Science: Beyond the Silicon Glen: In Scotland, the focus is shifting from hardware towards software production and the provision of computing services, writes Lynne Curry

Driving in London is a tougher game than life on the roads in Forres, a small town near Inverness, which reserves its aggression until the annual effort for Britain in Bloom. There is a cruel irony, then, that motorists booked for parking offences in some London boroughs will in future have their tickets processed by 200 staff specifically recruited to do the job amid the Scottish flora.

Only the issuing of the ticket will take place in London. The rest of the transaction - including banking the spoils - will be done by Hoskyns, the UK market's largest supplier of computer services, now building a pounds 3.2m business processing centre in Forres.

The town lies outside the inexact territory of Scotland's 'Silicon Glen' (between Edinburgh and Greenock), but it symbolises the direction in which the country wants to go: away from a dependency on hardware.

Huge endeavours are being made to establish Scotland as a centre of excellence for software and other services. Since 1991, Scottish Enterprise has had a dedicated software group that fosters new software developers and encourages industry to use innovation. One of its initiatives is Softnet, a network of three centres set up to nurse fledgling businesses. Established companies that want a Scottish base have also moved into some of the purpose-designed offices at South Queensferry, Livingston or in the grounds of Stirling University.

Before the middle of next year new centres should be operating in East Kilbride, Glasgow, Renfrew and Aberdeen, and the number of companies working in them is expected to 'explode' from about 30, the current figure. It is the proud boast of Mike Crawford, of the software group, that so far only two have failed through inability to gain enough of a market share, while the combined gross turnover of these new businesses has reached pounds 7m.

Scotland's current growth in software is 16 per cent a year, nearly three times the European average. The internal information technology (IT) market alone is worth pounds 500m, with 60 per cent of this coming from outside. Some 300 companies employ 4,000 people, while another 2,000 work in software teams of electronics companies and 12,000 work in internal computer departments. Scotland also has the highest proportion of students studying computer-related disciplines in Europe.

Companies with a presence there include Aldus, BAe, Sema, Spider, Science Systems and Oracle. Hoskyns plans to build at least another three business processing centres within half an hour of Forres. The base contracts for the first include the parking tickets as well as council tax administration for Grampian and Moray councils. Lee Eskholme, an executive director with the Hoskyns Group, said the location had been chosen for 'stability of labour' and the quality of its workers.

'Scotland has a workforce perceived as well-educated and loyal. We did have grants, but the logic for going wasn't based on short- term gain because we're in the business long term,' he said.

Hoskyns's processing centres are founded on the expectation that more organisations (particularly public bodies) will contract out an increasing number of tasks now done on computers, and that they will want the whole task done, not just the computing. Forres's appeal as a pleasant place to live also came into the equation.

Robin Mair, of the Scottish Enterprise software group, said Scotland's links with the industry went back 30 years, when it had begun to attract big names such as IBM, NCR and GEC Marconi. 'Some of it was defence related. Scotland's academic record is good and we have always had a reputation for engineering and electronic engineering. More recently, Locate in Scotland, the state-funded inward investment body, has deliberately targeted the electronics sector.

'Twenty or 30 years ago we examined our strengths and what the industry was going to do, and we now estimate that there are between 45,000 and 50,000 people employed in the electronics industry. We're pretty proud of that. But the IT industry across the world is changing, and will change even more dramatically. IT-spend is increasing year on year by maybe 10 per cent, but the proportionate spend on hardware is decreasing and the market will be increasingly orientated towards software.'

The Scottish Software Partner Centre, the group's first initiative under Softnet, is viewed as a significant success in the strategy to keep the country abreast of this change. A joint venture with Hewlett- Packard at South Queensferry, it occupies 12,000 square feet of office space owned by Hewlett-Packard and rented by 20 company 'partners'. Their businesses range from software quality assurance to packages for industrial assembly.

One of the best track records belongs to Axon Networks - not least because it was set up (originally in his dining room) by Dr Peter Palmer, the founder of Spider, the largest independent computing networking company in Europe. Spider and Dr Palmer parted amicably two years ago when the company had a healthy pounds 20m turnover. Building on the original idea of exploiting the explosion of networking, Axon has taken this a step further with management software for networks. Despite its base near Edinburgh, it is registered in the United States, where it does most of its business with large corporations. Customers in North America include Delmarva Power and Light, the Toronto Stock Exchange and the Ministry of the Environment in British Colombia.

'I believe the critical success factor for any company is to get its marketing right and ascertain that it's the right product for the market,' Dr Palmer said. 'Scottish industry, I think more than English, is always fascinated by technology and there is a huge difference between technology and demand.

'From my experience at Spider, I could project that there would be quite a large market for these kind of tools in the next few years.'

Dr Palmer, who moved to Dalkeith with ICL in 1982, says the partner centre provided suitable premises with the right facilities. 'For somebody starting in business, that's an enormous weight off your shoulders.'

Many Scottish enterprises have needed no nursing to find niches to exploit. It may not be widely known among mobile telephone users that half the two million computerised bills produced every month in the UK are prepared with software developed by Kingston-SCL, an Edinburgh company that leads the European market in this field.

Kingston-SCL employs 120 people and has offices in Munich, Paris and Hong Kong. It competes with American companies to win contracts all over the world, and is applying for the Queen's Award for Export. John Roger, sales and marketing director, said the company had seen its chance when it did some work for a small Edinburgh- based company that asked it to prepare billing software. Its founder, John McCready, who set it up in 1965 as a computer consultancy, remains its chairman but now presides over a turnover of pounds 6m.