Tech Nation: UK Tech Expands at Faster Rate Than Wider Economy
LONDON--(BUSINESS WIRE)--May 16, 2018--Tech Nation:
RAPID SECTOR GROWTH The UK’s digital tech sector continues to accelerate faster than the rest of the economy, according to Tech Nation 2018, the landmark state of the nation report on the booming tech sector. Turnover of digital tech companies grew by 4.5% between 2016-17 compared to UK GDP which grew by 1.7% over the same period, according to official figures compiled by Tech Nation.
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 at 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.
Tech Nation 2018 is published by Tech Nation, a new voice for the UK’s fast-growing digital tech sector. Tech Nation builds on the work of Tech City UK and Tech North and is working to make the UK the best place in the world to imagine, start and grow a digital tech business. Its purpose is to accelerate the growth of the digital tech sector across the UK, help ambitious founders succeed, increase digital skills, share learning and knowledge between sectors and communities and help present the UK tech sector on the world stage.
RECORD YEAR FOR ACQUISITION, EXITS AND INVESTMENT RAISED 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. British digital tech companies raised £4.5bn in venture capital investment during the year, according to Pitchbook figures, almost double the previous year.
Notable exits for the sector during 2017 included Matchesfashion.com which was sold to a private equity investor for almost £750m and Leeds-based CallCredit acquired by TransUnion for £1 billion. 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. Some of the UK’s fastest growing tech companies include Improbable, Deliveroo, Farfetch, TransferWise, Funding Circle, Revolut, The Hut, Skyscanner, Fanduel, Oxford Nanopore, Benevolent.AI and Darktrace. DeepMind, acquired by Google in 2014, is a global leader in artificial intelligence and still based in London.
In total the UK has seen £42bn venture-backed exits between 2013 and 2017. Companies that have gone from startup to household names, with stock market listings worth billions of pounds in less than a decade, include Just Eat, Zoopla and Purplebricks. The proposed purchase of Zoopla by US investor Silver Lake for £2.2bn, announced last week, underlines the success and future potential of the UK’s digital tech businesses.
INTERNATIONAL COMPETITIVENESS The fourth report from Tech Nation on the state of the country’s digital tech sector reveals new data on the international competitiveness of the UK’s tech sector:A third of London’s businesses have foreign customers, surpassing the 30% 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% 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.
A visual representation of the UK’s global connections can be seen here: http://technationio.staging.wpengine.com/report18datavis/global-connectedness/
Comparison of the UK’s digital tech sector and that found in 20 international cities can be seen here: http://technationio.staging.wpengine.com/report18datavis/small-multiples/
TECH TOWNS AND SILICON SUBURBS The 2018 Tech Nation Report also reveals the rise of ‘silicon 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 smaller population centres are attracting more digital tech businesses, as the UK tech sector gets bigger.
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 startups. The towns are:
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.
DIVERSITY 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. However the dearth of women in the digital tech sector remains a factor, albeit one that is beginning to be addressed by activities to tackle the recruitment and retention of women.On average 72% of UK digital tech workers are over 35, challenging the stereotype that jobs in this sector are the preserve of millennials 15% of those in digital tech jobs are of black, Asian and ethnic minority (BAME) background, significantly higher than the 10% across all UK jobs Only 19% of the digital tech workforce is female, compared to 49% across all UK jobs.
COMMUNITY SURVEY & BREXIT In its 2018 report, Tech Nation conducted its biggest ever survey of people in digital tech with 3,428 responses. The qualitative research reveals that entrepreneurs, investors and founders in the tech sector face broadly the same challenges, regardless of their location:Access to talent is the most common challenge - affecting 83% of clusters Access to funding is a top 3 challenge in 49% of clusters Bad transport links are a top 3 challenge in 29% of clusters
The responses showed that Brexit is less significant for companies outside London, which historically have relied less heavily on overseas talent to fill job vacancies.The only places in which Brexit is cited as a top 3 challenge are Cambridge and London. Tech communities across the UK are highly optimistic about the growth prospects for digital tech companies in their local area, both in terms of scale and number of businesses
UK entrepreneurs are overwhelmingly optimistic about the future of the UK’s digital tech sector:Over 70% of respondents think the number of digital tech businesses in their local area will rise over the next 12 months And, over 90% think that the scale of digital tech businesses in their local area will either expand or stay the same
MEETUPS & EMERGING TECH The report reveals the ‘hidden underwiring’ that is powering the growth of the digital tech sector across the UK. These informal meetups provide clues to the areas of digital tech that are “hot” right now:Artificial intelligence is becoming more important - of the top 400 UK tech meetups with the largest membership nearly 16% 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 62000 members
Methodology: The Tech Nation 2018 Survey was conducted between 15 January 2018 and 2nd February 2018 in partnership with Streetbees. This year’s survey received the largest response yet from members of the UK tech community. In a total of 3,428 submissions, people told us about the opportunities and challenges their local ecosystems face, and the digital tech leaders they admire. The majority of respondents (33%) were founders and CEOs, followed by workers in tech companies (31%).
About Tech Nation: Tech Nation is the new organisation to help accelerate the growth of the digital tech sector across the UK. Launched in April it builds on the past work of Tech City UK and Tech North to make the UK the best place in the world to imagine, start and grow a digital tech business. Tech Nation is the UK network for ambitious digital tech entrepreneurs, empowering tech entrepreneurs to grow faster through knowledge and connections, to build a UK economy that is fit for the next generation. Our vision is to make the UK the best place to imagine, start and grow a digital business. We do this by running growth programmes, developing digital entrepreneurship skills through our online Digital Business Academy, through our visa scheme for exceptional talent and by championing the UK’s digital sector through data, stories and media campaigns. www.technation.io
TECH NATION ON TOUR The Tech Nation 2018 report, and the first Tech Nation on Tour event are launching this morning in London with Secretary of State for Digital, Culture, Media and Sport Matt Hancock. Tech Nation on Tour is a series of invitation-only events for founders, entrepreneurs, investors and tech ecosystem partners hosted across the country between now and October. More info at https://technation.io/events/
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CONTACT: Burlington.cc for Tech Nation
Antonella Scimemi, 07530 815 018
KEYWORD: UNITED KINGDOM EUROPE
INDUSTRY KEYWORD: TECHNOLOGY VENTURE CAPITAL INTERNET NETWORKS SOFTWARE SMALL BUSINESS MOBILE/WIRELESS PROFESSIONAL SERVICES CONSULTING FINANCE
SOURCE: Tech Nation
Copyright Business Wire 2018.
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