UK tech sector retains its crown as
#1 in Europe.
The UK tech sector is thriving and is rapidly becoming one of the best markets in the world for innovative products, services and startups. With access to a deep pool of talented, creative professionals and a vibrant business culture, the UK tech sector is driving innovation and growth in the country; providing some of the most advanced technology solutions on the market.
Whether it’s software, hardware, cloud computing or artificial intelligence, the UK is a great spot to develop ground-breaking products.
According to new figures from Dealroom for the Digital Economy Council, the UK tech sector ended last year as Europe’s leading digital ecosystem, retaining its position as the main global challenger to the US and China. The sector was able to maintain this position despite difficult international market conditions and due in large part to the country’s ability to leverage its deep science and technology base.
During the year 2022, UK rapidly growing tech companies continued to raise funds at near-record levels (£24 billion), which is more than France (£11.8 billion) and Germany (£9.1 billion) combined and brings the total amount raised over the past five years to a staggering £100 billion.
UK’s tech strength in numbers
- The UK has more high-growth tech companies than any other European region, with 144 unicorns and 237 futurecorns, and over 85,000 startups and scale-ups
- The UK is a leading destination for venture capital investment, with more investment than any other European country.
- The UK’s regulatory environment is conducive to digital innovation and competition, which in turn has attracted big global VC funds.
- The UK has eight cities with more than two unicorns, including Edinburgh, Nottingham and Oxford.
- Over 3 million people work in UK tech, with world-class companies training up a new generation of talent.
The UK tech economy is booming, and the latest figures from Dealroom underlines this continued success. With a rich talent pool of 3 million tech-centric employees up and down the country, the UK continues to be a major source of global innovation and is well on its way to becoming a European Silicon Valley.
Sustained investment has forged a global tech powerhouse
The UK tech industry hit a major milestone in 2022, reaching a value of $1 trillion. This makes it only the third country ever to hit this valuation, after the US and China and way ahead of its European peers. Worth more than double Germany’s ($467.2 billion) and three times more than France’s ($307.5 billion), the UK also leads when it comes to overall funding, unicorns and startups numbers.
With almost 400 high-growth startups since 2000, including 144 unicorns (companies with valuations of $1 billion or more) and 237 futurecorns (fast-growing companies which are predicted to be the most valuable businesses in the next few years) its clear too see that the UK startup ecosystem is booming. The new figures also showcase how rapidly the ecosystem is expanding, up from 116 unicorns and 204 futurecorns at the same time last year.
Laying foundations for value-driven growth
The UK’s success in developing a thriving tech ecosystem is due in part to its focus on combining innovation with standards and values. Earlier this year, the UK unveiled a new approach to regulating AI, based on principles such as safety, transparency, and fairness. This approach is less centralised than the EU’s, and reflects how AI is used in different sectors. The Chancellor also announced that the government will bring forward legal powers for the Digital Markets Unit to drive up competition and level the playing field for challenger tech firms. All of this creates the right environment for research, technology, and growth.
Focusing on the next generation
The UK’s European tech sector dominance is in part due to its culture of industry upskilling and reskilling coupled with a commitment to combining innovation with standards and values, but according to smarter job search engine Adzuna, UK companies are also increasingly hiring at entry-level and training people on the job.
Edtech startups have raised £1.7 billion in funding over the past five years, and they’re focused on helping people of all ages gain the skills they need to succeed in tech roles. From tech apprenticeships to coding, development and cyber security, there are plenty of opportunities for those who want to enter the tech field.
Taking the lead in impact
The UK continues to be a top destination for fintech investment, raising nearly £10 billion this year. But it’s also becoming a hub for impact tech companies that create solutions to reach the UN Sustainable Development Goals. There are nearly 1,200 such companies in the UK that have raised a record £3.12 billion this year.
Renewable energy receives the bulk of investment alongside scaleups tackling healthcare inequality and vertical farming companies that uses technology to grow food more sustainably. The steady influx of investment into impact tech means the sector now employs more than 53,500 people, up from 37,500 last year.
Regional strengths matter
There are now eight cities in the UK that are home to two or more unicorn companies, including Bristol, Cambridge, Edinburgh, Leeds, London, Manchester, Nottingham and Oxford. These companies are using cutting-edge science and technology to revolutionise industries such as finance, sustainable travel, health research and electronic device development.
Collectively, these cities are home to 112 unicorn businesses, which is more than France and Germany combined. This demonstrates the strong pipeline of global tech leaders being created in the UK and Cambridge was recently named the number one university in the world for producing successful tech founders, ahead of the likes of Harvard and MIT. Oxford came third with 410 alumni founders raising more than $10 million in funding. Bristol (173), Nottingham (100) and London (98) all made it into the top 20, thanks to their deep tech and science focuses.
Where are the next sources of global innovation?
This laser focus on tech development being pushed and cultivated throughout the UK business ecosystem, is attracting more and more international investors to expand their footprint in London (specifically) and the country as a whole, as they look to gain access to the growing network of entrepreneurs in the new Silicon Valley. This also follows on from another strong year of fundraising for UK-based funds, who have collectively raised £9.2 billion in 2022, up from £9 billion in 2021.
Helping you scale
If you’re a fast growing start up looking to add talent to help you scale, or an enterprise level business looking for a solution that allows you to flex up and down throughout the duration of the project, look at how Socium can assist.