The UK’s digital tech ecosystem

What makes a digital tech economy successful? Capital and talent, yes, but also accelerators, affordable co-working spaces and experienced mentors.

The face-to-face networking that these enable is hugely important to the growth and success of digital businesses.

Digital tech innovation across the country is helping to strengthen local economies and make the UK’s business environment even more dynamic and productive.

Tech Nation 2017 profiled 30 digital tech clusters across the UK. These clusters are the building blocks of the UK’s digital tech economy.

Digital Tech Density Digital Tech Turnover (£bn) Turnover Growth (2011 -15) High Growth Businesses
Reading
7.26
London
£56bn
Dundee
171%
Bournemouth & Poole (26%)
Bristol & Bath 4.35 Reading
£12.5bn
London
106%
Newcastle
(22%)
Cambridge
1.79
Bristol & Bath
£8.1bn
Sunderland
101%
London
(20%)
Southampton 1.57 Manchester
£2.9bn
Bristol & Bath
87%
Glasgow
(19%)
Oxford
1.53
Cambridge
£2.1bn
Edinburgh
85%
Brighton
(18%)

Source: ABS / BSD, Tech City UK, 2015. Based on turnover per worker (ABS / BSD, 2015)

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Average UK Cluster Performance (2011 – 2015) 

Performance
Digital Tech GVA 93%
Digital Tech Jobs 93%
Digital Turnover 89%
Digital Tech Productivity 60%

Source: ABS / BSD, Tech City UK, 2015. Based on turnover per worker (ABS / BSD, 2015)

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Meetup, an online portal that facilitates networking, also generates data which can be used to indicate the strength of networks within Europe’s digital tech hubs.

In 2016 nearly 22,000 tech Meetups took place in London. That is nearly three times more than in Berlin, Amsterdam or Paris.

Meetups in European digital tech hubs

City Number of Tech Meetups (2016)
London 21866
Berlin 7963
Amsterdam 7915
Paris 7581
Oslo 3490
Zurich 3373
Barcelona 3286
Madrid 3225
Munich  3012

Source: Meetup, 2016

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The greatest number of Meetups outside of London were in Bristol & Bath, followed by Reading and Cambridge.

Meetups in UK clusters

City Number of Tech Meetups (2016)
London 21866
Bristol & Bath  3909
Reading  3600
Cambridge 2698
Manchester 2192
Worcester & Malvern 1899
Bournemouth & Poole 1394

Source: Meetup, 2016

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The largest concentration of JavaScript, PHP, Python and Java MeetUps all took place in Bristol & Bath, indicating that this cluster is a networking powerhouse.

When we asked digital tech businesses across the UK which aspects of their local ecosystem they used, the three most popular responses were: mentoring, brand building activities (awards, for example) and co-working spaces.

Only 15% of the digital tech businesses we surveyed had made no use at all of local support systems, highlighting just how important they have become. Intriguingly however, the services that digital tech businesses use are not always those they claim to value most highly. As the analysis below shows, while incubator and accelerator services are valued highly, take-up for their services remains relatively low, suggesting that more could be done to promote and support them.

Source: Tech Nation 2017 survey

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City Digital Infrastructure as a business challenge (%)
Glasgow  55%
Dundee  45%
Brighton 42%
Norwich 42%
Ipswich 38%
Worcester & Malvern 38%
Liverpool 36%
Sheffield 33%

Source: Tech Nation 2017 survey

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Over a quarter (28%) of digital tech community members cited poor digital infrastructure as a business challenge.

Perhaps surprisingly, this is not an exclusively rural issue. In fact, some of the highest proportions of dissatisfaction were in large cities such as Glasgow (where 55% say it is a challenge), Dundee (45%) and Brighton (42%).

The clusters which performed best on this rating were Sunderland and Nottingham where only 9% and 11% of businesses cited digital infrastructure as a business challenge.

 

 

On local transport infrastructure cities performed better than rural areas.

While over a third (36%) of respondents rated their local transport infrastructure as good, ratings tended to be higher in larger conurbations.

Source: Tech Nation 2017 survey

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In our survey, we asked members of each cluster to rate the strength of their local digital tech economy. Just over 50% rated it as ‘strong’.

In Bristol & Bath, Bournemouth & Poole and Brighton this figure rose to around 90%.

At the opposite end of the spectrum, the figure fell to only 25% in Leicester, 31% in Birmingham and 35% in Southampton.

 

City Strength of local digital economy
Bristol & Bath 90%
Bourenmouth & Poole  89%
Brighton 88%
Cambridge 86%
Edinburgh 78%
Dundee 75%
London 72%

Source: Tech Nation 2017 survey

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City Digital Infrastructure as a business challenge (%)
Cambridge  95%
Brighton 92%
Leeds 92%
Edinburgh  92%
Bournemouth & Poole  91%
Bristol & Bath 88%
Dundee  86%
Manchester 85%
Glasgow 81%

Source: Tech Nation 2017 survey

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There was an overwhelmingly positive response when we asked respondents to rate their cluster’s potential for growth.

Over 75% rated theirs as ‘good’, while just 8% described it as ‘poor’. Those in Cambridge have the sunniest outlook, (95% saying that growth potential is ‘good’), while at 92% the mood is almost as upbeat in Brighton, Leeds and Edinburgh

These are reasonably encouraging findings, though they do indicate significant regional variation when it comes to perceptions of the progress made in digital tech.

 

Get the full Tech Nation 2017 Report

The most comprehensive view of the UK digital tech economy and ecosystem, from Tech City UK.