Tech Nation yesterday released its annual State of the Nation report on UK tech, showing unprecedented growth. Phil Kemp, chief executive of Bruntwood SciTech, breaks down the findings and explains why, in these uncertain times, the UK’s tech industry is one of our guiding lights.
While there may be cause for concern for many industries and much of the country’s economy at the moment, yesterday’s Tech Nation Report 2020 showed that UK tech has never been in a stronger, more promising position.
The report found the UK tech industry is achieving unprecedented levels of success, with 2019 seeing a record-high £10.1 billion of investment across domestic tech companies and overall growth outperforming the UK’s economy by over six times.
This positions the UK’s tech industry as one of the best and brightest in the world – right when we need it most. As the country gets to grips with the current COVID-19 crisis, UK tech is going to play a pivotal role in finding solutions to a myriad of challenges, both in the UK and around the globe.
The report was dominated by surging global trends in AI, robotics, cybersecurity, blockchain, IoT, AR and VR. In the UK, the majority of investment last year (82%) went to scaleups: high-growth, high-productivity potential firms with more than ten employees and growing by at least 20% year on year.
Support for smaller independent firms is essential to ensure that the industry’s challenges are met with innovative and creative solutions. As Gerard Grech, chief executive at Tech Nation, says: “UK scale-up tech companies are offering radical solutions in extraordinary times.”
And where there’s investment, there are jobs. Over the previous two years, UK tech employment grew by 40% – an extra 2.93 million jobs – now accounting for 9% of the national workforce.
In terms of developing new digital tech, the UK was ranked third globally – behind only behemoths China and the US for its investment in AI. UK AI firms have received £3.2 billion of investment over the past four years.
Spread of investment
The investment and growth of the sector can be found right across the UK, not just concentrated in the capital. Manchester, Bristol, Oxford and Cambridge join London as five of Europe’s top 20 cities for tech investment, reflecting a regional reach that provides a much-needed boost to local economies.
Manchester is now the fastest-growing major tech cluster in Europe after investment jumped from £48 million in 2018 to £181 million in 2019, an increase in investment of over 270%.
Not only does this reflect the wealth of great talent now based in the City but also the extensive infrastructure, support and facilities available to support science and tech businesses to form, scale and grow.
Yorkshire and the Humber has long demonstrated strengths in Fintech and AI with legaltech rapidly becoming an area of strength for the region, with companies such as Rradar at the forefront of this.
The UK is leading the global fintech charge, with areas such as the Midlands performing strongly as a result of the inward investment into Birmingham by the likes of HSBC and Deutsche Bank, helping to create jobs and drive wage growth.
As we look ahead in uncertain times it is emerging hybrid sectors such as agritech, healthtech and cleantech - acting to reduce negative environmental impact that will be the game-changers of this new decade.