United Kingdom tech industry growth outpaces the rest of Britain's economy

Galtero Lara
May 17, 2018

During 2017, United Kingdom digital technology companies raised GBP 4.5 billion in venture capital investment, nearly double the figure raised in 2016, according to PitchBook figures.

Secretary of State for Culture, Media and Sport Matt Hancock said: "Tech Nation 2018 highlights the extent to which the digital tech sector is providing new energy to the whole economy".

Tech Nation 2018 reveals that United Kingdom tech companies have more foreign customers than even Silicon Valley companies.

Although the sector is on the up, there are still lots of concerns from entrepreneurs, investors and founders. There are 16 towns in the United Kingdom with higher levels of tech employment as a proportion of employment.

The report also shows how the United Kingdom is succeeding in establishing itself as a leading tech hub. These include Reading, Basingstoke, Burnley, Slough and Heathrow, as well as Telford, Cheltenham, Stafford, Huntingdon and Swindon. "This is a huge success story, and we are working hard to make sure the benefits of digital technology reach every corner of the country as we build a Britain that is fit for the future", he said. For instance, blockchain is a popular in Manchester; shown by analysis of Meetup data which found there were 151 meetups and almost 62000 members.

Eileen Burbidge, partner at Passion Capital and Chair of Tech Nation, said: "From FinTech to HealthTech, self-driving cars and artificial intelligence, the UK's digital tech sector is having an impact on every aspect of our daily lives and economy". Perhaps unsurprisingly, AI is a key aspect of the tech sector, accounting for 16% of the top 400 United Kingdom tech meetups.

But entrepreneurs remain optimistic, with 70% saying they think tech businesses in their area will grow significantly over the next 12 months.

The report shows there is some progress being made in terms of diversity, but there is still some way to go. On a more positive note, on average, 15% of those in digital tech jobs are of black, Asian and ethnic minority (BAME) backgrounds, compared with the 10% average across all United Kingdom jobs.

But fewer than one in five people working in tech are female, compared to 49 per cent across other sectors.

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The stereotype that tech is the territory of millennials is also misplaced as 72% of United Kingdom digital tech workers are, on average, over 35. But the United Kingdom capital was one of only two European cities that made it into the global top 10 in terms of digital tech ecosystems; the other was Berlin.

Still, some problems are broadly consistent across the nation.

In the rest of the country, access to talent was cited as the most common challenge - affecting 83% of the UK's regional tech clusters.

It was easy to see why: the tech sector, particularly in London, relies heavily on overseas-born talent.

The rest of the Tech Nation report outlines how the UK's large tech industry, which has benefitted from the access to talent afforded by European Union membership, continues to grow.

"Tech Nation's survey of the industry shows that confidence and optimism is high, but it is important for us to keep supporting this sector and give British companies the best chance they can to grow and scale".

Digital tech companies in London are "the most connected in Europe", second only to Silicon Valley for worldwide connections. "We need to make the most of that, as our new relationship with the European Union will undoubtedly force us to be even more adaptive, innovative and ambitious".

But Tech Nation has hit back with data which showing the United Kingdom remains a global tech hub, despite Brexit.

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