The figures suggest the Scottish tech sector remains resilient despite broader economic challenges, according to analysis by leading audit, tax and consulting firm RSM UK.

Ross Stupart, office managing partner for RSM in Edinburgh said: “It’s great to see another strong year for incorporations in Scotland, closely reflecting the national average of 22%. This demonstrates that Scotland continues to be a place that creates a good volume of tech start-ups. The key challenge for the tech sector in Scotland however remains the ability to scale in Scotland.

“By creating an environment that provides businesses with ready access to capital for rapid upscaling, and encourages their ambition for internationalisation and growth, we should see many of Scotland’s tech start up entrepreneurs fulfilling their huge potential. This could help create lots of economic value from Scotland’s tech sector. Some policy changes will be required within the Scottish Government to get us on that track.”

The national data shows a total of 51,017 tech companies were incorporated in the UK last year, up from 41,972 the year before. Key sub-sectors that saw significant growth included software developers, data businesses and IT consultancies.

All regions in the UK saw an increase on the previous year, except for Wales which still incorporated 1,150 businesses, a small decrease from 2022. Tech incorporations in London rose by more than a quarter (26%) on the previous year’s figure to 26,060.

Ben Bilsland, partner and technology industry senior analyst at RSM UK, added: “Our research is testament to the resilience of the UK’s tech sector despite global challenges. The rise in tech incorporations shows there is cause for optimism in this key industry.

“Whilst it’s impossible to ignore AI as a driving force behind UK tech incorporations, especially for businesses working in data, there will be other factors to consider. London projects itself as a leading global authority in tech. That strength is reflected across the UK by a vibrant and energetic sector that consistently supports early-stage businesses. But the sector has, and continues to be, marked by layoffs, so it may be that these members of the workforce have been confident enough to go it alone, thereby fuelling incorporation growth.

“The government has an important role to play if this trend is to continue. Making valuable resources, including AI compute, accessible for universities and early-stage entrepreneurs is critical. Funding and policy changes, including innovation reliefs, that ensure a world-class tech workforce are crucial both in terms aiding education and skilled immigration. For those businesses working in AI, clarity on future regulation will assist the ability to forward-plan.”