The UK economy is in a strange place. Employment figures are at a record high, but overall growth remains sluggish. Rosier figures for the long-term health of the economy come along, then they’re downgraded. Small businesses are flourishing, but major high street retailers are going out of business on a weekly basis.
One clear and strong success story, however, is the UK tech industry. Showing amazing growth and proving attractive to investors, there seems to be no slowing the sector.
The Facts
Fresh figures from Tech Nation have echoed other sources in showing the tech industry is growing 2.6 times faster than the rest of the UK economy. In 2016, it was worth £170 billion, in 2018 this figure has grown to £184 billion. The report also showed that, outside of London, there are 16 ‘silicon suburb’ towns across the UK with a much higher than average tech employment rate, with towns like Bristol leading the way.
The report also underlined how fast tech firms in the UK are growing. UK GDP grew by 1.7 percent in 2016-17, but over the same period the tech sector grew by 4.5 percent. Alongside this was a five-times rise in the number of jobs in the tech industry, making it one of the healthiest and fastest growing employment sectors.
The Investment
All of this growth inspires, and in turn is fuelled by, a great deal of investment. International investors were particularly enthused by the UK tech industry, pouring money into firms in the hopes of finding the next Deliveroo or Zoopla. In 2016-17, British tech companies raised a total of £4.5 billion from venture capital sources, a doubling of the previous years total.
This could be, in no small part, due to the fact that many of the UK’s tech firms have an international reach and investors see great technology with an in-built global reach. A full third of London tech businesses, for example, have foreign clients, which outstrips the reach of California’s Silicon Valley. Domestic and foreign investors are seeing companies that have a bright future, very healthy growth and international reach. So, it should come as no surprise UK tech companies represent an attractive investment.
This has been shown in a number of high profile exits. Machesterfashion.com was sold for £750 million to a private equity investor and Leeds firm CallCredit was purchased for £1 billion. The incredible growth and underlying base for UK tech firms is providing fertile ground for firms with good ideas and the drive to succeed, with buyers and investors on hand to capitalise.
If you’re an ambitious tech firm, take a look at our business finance and capital investment options, we can help you get your hands on the money you need to move forwards in one of the most vibrant, successful sectors in the world.