Scottish Tech Leaders React To Budget Announcement

The freshly released Scottish Budget has already turned heads as local businesses anxiously awaited the devolved nation’s response to the new UK government’s financial plans. 

The Scottish tech and entrepreneurial ecosystem have fluctuated in confidence and composure in anticipation of the budget, which spells out new NIS fees, tax obligations, educational funding, and investment reform. 

Of prime importance to Scottish business and tech, the Scottish government did announce its intentions to make Scotland “one of the world’s most attractive places for entrepreneurs and startups.”

A highlight of the budget for the tech community is the commitment to invest £321 million in Scotland’s enterprise agencies supporting emerging technology, providing a confidence boost to a sector struggling to break out of the startup phase and retain a sustainable, competitive level of investable capital. 

As a part of this plan, the Scottish National Investment Bank will receive £200 million in the 2025/2026 period to provide financial support for Scottish businesses while generating private sector investment. 

Further, enterprise agencies will receive more that £320 million to help attract businesses to Scotland and support expansion. 

In addition to this, an enterprise package to boost entrepreneurship and develop clusters of high-tech companies of £15 million will be established, with at least £4m to help women start and grow their businesses. 

Almost £100 million will be spent on expanding Scotland’s digital infrastructure, the government explained, while £62 million is set to be allocated to regeneration projects for community revitalisation.  

To help meet its net zero goals, the government will also nearly triple capital investment in the offshore wind supply chain to £150m in 2025/2026, advancing the Scottish Government’s £500m to commitment to offshore wind. 

“The economy is the beating heart of any modern nation. It is where opportunity and national prosperity are the rewards for innovation and creativity,” deputy first minister and economy secretary Kate Forbes said.

“We have built a firm foundation over the past year with steady growth and a rise in wages. Now it is time to accelerate that progress. Businesses create wealth and it is the Government’s job to develop an environment that helps them grow, attracts investment and supports innovation. That in turn creates jobs and puts more money in people’s pockets.

“The Budget that we have set out has been developed in partnership with the businesses I meet every day. I hope it sends a signal to the world that Scotland is open for business.”

A Positive Reception

Overall, tech and entrpereneurial bodies were positive about their funding highlights in the new budget, with particular emphasis on emerging tech investments and green energy. 

 “It is reassuring to see the Finance Secretary commit to supporting Scotland’s pursuit of long-term growth,” Karen Meechan, ScotlandIS CEO, said. 

“By highlighting AI and robotics the Finance Secretary has identified two crucial emerging areas of the tech sector, but it’s important to recognise that our industry is broader than just these two areas. 

“From green data centres and connectivity specialists to cybersecurity and climate tech, Scotland has an enormous amount to offer and it’s important that our sector receives support which is commensurate with our overall economic contribution.”

The monumental £321m into emerging technologies was celebrated across industry bodies, including the National Robotarium, based at Heriot-Watt University. 

“This significant £321 million investment from the Scottish Government to support emerging tech represents a critical step in securing Scotland’s position at the forefront of the global robotics revolution,” the National Robotarium’s CEO, Stewart Miller, said. 

Miller said the investment “will accelerate Scotland’s ability to compete in a market projected to reach £223 billion by 2032.

“With the UK currently lagging behind other G7 nations in robotics adoption, this investment sends a powerful signal about Scotland’s ambition to lead rather than follow in the next wave of technological innovation.”

Industry bodies also welcomed the investment agencies supporting enterprise and revitalisation projects across the nation, noting reports that the further away from London one goes, the less new-to-market innovations are seen. 

“We welcome the investment in enterprise agencies, supporting emerging tech, including AI, and programmes like Techscaler, to support new-to-market innovations in Scotland,” Heather Thomson, interim CEO of the Data Lab, said. 

 “With the rapid and continuing advancement of technologies, including data and AI and its applications, Innovation Centres across Scotland are supporting companies to navigate these tech developments, advancing groundbreaking ideas, and accelerating these projects into new markets.”

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“The government’s continued support for offshore wind and green renewable energy sources has been well received with advocational groups like the Net Zero Technology Centre,” Myrtle Dawes, chief executive of the NZTC said. 

“We welcome this government investment in Scotland’s burgeoning offshore wind sector, and commend Finance Secretary Shona Robison’s commitment to attracting private sector capital.

“For decades, Aberdeen and the north-east have been at the forefront of energy innovation, with talent, technology and wind power in abundance. Scotland has the necessary ingredients to become the net zero capital of Europe.”

But Does it Go Far Enough?

Bearing down into the details of the Scottish budget does leave much to be desired for some, though even organisations that had their qualms tended to welcome the changes. Their main complaint tended to be that the measures taken by the government were not strong enough to truly help businesses.

Financial services experts lamented the Scottish government’s position on income tax, which is higher than the English rate for middle and higher-income residents. 

“Scottish Financial Enterprise has consistently urged the Scottish government to take action on the growing income tax divergence between Scotland and the rest of the UK, and these changes are therefore a welcome, if modest, step in the right direction,” Sandy Begbie CBE, chief executive of Scottish Financial Enterprise, said. 

“But these changes fall short of recognising that Scotland’s current tax regime is simply not working. As the Institute for Fiscal Studies has pointed out, higher income tax rates in Scotland have led to less rather than more money for public services, while also deterring investment and harming economic growth, and our tax regime remains complex, disproportionate and uncompetitive.

“That is why we need to see continued action from the Scottish government to further reduce income tax divergence between Scotland and the rest of the UK over the coming years, as well as a renewed commitment to work with the business community to deliver the sustainable economic growth our country so desperately needs.

“Measures to boost capital investment are also to be welcomed as a means of unlocking and attracting investment, but these now need to be delivered at pace to deliver a measurable impact for our economy. Our sector stands ready to work with the government to achieve these ambitions.”

Further, organisations have called out the budget for falling short across a number of financial measures, including non-domestic rates relief, saying that the budget does not go far enough to help businesses innovate and scale, let alone recover. 

“Providing urgent rates relief for the hospitality sector is an essential step and we are pleased the Scottish Government has listened to our calls to take action,” Dr Liz Cameron CBE of the Scottish Chambers of Commerce said. 

“However, whilst we understand the tough choices the government had to make, the significant level of NDR relief will not fully mitigate the rising costs for many businesses at breaking point.

“The Fraser of Allander Institute estimates that it would have cost an additional £70m more than the funds generated via the Barnett formula to bring business rates relief in Scotland in line with England. 

“That would have been money well spent and, combined with the welcome budget plans to invest in our rural areas and town centres, it would have created many positive opportunities for businesses across Scotland.

“Finance Secretary Shona Robison has recognised the difficulties and many obstacles confronting businesses but this budget doesn’t go far enough to help us to protect jobs and deliver the innovation, investment and growth Scotland so desperately needs.”

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