The Growth of the UK Tech Sector (& What It Means For Our Skill Market and Job Competition)
Whilst there’s no doubt the pandemic has been a setback for millions of businesses and industries across the planet, there is one reason to celebrate: the UK tech sector saw astronomical growth.
According to Tech Nation’s Detailed Industry Report (which we’ll refer to a lot in this article), Deep Tech investment in the UK rose by 17% throughout 2020 - the highest rate of growth globally. Not only that, but we can boast being “more attractive to international investors than ever; [with] 63% of investment into UK tech coming from overseas.” Currently, we’re third in the world for our high focus on impact tech - with investment increasing 160% from 2018 alone, compared to 15% in the US from the same period.
Tech Nation also discovered that our startup and scaleup ecosystem is valued at $585 billion - 120% more than 2017, and more than double the next ecosystem (Germany), which sits at $219 billion. This certainly alludes to further advancements in the future, and shows that our digital landscape and developing “Internet of Things” has only been concreted by changes in working environments these last few years.
How has the UK become a Tech Hub?
Last year, Tech Nation attributed 3 million job roles to the UK’s digital tech economy - increasing by 40% over the last 2 years. There’s no doubt that our industry is booming, but how have we become the internationally recognised hub for improving technologies?
Technology Investment: Many countries are internationally recognised for their contributions (and specialization) to different industries. For example, China is known for its manufacturing industry. Science and technology have a long history in the UK, with high venture capital directed into UK technology companies.
Innovation and Seizing Opportunities: Did you know that the UK created the world’s first technology visa? Our investment into R&D for technologies created huge potential for global talent attraction, allowing us to dominate the market and remain a global leader through top tech professionals working in our industry.
International Approach:The UK has managed to sustain its market by keeping EdTech, GovTech,and other international tech brands close to home. “London is the undisputed tech capital of Europe and today’s figures offer further proof that London remains a leading global tech hub for investors.” Khan quoted in UK Tech News, “With world-class universities and a diverse international talent pool, London is a centre for creative energy and innovation.”
Why does the UK receive high levels of foreign investment?
As Santander Trade stated, “one of the main strengths of the UK economy in attracting FDI is that its economy is one of the most liberal in Europe, and its business environment is extremely favourable.” Reports showed that the UK is ranked 8th in the World Bank’s “2020 Doing Business Guide''. This shows that our developed economy and advanced infrastructure has lead to improved technology access - allowing our industry to become a world leader, where
London is the fourth city for tech VC investment globally ($10.6 billion), only sitting behind Francisco, Beijing, and New York.
What does this mean for the future of the UK tech industry?
If a pandemic can’t stop our growth - nothing can.
The UK tech industry has certainly shown its resilience these past few years, and a sudden reliance on internet access for business and personal communications has helped sustain tech growth for years to come. “Prior to the COVID-19 pandemic, the UK was already seeing a slow growth in the number of employees working from home. [This jumped] from 5% to around 46.6%.” (Source: UK Parliament). With employees across the world needing new software solutions to remote work, SaaS boomed to a value of $9,903.8 million with annual growth predicted at 10.99%.
82.9% of the UK’s population own mobile phones, and 88% have - at a minimum - access to a household computer. UK businesses were driven by lockdowns to rapidly move online, where online retail saw a 37% increase, over 6 times that of 2019, a reporter at The Drum calculated. The increasing Internet of Things allowed for “business continuity” (Source: Vodafone), and goes to show how vital technology infrastructure is to day-to-day operations in the UK.
“The UK’s tech success is the result of foresight, drive, and dynamism. The strong and growing tech ecosystem we have nurtured over the years is delivering stellar results. I believe that this is just the beginning of what the UK can achieve.” - Gerad Grech, CEO of Tech Nation.
How will UK tech growth impact our skill market and job competitiveness?
With a growing industry, comes a growing demand for talent.
High investment into new start-ups will result in increased market competition, and the ability for skilled candidates to negotiate for higher-paid roles and better benefits. As shown by Tech Nation’s report, advertised tech roles grew 36% as of June 2020, outweighing France by 1.9 times and Spain 1.6 times.
On the other hand, with an increase in job availability comes an increase in entrants - as evidenced by the average of 43 applicants per tech job, versus 21 for non-tech roles (Source: ICIMS Insights). This could mean that skilled or experienced candidates might be drowned out by the noise in the market, and will need to either pick up extra qualifications or perfect their networking to help their application stand out.
Tech employees looking for new job roles would be best advised to reach out to recruiters directly, in order to gain an advantage throughout the competitive recruitment vetting processes.
Read Tech Nation's full 2021 report: Tech Nation Report 2021 - Tech Nation
At Forward Role, we’ve seen a vast expansion in our technology team and we’re always looking for candidates wanting to be connected to dynamic job roles. If you’ve been searching for new and exciting employment opportunities, we’d love to help. Or, if you’re looking to grow your technology function, get in touch with us.