May 18, 2018
The UK’s digital technology sector continues to grow faster than the rest of the economy, according to the latest Tech Nation Report for 2018. Turnover of digital tech companies grew by 4.5 percent between 2016-17 compared to UK GDP which grew by 1.7 percent over the same period. This means that the tech sector grew at 2.6 times faster than the rest of the economy. At the same time the number of jobs in digital tech rose five times the rate of the rest of the economy, demonstrating how the digital tech sector is one of the best performing sectors in the UK economy. 2017 proved to be an amazing year for the UK digital tech sector with some of the biggest fundraisings and exits seen in years, as international investors flocked to fund UK-based firms, according to the report. British digital tech companies raised £4.5bn in venture capital investment during the year, almost double the previous year.
- A third of London’s businesses have foreign customers, surpassing the 30 percent of Silicon Valley companies that have overseas customers according to data from Startup Genome
- London is the second most connected tech ecosystem globally, behind only Silicon Valley. 25 percent of the world’s entrepreneurs report a significant relationship with two or more others based in London
- The UK is third in the world for total capital invested in digital tech companies, behind the US and China
- London startups have the fourth most international workforce in the world. Only Singapore, Berlin and Chicago have a higher proportion of overseas workers.
Digital suburbs, not just cities
The report also reveals the rise of ‘digital suburbs’ and tech towns across the UK where the digital tech sector is growing in urban areas not usually associated with startups and tech businesses. These clusters are attracting more digital tech businesses, which is important for local economies given that the digital tech sector is growing 2.6 times faster than the UK economy.
- Tech Nation 2018 reveals that the digital tech sector’s workforce is older than commonly perceived and more ethnically mixed than the average UK workplace. Black, Asian and Ethnic Minorities (BAME) account for 15 percent of digital tech workers. This is significantly higher than the 10 percent across all UK jobs.
- Ethnic diversity is above UK average, yet gender diversity is significantly lower.
UK tech community perceptions
- Access to talent is the most common challenge – affecting 83 percent of clusters
- Access to funding is a top 3 challenge in 49 percent of clusters
- Bad transport links are a top 3 challenge in 29 percent of clusters
- UK entrepreneurs are overwhelmingly optimistic about the future of the UK’s digital tech sector:
- Over 70 percent of respondents think the number of digital tech businesses in their local area will rise over the next 12 months
- And, over 90 percent think that the scale of digital tech businesses in their local area will either expand or stay the same
- Artificial intelligence is becoming more important – of the top 400 UK tech meetups with the largest membership nearly 16 percent are related to AI
- 1.6 million people across the country belong to 3,627 informal tech meetup groups
- Analysis of Meetup data reveals that particular cities are quickly developing specialisms eg: blockchain is emerging specialism in Manchester where there were 151 meetups and nearly 62,000 members