Last year, the TMT sector contributed close to £5bn to the Scottish economy, up from £3.9bn just five years ago. Approximately one third of technology firms based in Scotland have a headquarters in Edinburgh, now the highest percentage of any Scottish city.
Perhaps the most famous technology names to be born out of Edinburgh are Skyscanner and Fanduel. Formed in 2001, Skyscanner opened an office in the city in 2004. Today, the firm is a $1bn business and employs around 300 staff at its Quartermile One HQ. Its neighbour at Quartermile is the fantasy gaming company Fanduel. Founded in Edinburgh in 2009, the company quickly gained traction in the US market, and today is valued at over $1bn. These home-grown brands are in good company with the likes of Amazon, Sky and Dell all having an established presence in the city.
For firms like Fanduel and Skyscanner, the transition from start-up to established brand has been swift, and Edinburgh has met the necessary requirements necessary to attract and retain fast growing start-ups. The universities are servicing the need for creative talent which is essential to support rapid growth in the digital arena. Approximately 1,200 students graduate every year with computing related qualifications.
Funding initiatives, such as Edinburgh-based Archangel, support the initial stages of start-up growth, and technology incubators such as Tech Cube and Code Base are providing co-working office space, which allows for networking opportunities and mentoring support. At the end of 2015, Codebase further expanded their occupied space at Argyle House to 6,967 sq m.
For the property market, a rise in office demand from TMT occupiers is timely, as demand from the finance occupiers has been falling. In 2015, finance accounted for just 8% of office take-up in the city, yet demand from the TMT sector has grown at a fast pace. The amount of space taken by the sector exceeded that of the banking and finance occupiers for the first time in 2013, peaking in 2014 at 36% of take-up. In the first half of 2016, TMT occupiers have accounted for 34% of take-up in the city.
Edinburgh has built the foundations of a technology hub over a number of years, and now is reaping the benefits of growth in this sector. Significantly, a high number of current technology entrepreneurs trace their origin back to an Edinburgh University education. This talent pool will continue to create new entrepreneurs and employees for technology-based firms.
As such, Edinburgh is well placed to benefit from further growth in the coming years.