Tech Nation: UK Tech Expands at Faster Rate Than Wider Economy
16 TECH TOWNS THRIVE ACROSS THE COUNTRY
Growth underlines the UK’s ambition to be the best place in the world to start or build a digital tech business
- Tech expanding 2.6x faster than the rest of the UK economy
- Digital tech sector worth nearly £184bn to UK economy, up from £170bn in 2016
- The UK’s Silicon Suburbs and tech towns are booming with 16 towns showing a higher proportion of digital tech employment than the UK average
- Diversity in digital tech on improving trend: figures show more black, Asian and ethnic minority workers employed in tech than across the UK in general (15% v 10%)
- 72% of UK digital tech workers are over 35, in line with the whole UK workforce
- London ranks as second most connected place for tech on planet, after Silicon Valley
- London beats Silicon Valley when it comes to proportion of overseas customers
- Berlin is the only other European city in the top 10 list of global ecosystems
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.
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.