Tech Nation has recently released its report for 2021 (The future of UK tech built) on the state of the tech industry here in the UK. Considering the massive disruptions caused by COVID and Brexit, it paints a surprisingly upbeat view of the UK Tech sector and its future. Here are some of the highlights:
- The Tech industry’s contribution to the UK economy is currently £149bn and increasing
- Jobs in the digital economy have grown by 50% over the last 15 years, reaching 2.98mn
The Tech industry is becoming ever more import to the UK economy in terms of both GDP and jobs. The UK is increasingly recognised as a centre of excellence for healthcare, wellness and climate tech hubs, driven by the pandemic and energy security concerns. These markets are building skills in artificial intelligence (AI), augmented and virtual reality (AR/VR) and advanced computing.
The Investment Landscape
- UK Venture Capital investment hit a high of £15bn, ranking it third globally behind China and the US
- The UK Tech sector remains an attractive prospect for international investors with 63% of investments in UK tach coming from overseas
- Series B and C investment is rising however, investment in seed stage companies is decreasing as a proportion of overall investment
- Investment in the southeast has increased by a factor of four
Investment in Tech companies continue to grow at impressive rates and the UK is maintaining its position on the global landscape. However, there is a worrying trend towards fewer, large, late-stage investments and a corresponding reduction in seed stage investment. If this is a trend that persists it could lead to a drying up of the pipeline of emerging Tech companies and the series B and C rounds of the future. Investment trends have historically shift around though, so there may well be a shift back to early-stage companies in the coming years as opportunities there emerge.
The Tech Sector
- The UK Tech startup and scale-up ecosystem is valued at $585bn – 120% more than in 2017
- Investment showing signs of moving away from FinTech with investment in transport increasing by 160%, energy 20% and security by 66%
- The number of UK Tech Unicorns has grown by 13, reaching a total of 80
- Investment in health and wellness tech has more than tripled to reach $1.54bn
- Investment in climate and agriculture has grown to $798bn
The UK Tech industry continues to grow at pace and is becoming more diverse. In the past there has been a focus on FinTech, but as a result of the pandemic and climate change the transport, healthcare, wellness and climate sectors are now receiving considerable attention and is a sector in which the UK excels.
The Tech Nation report shows that UK has been successful in building a globally competitive Tech sector that leverages the UKs traditional expertise in science and technology. Although the signs are good the challenge will be to maintain that leadership position and as a global Tech player.