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Jamie Coleman: Building factories in the cloud

posted Nov 11, 2015, 10:23 AM by Ariel Koropitzer   [ updated Nov 11, 2015, 10:45 AM ]

Scotland is a great place to launch a start-up. We’ve been quietly building a tech ecosystem in this country that can now stand up and be counted, with a voice that is now heard around the world.

With this nation’s history of innovation and invention that shouldn’t be a great surprise, but precisely because we’re Scottish it often is.

Until quite recently, we saw ourselves – and indeed were seen by those from the outside looking in – as quite a fledgling tech hub. With the billion dollar valuations of our greatest tech success stories to date – FanDuel and Skyscanner – we have this strong indicator that we are fledgling no more. The confidence levels are skyrocketing and this has not gone unnoticed by tech and investor communities across the globe. 

The days where a career in law or medicine were safe are over. Across every sector of life, digital technology is taking over. From healthcare, finance, education and energy to transport, tourism and construction, software is king. Uber is the world’s largest taxi company that owns no taxis; Airbnb is the largest hotel company and it owns no hotels. 

Computing is driving modern drug discovery and hospital logistics while it simultaneously changes banking and travel. We are living at the beginning of a golden age of invention and Scots firms are well placed to help build this future. While many people see technology in consumer applications such as Facebook, many of the most world-changing software applications are in other sectors, improving our lives and giving us access to what our grandparents would have seen as superpowers.

The raw material of this revolution is brainpower and that has always been the core asset of Scotland. The industrial mindset of building bridges and steam engines has transitioned into building complex software. We no longer have the chimneys of the industrial revolution in our cities: our factories are in the cloud. We are blessed with a number of world-class universities feeding talent into the new technology start-up firms and we have much of the global supply chain across multiple industries having offices in Scotland.

A stone’s throw from Edinburgh’s financial district at Argyle House, we’ve been running CodeBase for over a year-and-a-half now. It’s already the UK’s largest tech incubator and the fastest-growing one of its kind in Europe. We’re up at over 60 companies and over 400 people and have become a real focal point for a lot of the great things that are happening in Scottish tech in the early 21st century. We have close links to FanDuel – who were incubated in the precursor to CodeBase – and Skyscanner who, like FanDuel, have been incredibly supportive to everything we’re trying to achieve here.

And what is it we’re trying to achieve? That’s quite straightforward; we want to nurture the next generation of tech superstars.

In comparison to many other countries, Scotland is an incredible place to build a business. It is easy to incorporate, there is a wealth of talent, access to healthcare is better than most of the rest of the world and Scots are liked and respected globally. We have also traditionally been a welcoming country and the ability to attract international talent is vital to our ability to compete on a global scale.

What had been lacking was a knowledge of how to build software companies on the internet. This is very different from building factories to make widgets half a cent cheaper and, until recently, we lacked enough people who understood how to do this. I really do see a big improvement this year. In CodeBase, we are focused on scaling up companies from good to great and across the local ecosystem it feels like the bar is being raised across the board. Angel investors are becoming increasingly interested in software companies and the Scottish Investment Bank Co-investment Fund is a clear indicator of the willingness of Scotland to invest in entrepreneurs. The recent Highlands & Islands/Scottish Enterprise-funded “Scotland Can Do Scale” programme was an outstanding success, bringing over key figures from the Massachusetts Institute of Technology (MIT) to work with Scottish start-ups. The recent merger between the Entrepreneurial Exchange and the Saltire Foundation to create Entrepreneurial Scotland under the leadership of Chris van der Kuyl and Sandy Kennedy is particularly exciting. More of the large corporates are becoming interested in working with start-ups, allowing these young companies to innovate faster and create value.  

As for that next generation, I could write an article each on every great new company coming through at present. A few that I hope many people learn more of in the coming months are RelayMed, who connect medical devices to electronic healthcare records; TV Squared, who have built incredible technology for real-time sales attribution; Administrate have a breakthrough software platform for education; CogBooks have created advanced adaptive learning technology; security firm ZoneFox have developed world leading insider threat detection monitoring and Speech Graphics create audio generated facial animation. 

I could go on. Importantly, all of this is happening inside a single building in Edinburgh. But there is a long way still to go and a range of issues that affect our ability to maintain this momentum.

Firstly, there is a huge lack of venture capital and this lack is making it difficult for rapidly scaling companies to keep growing. We desperately need new venture funds willing to invest risk capital at the series A, B and C stage locally. We cannot just rely on London or Silicon Valley money.

We need to train and attract more talent into the digital world. The quality of university students is incredible but I’d like to see a doubling in size of every computer science department in the country. Companies in CodeBase regularly double in size and I don’t want them to be forced to move abroad because they cannot hire locally.

We also need to attract international talent. Fears over visa caps for non-EU citizens is a genuine concern for our ability to grow.

We need more quality accelerator programmes to build companies properly. We need a huge improvement in public sector procurement. I see medical inventions created here that must go to North America and south-east Asia to sell because it is so difficult to get in to the NHS. 

Governments themselves are huge purchasers of software technologies and I’d like to see continued improvement in allowing small start-ups to gain access to these vital markets. 

Digital skills and digital literacy are a huge concern. Fortunately, the new digital skills academy, CodeClan, has just opened in CodeBase with support from Skills Development Scotland and the Skills Investment Plan. I hope that this marks the beginning of a real and ongoing focus on teaching the population the vital skills required to compete in this new age.

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