Digital tech sector worth GBP 184 billion to United Kingdom economy

Lloyd Doyle
May 17, 2018

The report also says that, aside from the silicon hotspots like London, there are also "silicon suburbs", or tech towns.

According to the findings, the UK's digital tech sector grew 2.6 times quicker than the rest of the economy between 2016 and 2017, with the industry now being worth almost £184bn. This had a knock-on positive impact for recruitment in the sector, with the organisation revealing jobs in digital tech growing five times faster than any other sector in the UK. 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.

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

Brexit is often cited as a potential threat to the tech sector, and a survey of 3,428 people involved in digital tech revealed that the only places in which Brexit is cited as a top three challenge are Cambridge and London.

There were also several so called "mega funding" rounds during the year, with game development platform Improbable raising £370m from Japan's Softbank, food delivery service Deliveroo raising £284m and mobile network Truphone raising £249m.

The full report can be found on this link.

In total, the United Kingdom has seen £42bn venture-backed exits between 2013 and 2017. But London is the engine for United Kingdom digital tech industries.

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.

These smaller population centres are attracting more digital tech businesses just as the whole United Kingdom tech sector widens the growth gap between itself and other sectors.

The 16 tech towns with above average digital density - higher levels of tech employment - could prove to be a fertile breeding ground for the next generation of tech start-ups. These include Reading, Basingstoke, Burnley, Slough and Heathrow, as well as Telford, Cheltenham, Stafford, Huntingdon and Swindon.

Eight cities are also showing above average tech employment, demonstrating how the UK's tech boom is spreading beyond locations like East London and Manchester where it already well established.

The cities are Portsmouth, Bristol, Cambridge, Southampton, Oxford, York, Salisbury and Bath.

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.

On average, 72pc of United Kingdom digital tech workers are over the age of 35, challenging the stereotype that jobs in this sector are the preserve of millennials. While the proportion of tech jobs held by people of black, Asian and ethnic minority backgrounds (15%) is higher than the figure for total United Kingdom jobs, only 19% are filled by women, compared with 49% of all United Kingdom jobs.

However, the dearth of women in the tech sector remains a major factor. In London, 33% of tech company customers are based outside the United Kingdom, compared to 30% in Silicon Valley and 7% in Beijing.

Despite the tech sector (in London especially) campaigning heavily for the United Kingdom not to leave the European Union, the report indicated that the United Kingdom tech sector is confident about its prospects post-Brexit.

Outside of London, once again, two out of the top three main concerns would be affected by how immigration will play out before and after Brexit. In general, tech communities across the United Kingdom appear optimistic for their growth prospects.

More than 70pc of respondents think the number of digital businesses in their local area will rise over the next 12 months while more than 90pc think the scale of digital businesses will either expand or stay the same.

Although the sector is on the up, there are still lots of concerns from entrepreneurs, investors and founders.

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". The sector is growing faster and providing more high-paying jobs than the wider economy. They are a hotbed of innovation, creativity and entrepreneurial spirit.

"This is a huge success story for the United Kingdom but we also want to make sure that the benefits of the digital tech boom are reaching every corner of the United Kingdom, so that we can build a Tech Nation that works for everyone", he added.

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