Key Findings: Tech Nation Report 2020

Each year the Tech Nation Report monitors the growth of the UK technology sector, providing information and commentary on the opportunities and challenges associated. Estimates suggest that the UK digital technology economy alone accounts for $11.5 trillion globally, or 15.5% of global GDP, employing over 2.9m people in the UK, it is one of the fastest-growing ecosystems in the world.

Here, Ashley Wheeler CEO of HdE Group takes a quick and close look at the key findings from the 2020 report:

  • No.1 the UK is Europe’s top scaling tech nation, and is increasing its lead in the world

81.2% of UK tech investment was made into high-growth, high-productivity potential scaleup firms – those with at least 10 employees and growing by at least 20% year on year.

This trend can be largely expected, as a maturing and more confident ecosystem leads to larger, older and more developed companies raising later rounds of investment. Just a few years ago so-called ‘megarounds’ of investment of over $100m were almost unheard of in the UK, where now they are common place.

  • £10.1bn Investment into UK tech companies in 2019 – a record

The UK is third in the world for tech investment for another year running, behind only the US and China, and raising more than France and Germany combined. The rate of investment growth made into the UK has accelerated relative to European counterparts, from a decrease of 17% in 2018, to a rise of 44% in 2019. The investment made into the UK is now more than that made into Germany and France combined.

  • 95 Companies valued at $250-$800m in the UK in 2019, a 27% increase from 2018

The number of “future unicorns” – companies valued between $250m and $800m – rose by 27% to 95 in 2019, showing that the pipeline of prospective billion dollar-valued firms is healthy and growing.

There were 95 of these high-value scaleups in the UK in 2019, including companies like Atom Bank in the North East of England, Depop in London and Crisp Thinking in Yorkshire. 45% of the UK’s high-value scaleups are based outside of London – a positive sign that all nations and regions in the UK are building a pipeline of global tech leaders.

  • Manchester, London, Bristol, Oxford and Cambridge are among Europe’s top 20 cities for tech investment

Bristol is one of the top destinations in the world for venture capital (VC) investment. The city-region received $500million in VC funding last year – ahead of Dublin, Copenhagen, Helsinki and Milan. Nationally, the UK is already a major winner in the tech sector, with a record £10.1bn invested in 2019 (up 44% year on year). Five of Europe’s top 20 destinations for investment – London, Cambridge, Bristol, Edinburgh and Oxford – contribute to the UK having the largest investment share of any European country.

Bristol is home to one of the UK’s largest and most connected tech networks, TechSPARK.
  • The UK is 3rd in the world for tech unicorns behind only the US and China, with 77 companies valued at over $1bn

8 tech unicorns – companies valued at over $1bn – were created in the UK in 2019, bringing the UK’s total count to 77 since 1990. Two proudly headquartered in Bristol with Ovo Energy and Graphcore recently making unicorn status.

  • +44% UK tech investment grew to a record £10.1bn in 2019

Fuelled by increasing levels of tech investment, the UK tech sector’s GVA or Gross Value Added contribution is now growing six times faster than that of the wider economy. Digital tech contributed £149bn in GVA in 2018, accounting for 7.7% of the UK economy. Over the last eight years, digital tech sector GVA has increased by 43%, from £104.2bn in 2010 to £149bn in 2018.

  • UK tech employment grew by 40% in the last 2 years, now accounting for 9% of the UK workforce with 2.93m jobs 

Employment in the digital tech economy has rocketed over the last two years. Nationally there has been a +150% increase in demand for roles within the digital technology sector over the past 4 years (2015-2018). Across the UK, Data scientist, Data engineer, analyst and full-stack engineer have been in higher demand over the last year in comparison to 2015-2017. But if we look at other tech occupations, such as Software developer, we see that employer demand has risen by >1% in the past 4 years. As of 2018, Software Developer role accounts for almost 6% of all digital and tech roles.

Source: Tech Nation Report 2020.