The Rt Hon Theresa May, MP The Prime Minister
Today more than 1.5 million people are already working within the digital sector, or in digital tech roles across other sectors, while the number of digital tech jobs across the UK has grown at more than twice the rate of non-digital tech sectors. From analysts to web developers to software architects, these pioneers of our digital economy are at the forefront of a great British success story.Read More
Britain already leads the world when it comes to new technology. We make more contactless payments than anywhere else and we help to lead the way in everything from FinTech to Artificial Intelligence. We are natural innovators, eager to incorporate the latest innovations into our lives.
As Prime Minister I am determined that we will build on this success as we seize the opportunities that arise from leaving the EU and seek to build a bold new future for our country. That is why support for the digital tech sector is an important element of the government’s modern industrial strategy, helping to deliver a high-skilled, high paid Britain where opportunity is spread across every community, not just the traditional areas of London and the South East.
Through close co-operation between government and our tech industry we will help to ensure that Britain remains one of the most competitive places in the world to start and grow a tech business. We will expand the scope of our digital tech industries, funding Artificial Intelligence, robotics, 5G, smart energy and more. We will broaden their reach across the UK, create new Institutes of Technology, and reinvigorate STEM and digital education to equip young people for the workplaces of the future.
In doing so, we will also take an important step in helping to build a future in which everyone – from every background and every part of the country – has the skills and support to reach their full potential. Every entrepreneur, every innovator and every employer in the tech sector and beyond can play a huge part in this, helping to build a country that truly does work for everyone.
Eileen Burbidge, Chair Tech City UK
Gerard Grech, CEO Tech City UK
Welcome to Tech Nation 2017, a journey across the UK’s digital landscape that provides a data-rich analysis of Britain’s thriving digital economy and clusters.
In this, our third annual report, we shine the spotlight on the UK’s digital tech economy. We highlight innovation in every corner of the UK, from Bristol to Edinburgh, with over 60 company case studies. London continues to be an international digital powerhouse and its ripples are increasingly spreading throughout the nation.Read More
With over 1,000 data points, Tech Nation 2017 gives the clearest indication yet that the UK possesses unrivalled digital tech specialisms. The digital economy is growing twice as fast as the wider economy, with an economic output of close to £100 billion per year.
Tech City UK is optimistic about the future of the UK’s strong digital ecosystem. We’re proud of what we’ve achieved together. We work with entrepreneurs, investors, universities, accelerators and government policy-makers to help build a vision for our tech nation. The UK now has a tech industry that is the envy of Europe, a FinTech hub that is the envy of the world.
That being said, it is critical that we future proof what we have achieved so far. The recently announced digital strategy from the UK government is already setting us on the right path. Tech is at a critical juncture and as we head into the future we must reassure founders, investors, international talent, and our home-grown digital work-force that the UK is and will remain the best place to start and scale world-class digital businesses.
This year’s Tech Nation 2017 survey received the largest response yet from the UK tech community. We received more than 2,700 submissions, roughly half of them from CEOs. They told us about the achievements they’re celebrating and the challenges they face. They help us see what needs to be done to stay ahead in this global race.
Brexit will bring both challenges and opportunities; the two key drivers of growth are talent and investment. Our survey respondents were unequivocal: maintaining strong access to both is crucial as we propel ahead. We believe it can be done.
We would like to thank our Tech Nation Community Partners – over 220 of them, our board and advisory panel, the UK Government; from No 10 Downing Street to DCMS; and of course, Tech City UK – a team we are so proud to be part of. We hope you will join in celebrating the enormous successes showcased in Tech Nation 2017.
To produce this report we analysed more than 1,000 data points, over 2,700 survey responses from digital tech founders and employees and incorporated insights from over 220 community partners across the UK.
The findings are clear – when it comes to digital tech investment, talent and skills and digital collaboration the UK is a leader within Europe and on the international stage.
In 2016 the UK secured £6.8 billion in venture capital and private equity investment, that’s over 50% more than any other European country. Over the past five years London has attracted more investment than Paris, Berlin and Amsterdam combined.
|Country||Digital Tech Investment £bn (2016)|
Source: Pitchbook, Tech City UK, 2016
|Country||Number of universities in top 20|
Source: Times Higher Education World Varsity Rankings, 2016-17
In 2016 London hosted 22,000 tech related Meetup events – nearly three times as many as Berlin, Amsterdam or Paris. Interpersonal networking is critical to the UK’s success and the face-to-face networking that these Meetups enable is hugely important to the growth and success of digital businesses.
|City||Number of Tech Meetups (2016)|
Source: Meetup, 2016
The turnover of the UK digital tech industries was estimated at £170 billion in 2015. This is a growth rate of 22% (or £30 billion) in five years. Over the same period, the total number of UK digital tech businesses grew by 28%, more than twice as fast as non-digital businesses. In London, a new tech business is formed every hour.
|Year||Digital Business growth||Non Digital Business growth|
Source: BSD, Tech City UK, 2015
|Year||Number of Digital Tech Jobs (Millions)|
Source: BSD, Tech City UK, 2015
|Year||% of Digital Tech Investment in UK clusters (excl London)|
Source: Pitchbook, Tech City UK, 2016
Nearly 70% (68%) of total UK digital tech investment in 2016 was in regional clusters beyond London. Tech businesses in these clusters raised more than £4.6 billion in funding. Six clusters alone attracted nearly £700 million investment between them in 2016: Edinburgh (£159 million) Cambridge (£153 million), Bristol & Bath (£109 million), Oxford (£106 million), Manchester (£78 million), and Sheffield (£61 million).
Digital tech workers are helping to boost the wider UK economy through higher productivity levels per worker. The GVA of a digital tech worker is now 2X higher than a non-digital worker, (£103,000 compared to £50,000). This productivity gap has grown from £48,000 to £53,000 over the last five years – further evidence of the significant value that the digital tech sector is adding to the broader UK economy.
|Non Digital GVA per worker (£k)||Digital GVA per worker (£k)|
Source: ONS Annual Business Survey/ONS Business Structures Database