The UK’s digital technology sector is experiencing growth six times higher than any other UK industry, according to Tech Nation.
Since 2015, Tech Nation has been analysing the opportunities and challenges facing the UK’s tech sector for its annual reports.
In its 2020 report, Tech Nation has mapped the sector’s growth over the past few years, which has been buoyed by record investment in the country’s tech as well as an employment boom.
The UK is the top scaling tech nation in Europe, with a quarter of European high-investment cities located in the UK and UK investment now more than Germany and France combined for 2019. UK companies also secured a third of the £30.4bn of investment raised by tech companies during 2019 in Europe.
It highlighted Manchester in particular, which is the fastest growing tech city in Europe with an increase in investment of 277% between 2018 and 2019. In fact, 45% of high-value scaleups are based outside of the capital.
However, London continues to receive record investment for tech, with a 67% increase on 2018.
The country also has the third highest number of tech unicorns, companies valued at $1bn or higher, behind only the US and China. There were also 95 companies valued at $250-$800m in the UK in 2019 and this pipeline of startups indicates that disruption to the UK’s tech ecosystem will continue as they grow.
In terms of Gross Value Added (GVA) the digital tech industry grew six times faster than the rest of the economy between 2010 and 2018, which increased by 1.4%,with tech jobs now making up 9% of the national workforce after 40% growth in the last few years.
“The UK is a shining light for tech entrepreneurs”: Tech Nation
Gerard Grech, Chief Executive, Tech Nation, commented:
“In a rapidly changing world, the UK is a shining light for tech entrepreneurs, investors and employees, with jobs in the digital sector now accounting for 9% of its national economy. Some of the biggest UK successes; the 77 so-called tech unicorns, are $1bn valued companies now inspiring others, and there are an additional 95 tech businesses across the UK primed to be scaling over the coming years. The success of these businesses will be grounded in the UK tech ecosystem’s ability to build deeper and broader knowledge networks between various constituents such as experienced investors and entrepreneurs and to truly fuel growth across the country. We need to stay responsive, with smart regulation, ever increasing access to growth capital and new markets. Every effort we put in now will repay many times over, as the past few years have already shown.”
2019 was a record year for investment in UK tech, and this was particularly prevalent in fintech, which remains the UK’s largest tech investment sector with a 100% rise from 2018.
The report also highlighted the fact that investment in cutting-edge technologies including AI, cybersecurity, blockchain and healthtech is ensuring that the UK remains firmly on the map for the future.
The State of Technology This Week
Russ Shaw, founder of Tech London Advocates & Global Tech Advocates said:
“These are unprecedented times with market indicators drawing parallels to the financial crisis of 2008. Yet, the UK is well capitalised, technologists are creating solutions to help companies be fully operational and our entrepreneurs remain characteristically undeterred. My hope is that tech does what it does best and responds to this global pandemic with advancements in network capabilities, in healthtech solutions, and in new workplace tools – that will safeguard the whole economy in the months and years to come.”
Alongside the report, Tech Nation also announced which UK scaleups would join the 8th edition of Future Fifty, its late-stage growth programme. Future Fifty Alumni include Deliveroo, Funding Circle, Skyscanner and Partnerize.
Dr Sarah Wood, Founder of Unruly commented:
“The UK continues to push the envelope when it comes to creating technologies that are reactive to the ever changing world around us. In 2019, we see continued growth in AI, Healthtech and Fintech as well as purpose-driven tech companies coming to the fore, with investment into UK tech companies responding to the UN’s Sustainable Development Goals nearly doubling in the last year alone. I’m excited to see these developments in the UK tech sector, which is testament to the ambition and innovation of tech entrepreneurs right across the UK.”