Tech Nation’s 2021 report shows a resilient UK tech sector despite Brexit and the pandemic
Despite a difficult backdrop with the end of the Brexit transition period, social distancing, and multiple lockdowns brought on by the pandemic, the tech sector has proven resilient by managing to grow despite the unprecedented circumstances.
The UK tech sector raised the third highest amount of venture capital (VC) investment in the world (behind only the United States and China), investment in deep technologies, such as AI, blockchain, and Quantum computing have risen, and the UK’s relative attractiveness for investment improved.
Emerging tech trends included an increase in the prominence of edtech, CreatTech, healthtech, and climate and agricultural tech. Future areas of tech sector growth included Mobility Tech, TravelTech, FoodTech, InsurTech, and a continued prioritisation of investment in tech innovation.
Over the course of 2020, the number of unique tech jobs advertised in the UK outweighed that of key European countries by 259% on average.
The report also found that the pandemic has changes the public’s relationship with technology. 66% of people reported having changed how they use tech, with the biggest increases coming in greater tech use for communication to help combat loneliness, to socialise, to help with working from home or for remote learning, and entertainment.
Some key stats and highlights from the report include:
- The UK’s venture capital (VC) investment is third in the world, behind only the United States and China, hitting a record high of £15 billion in 2020.
- Deep tech investment was up 17% in 2020, the highest rate of growth anywhere in the world.
- The UK is proving attractive to investment, with overseas investment increasing from 50% in 2016 to 63% in 2020.
- Impact tech investment is fast growing in the UK, increasing 160% since 2018, compared to the US, where it grew 15% during the same period.
- London ranks fourth in the world for tech VC investment, behind San Francisco, Beijing, and New York.
- The UK’s start-up and scale-up ecosystem is valued at more than £585 billion, more than double that of Germany, the next most valuable ecosystem, and an increase of more than 120% from 2017.
- Investment in seed stage companies is falling as a proportion of tech VC investment—14% to 6% over the past five years—and series B and C investment is rising.
- The tech sector’s steady growth in the rate of GVA contribution to the wider UK economy continues, averaging 7% per year since 2016.
Overall, the report shows that despite a hugely challenging year, technology and the UK tech sector has played a major role in helping the UK to adapt to the impacts of the pandemic while also helping to support economic growth and employment. As we turn to the recovery, ensuring we continue to get the right legislative and regulatory framework to support the continued growth of the UK tech sector will be vital not only for our economy, but also to build a more resilient, productive, and green economy.