Image: Kasei
Scotland is home to a world renowned games development sector, dynamic digital media agencies and software development companies whose innovative products are used in devices around the world. Saturation of home markets, greater demand and the push for greater profits are the key reasons for selling globally and many Scottish tech companies are already reaping the benefits.
Despite this, a recent article in the Scotsman highlighted that the Scottish tech industry is not receiving the recognition it deserves – with senior executives receiving lower remuneration packages than their counterparts in other industries. If this continues, the industry – and Scotland as country – may struggle to attract and retain its top talent.
In order to continue competing on a global level the industry needs to do more to put themselves on the map and that is by selling more around the globe, tapping into markets they perhaps never thought possible.
If the demand is out there why not supply?
Scotland’s exporting has increased steadily over the years, global demand for Scotlands oil and gas technology means that strong links are in place to do business in places like Africa and the Middle East. Even the food industry looks to Scottish technology to overcome challenges in feeding a growing global population.
I spoke to David Mckenna, Cofounder of Red Box Recorders ltd, a UK based company that has pioneered digital recording technology around the world and now sells in over 40 counties. David spoke to me about the do’s and don’ts of selling globally.
What are the barriers to Scottish Tech companies selling abroad?
The main barriers of doing business in different countries are of course the language barriers. Although a large proportion of the world is taught and speaks English there is a lot more to language than the spoken word. Body language, mannerisms, tone of voice and dialects all play their part in making communication slightly more difficult.
Overcome this however and you are faced with cultural clashes, how somebody expresses themselves can be completely different depending on what part of the world you are in, regardless of what language it is in. What may be acceptable in some parts of the world, may not be quite as acceptable in others. For example, what is seen as gift giving in some parts of Asian business cultures can be construed as bribery by their UK or American counterparts.
What about motivational factors for selling globally?
The number one motivation for any company to sell globally is to diversify markets in the push for profits. David however suggested a rather surprising motivational factor – where do you enjoy going on holiday? If you’re going to choose a new market to sell to why not pick one for some selfish reasons of your own? If you can successfully sell your product in a country which you are passionate about you are even more likely to want to push forward and succeed. With the added bonus of some holiday time, after important meetings of course.
Which markets should Scottish Tech Companies enter first?
Ireland is close to home and the most culturally similar to Scotland with its historic Celtic connection, so this is an obvious choice. Post recession, this is a market which will be growing and there is definitely money to be made here.
The Netherlands is perhaps a surprising choice, however, with no language barrier, a growing economy and a nation very open to innovation this is an ideal market for a small Scottish company to test the waters and branch out in. The Netherlands is also ahead of its European neighbours in terms of its digital divide, with over 88% of its population being online. I would say that’s an excellent market for a Scottish tech company to engage with, don’t you?
Both the The Netherlands and Ireland are close to Scotland in distance, with excellent European Union links. Flights take around an hour and are available multiple times a day. The best part about these countries? They are significantly smaller and easier to break into than a country the size of America.
America seems like it would be an obvious choice, it is the worlds largest economy and widely spoken English. However the size of the American market is one which requires a scary amount of investment and capital, perhaps not the first market to tap into.
David did also mention a word of warning. If you seem to be ahead of your competition in recognising potential new markets, this could be because of two reasons:
They aren’t as savvy as you and you are ahead of the competition. Which is great!
Or…
There is some greater reason why they haven’t successfully tapped this market, make sure you find out if there is more than meets the eye.
Support for Scottish businesses looking to go global is fantastic. Organisations such as GlobalScot, Scottish Enterprise and Scotland IS have already helped many Scottish companies broaden their horizons, many of which are local computer software, IT, technology and digital media companies. The Enterprise Europe Network specifically helps Scottish businesses expand into Europe with the Horizon 2020 programme. This support, coupled with the Scottish Governments pledge to make Scotland a world-class digital nation by 2020 will hopefully pave the way for Scottish Technology Industry to really put itself on the map and stay there!
Are you a Scottish tech company recently gone global or hoping to? We’d love to hear about your experiences or thoughts, so please get in touch! Tweet us @enigmapeople or follow us on LinkedIn.