Tech Nation, a scaleup-network for UK entrepreneurs, has today announced the release of its annual Tech Nation Report with data from partners including Companies House, PitchBook, GitHub, the OECD and Streetbees, and in association with the World Economic Forum.
The report provides a comprehensive look into the evolution of the UK’s tech ecosystem, exploring the drivers that underpin and power economic growth within the sector.
For the first time, the report explores the wider international landscape, looking specifically at international and national tech investment, areas of potential growth and related specialisms, talent hubs and more.
The UK tech sector performed particularly well in investment last year. In 2018, the UK managed to attract 5% of global high-tech scaleup investment, placing it fourth in the world – ahead of Germany, France and Sweden.
Investment for UK high-growth digital tech firms also grew 61% between 2017 and 2018 – driven in large part by ambitious UK tech scaleups (tech scaleups delivered the majority of all tech investments in the UK in 2018 – £5bn of £6.3bn).
The UK’s strongest tech sub-sector, and where it currently ranks as number one in the world, is fintech, with investment in UK high-growth fintech firms achieving £4.5bn between 2015 and 2018.
London continues to remain the UK’s leader in attracting high-growth tech investment, receiving £9bn from 2015 to 2018. Cambridge is second, at £583m, with other UK cities continuing to make considerable ground.
Looking beyond high-growth tech companies, the last 12 years have seen a much greater distribution of investment across the UK.
Notably, the East of England has seen the greatest increase in capital invested across all tech companies, at 206%, followed by the West Midlands (54%) and Yorkshire and the Humber (51%).
In 2018 the UK continued to remain a hotbed for tech talent, employing 5% of all high-growth tech workers globally. This places the UK ahead of Japan, France and Indonesia.
In the UK, Insurtech and Fintech were the biggest employers among high-growth digital tech firms in 2018, employing 24% and 18% of the high-growth workforce respectively.
Cyber, AI, and Cleantech all feature in the top ten sectors for employment in high-growth tech firms. Investment data shows that AI, Cyber and Big Data are growing in importance for UK tech scaleups. This means that the UK may be about to see more jobs generated in these sectors.
R&D expenditure in the UK in 2016 represented 1.67% of gross domestic product (GDP).
Businesses and government have put significant financial resources towards the development of a knowledge-based economy. Based on the most recent data from 2016, the UK was ranked 7th globally for R&D expenditure, with spending up £1.4bn to £33.1bn, an increase of 4.3%. This is above the long-term annual average increase of 4.1% since 1990.
UK Prime Minister, Rt Hon Theresa May MP, commented: ‘‘The UK is a global tech powerhouse. I am immensely proud of our country’s ambitious tech scaleups. These companies are delivering significant economic value to the nation through the investment they raise, the jobs they create and the innovative products and services they deliver’’.