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Scottish firms say Government isn’t doing enough to help cope with Covid-19

More than half of Scotland's tech start-ups believe the Government isn’t doing enough to support them from the threat posed by coronavirus.

In a survey of more than 100 tech business founders carried out ahead of the Turing Fest technology conference scheduled to take place in Edinburgh in August, a further 17 per cent said they are unclear what kind of support is even available to businesses.

More than nine in 10 (95 per cent) said the pandemic has already had a negative impact on their businesses while over half (53 per cent) described the impact as “severe”.

An open letter to the Scottish Government penned by more than 50 start-up chiefs says that: “the current interventions, from both the Scottish and UK governments, will not adequately address the unique needs of high-growth Scottish tech companies”.

They say urgent action is needed “to protect Scotland’s entrepreneurial future” and are concerned that an entire generation of tech start-ups could be lost.

In the survey, 38 per cent said they are furloughing staff in response to the crisis, while half said they are freezing or scaling back hiring. One in five (21 per cent ) has been making redundancies.

Brian Corcoran, chief executive of Turing Fest, said: “Tech start-ups can play a key role in rebuilding Scotland’s economy after this pandemic passes, but unless there is immediate intervention from the Scottish Government, many start-ups will not survive and the ecosystem that the Government, and others, have worked so hard to cultivate could be decimated.”

The survey respondents say they wanted more direct financial support from the Government in addition to the furloughing measures taken for workers’ pay.

Almost eight in 10 (79 per cent) say they wanted to see the Government offer bridge grants to help businesses maintain their operations, 67 per cent call for expanded research and development/innovation grants, and 59 per cent identify employee wage subsidies as a key support mechanism.

According to Turing Fest, Scotland’s digital economy businesses employ almost 100,000 people and contribute £6.6 billion to the economy.

The survey questioned 106 founders and executives of start-up and scale-up technology businesses based in Scotland, with survey results collected between 13 and 11 April 2020.

Paul Walton, co-founder of Edinburgh based security firm Boundary, said: “Countries like France and Germany have already announced wide ranging and highly supportive schemes for their tech industry and whilst the UK government’s announcements last week were welcome, the rules of the scheme mean many Scottish companies will not be able to get support from it.”

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