The UK tech sector is booming. New figures released by the government’s Digital Economy Council show that the industry grew by 1000% between 2010 and 2020.
It now has over 96 ‘unicorns’ (private companies valued at over $1bn), collectively worth £333bn, compared with just eight in 2010. Britain is also home to 139 more potential unicorns, valued at least $250m each, a third of Europe’s total. This rate of growth has cemented the UK’s position as Europe’s tech leader and is driving it to close the gap with places such as Silicon Valley and Beijing. Research by KPMG has found that the tech industry's optimism about prospects for the next year is at its highest since 2014. Unsurprisingly, all of this is excellent news for hiring in the sector. Vacancies are at their highest since 2016, hitting 132,000 in a single week during May, according to the Digital Economic Council. Tech and IT roles now account for 12% of all job vacancies in the UK.
So why is this happening? Generally, the British economy is trending upwards and markets are bullish, but what is it about the tech industry in particular that is fuelling such strong growth and demand for hiring? Read on to find out!
Venture capital investment
One key element of tech industry growth has been the increasing availability of venture capital funds, going from £1.2bn in 2010 to £11.3bn last year, higher than France and Germany combined. Growth in venture capital investment has increased by over 40% for the third year in a row. The UK is behind only the US and China in attracting venture capital funds, and now exceeds the US for foreign investment per capita.
While the overall effect of coronavirus on the British economy was undoubtedly negative, many tech companies benefitted enormously from the market shifts that occurred and resulting increased tech demand from both consumers and businesses. E-commerce sales, for example, rose significantly, now accounting for more than 30% of total retail sales in the UK. Digital healthcare has exploded, with use of the NHS app rising by 912% over the past year. Many of these trends will outlast the pandemic, and as the UK economy returns to health, customer and client pools will continue to expand for tech companies, fuelling the industry’s current optimism.
Expansion out of London
One of the major effects of COVID-19 was, of course, the mass shift to working from home. Tech companies are no stranger to this, and in fact the industry was already leading this trend pre-pandemic. Switching to remote working has clear benefits for companies, including the ability to hire from a larger talent pool and reduce expenditure on expensive offices. But tech presence outside of London is not limited to employees of London-based businesses, or even regional offices of large tech companies. Cities such as Manchester, Bristol and Cambridge all have thriving local tech industries. Manchester tech companies attracted $687m of venture capital funding in 2019, making it the fastest growing tech city in Europe, while tech recently overtook engineering to become Bristol’s number one industry.
The January transition out of the EU may have been bumpy (to say the least), but six months down the line, uncertainty is easing, one of the reasons for the industry’s current overwhelmingly optimistic outlook. Dubious handling of Brexit aside, the government has long been a staunch supporter of the tech industry, recognising its economic potential. It has funded several initiatives to develop AI skills and research, for example, and is currently reviewing listing laws as it looks to attract companies with one eye on an IPO. In February, the Chancellor announced a new, taxpayer-backed investment fund aimed at tech start-ups, seeking to support UK firms through their early stages, which are typically loss-heavy and R&D-orientated, thereby avoiding their sale to a foreign company before reaching maturity.
Whether you are a potential client or a prospective candidate, the current strength of the tech sector represents opportunity. Camino Search works with cutting-edge businesses to place finance talent into their back-offices. With more vacancies than ever, competition has never been fiercer over the highest-calibre candidates. We can use our valuable network to find your next position, or fill that role in your team with a sharp, reliable hire who will prove to be a real asset. Get in touch today: