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United Kingdom digital technology sector still outpacing the rest of the economy

17 May 2018

A big focus in the UK's tech future is the rise of so-called tech towns and silicon suburbs - areas of the country not normally associated with techology that are having a significant impact on technology growth.

The UK's digital technology sector is growing 2.6-times faster than the rest of the UK economy and is now worth nearly GBP 184 billion, up from GBP 170 billion in 2016, according to the 2018 Tech Nation Report. This had a knock-on positive impact for recruitment in the sector, with the organisation revealing jobs in digital tech growing five times faster than any other sector in the UK.

Turnover of digital tech companies grew by 4.5 per cent between 2016-17 compared to UK GDP which grew by 1.7 per cent over the same period, according to official figures compiled by Tech Nation.

The report found that 2017 proved to be an awesome year for the United Kingdom digital tech sector with some of the biggest fundraisings and exits seen in years, as global investors flocked to fund UK-based firms.

In total, the United Kingdom has seen £42bn venture-backed exits between 2013 and 2017. In fact, according to the report, tech communities across the United Kingdom are highly optimistic about the growth prospects for digital tech companies in their local area, both in terms of scale and number of businesses.

This means that the tech sector grew at 2.6 times faster than the rest of the economy.

These smaller population centres are attracting more digital tech businesses just as the whole United Kingdom tech sector widens the growth gap between itself and other sectors.

There are 16 towns in the United Kingdom with higher levels of tech employment as a proportion of employment. They are Newbury, Reading, Basingstoke, Burnley, Slough and Heathrow, Livingston, Stevenage and Welwyn Garden City, Guildford and Aldershot, High Wycombe and Aylesbury, Southend, Enniskillen, Telford, Cheltenham, Stafford, Huntingdon and Swindon.

The report also shows how the United Kingdom is succeeding in establishing itself as a leading tech hub.

The cities are Portsmouth, Bristol, Cambridge, Southampton, Oxford, York, Salisbury and Bath.

Tech Nation's 2018 report also reveals that the digital sector's workforce is older than commonly perceived and more ethnically mixed than the average United Kingdom workplace.

The stereotype that tech is the territory of millennials is also misplaced as 72% of United Kingdom digital tech workers are, on average, over 35. On a more positive note, on average, 15% of those in digital tech jobs are of black, Asian and ethnic minority (BAME) backgrounds, compared with the 10% average across all United Kingdom jobs.

Two years ago there was no sector more vocal in its opposition to Brexit than the UK's tech community. Only 19pc of the digital tech workforce is female, compared to 49pc across all United Kingdom jobs.

Despite the tech sector (in London especially) campaigning heavily for the United Kingdom not to leave the European Union, the report indicated that the United Kingdom tech sector is confident about its prospects post-Brexit. In general, tech communities across the United Kingdom appear optimistic for their growth prospects. Over 70% of respondents think the number of digital tech businesses in their local area will rise over the next 12 months and over 90% think that the scale of digital tech businesses in their local area will either expand or stay the same. Access a funding was a top 3 challenge in 49% of clusters and bad transport links were also cited.

But many in the United Kingdom digital tech sector are concerned that leaving the European Union will do lasting damage to the United Kingdom tech sector unless the right trading relationship with the European Union is struck.

Unveiling its 2018 research, Tech Nation said the progress reinforced the UK's ambition to be the best place in the world to start or build a digital tech business.

"Our world-leading tech firms are growing fast and creating the high-skilled, high-paying jobs of the future". A quarter of the world's entrepreneurs say that they have a significant relationship with two or more people in London.

"This is a huge success story for the United Kingdom but we also want to make sure that the benefits of the digital tech boom are reaching every corner of the United Kingdom, so that we can build a Tech Nation that works for everyone", he added.

It was easy to see why: the tech sector, particularly in London, relies heavily on overseas-born talent.

United Kingdom digital technology sector still outpacing the rest of the economy