of BGP, equally if not more important is having a community and safe space environment to connect with leaders at a similar stage to share challenges and successes.
“Being a founder can be a lonely experience. Founders have to wear multiple hats and face unique challenges and demands on their time – often split between managing the business day-to-day, while trying to focus on long-term growth ambitions.
“Knowing others are in the same position and using them as a sounding board is extremely valuable.”
Close-knit tech community
BGP participants are part of an alumni group of founders from 16 technology businesses.
Plans for future activity include social events to further build a close-knit, high-performing and supportive community.
One continues to play an active role in firm’s business development, working closely with founders to identify and lead activity to bring cohort members closer together.
Growth constraint
But access to fresh talent for the sector continues to be a growth constraint, Ms O’Hanlon said, adding: “The demand has increased exponentially.
“Businesses in the region are recruiting in a hyper-competitive, international tech talent market.
“One is working with partners, including industry, education and training providers, to develop and deliver projects that address current and future regional skills requirements, and attract and retain talent to high value jobs in the region.”
#Blockchain specialist @TrackGenesis is working with craft brewer @BrewToon to meet growing customer demand for traceability. We caught up with Rajesh and Cameron on this exciting collaboration and their experience of working with @Opportunity_NE1 https://t.co/YgZaxy4UmA
— ONE Tech Hub (@ONETechHub) June 30, 2022
She continued: “Ambitious tech founders and entrepreneurs have access to an exceptional range of support and a focal point for activity in One Tech Hub.
“It’s an outstanding environment to create and scale a high value, innovation-driven enterprise.
“I’m excited to see what the businesses we are working with achieve in the years ahead, and confident our cluster will continue to punch above its weight nationally and internationally.”
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