Scotland’s public sector is an important and valuable market for Scotland’s digital technology industries, valued at £811 million in 2016/17. This spend has increased by an average of 1.3% since 2010/11, with small and medium enterprises (SMEs) receiving around 35% of this total.
The 2017 Scottish Technology Industry Survey showed that 15% of respondents supply the public sector, which made it the leading market, ahead of financial services and the ICT sector.
Winning public sector contracts provides companies with stable income during the contract period and first class references, putting them in a better position to secure other clients. However, information about the current and future size of the public sector ICT market in Scotland is very limited.
This makes it more difficult for companies that already supply this market to plan future investments in Scottish based teams and resources. Businesses considering entering the public sector market for the first time find it difficult to assess the size of market opportunities without such information.
To address this, ScotlandIS has gathered and analysed data for current and projected public sector ICT expenditure across the whole of Scotland. The goal is to make it simpler and faster to assess market opportunities and make more informed investment decisions. The report examines various areas of the market, and highlights opportunities for businesses to win contracts.
The Public Sector ICT Expenditure in Scotland report provides a comprehensive overview of the sector, at a previously unavailable level of detail. Produced in partnership with the Scottish Government, the report breaks down the actual public sector spend on ICT – by area – over the past six years, as well as forecasting spend up to 2021.
The information and analysis presented in this report is based on data obtained from Scottish Procurement and GlobalData, a data solutions provider.
According to the report, the Scottish public sector spent £811 million with ICT suppliers in 2016/17. This spend has increased by an average 1.3% annually from 2010/11. During this period approximately 30% of the ICT expenditure has gone to small and medium enterprises (SMEs). Nearly 50% of this spend has been incurred with ICT services providers whilst network providers account for around 30%. Local government spends 33% of this sum, with the NHS following at 28%. Central government accounts for around 25%, with higher and further education institutions receiving around 12%.
The report also identifies four key trends in the use of ICT in Scotland’s public sector:
- Mobile working – the demand for mobile and flexible working will lead to ever greater demand for mobile data services
- Cloud – growth in expenditure on cloud infrastructure is expected to exceed 50%
- Cybersecurity – High profile attacks will lead to a 20% increase in spending on security
- New powers for Scotland – More devolved power such as social security will require greater spend
Colin Cook, the Scottish Government’s Director Digital, said: “Our investment in networks, software and digital services provides opportunities to businesses of all sizes and underpins our efforts to create a national ecosystem of digital companies and talent that are able to compete successfully in increasingly international and competitive markets. This requires us to be innovative in the ways in we engage with digital technology businesses. Our Dynamic Purchasing System aims to make it simpler for companies to connect and work with us. Our CivTech® programme is designed explicitly to enable entrepreneurial talent to address the challenges of the public sector and, I hope, demonstrates a willingness to think differently and take action.”
“This report demonstrates the importance of the public sector within the digital economy, and the Scottish Government is actively strengthening this relationship. I trust that this report will provide tech companies already supplying goods and services to the public sector with further guidance on future business opportunities, and provide companies that are new to public sector procurement with a better understanding of the opportunities that are available.”
Polly Purvis, CEO of ScotlandIS, said: “We conducted this research to respond to demand from members. The report is focused purely on the situation in Scotland with findings at a level of granularity that has not been available before.”
Breakfast briefings to launch the report will take place on the 17th January in Edinburgh and 18th January in Glasgow. The events will outline the key opportunities on the public sector ICT market and provide attendees with advice on ways to seize these opportunities.
For further details and to buy a copy of the report visit the ScotlandIS website.