UK tech sector rocketing past rest of economy
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 per cent between 2016-17 compared to UK GDP which grew by 1.7 per cent 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 not only highlights the underlying strength of our digital economy but also emphasises its huge potential,” said Digital Secretary Matt Hancock (pictured below).
“Our world-leading tech firms are growing fast and creating the high-skilled, high-paying jobs of the future. They are a hotbed of innovation, creativity and entrepreneurial spirit.
“This is a huge success story, and we are working hard to make sure the benefits of digital technology reach every corner of the country as we build a Britain that is fit for the future.”
Tech Nation 2018 is published by Tech Nation, a new voice for the UK’s fast-growing digital tech sector.
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.
The report found that 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, which is almost double the previous year.
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, Revolut, The Hut, Skyscanner, Fanduel, Benevolent.AI and Darktrace.
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 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 start-ups and tech businesses.
These smaller population centres are attracting more digital tech businesses, just as the whole UK tech sector widens the growth gap between itself and other sectors.
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 start-ups.
They are Newbury, Reading, Basingstoke, Burnley, Slough and Heathrow, Livingston, Stevenage and Welwyn Garden City, Guildford and Aldershot, High Wycombe and Aylesbury, Southend, Enniskillen,Telford, Cheltenham, Stafford, Huntingdon and Swindon.
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.