London tech boom transforming UK into tech nation
The UK is slowly becoming a nation of digital companies led along by the boom in London.
The UK is already well known for having one of the world’s strongest digital economies with a number of specialisms that range from artificial intelligence to video games development.
Digital companies have long been entrenched in the nation’s capital but now it seems they are starting to find toeholds outside of London. A recent report from Tech City UK illustrates the rapid rise in this sector in key cities across Britain.
It seems that some 1.46 million people in the UK work in the digital and technology sectors, which accounts for around 7.5 per cent of the entire workforce. Moreover, tech is the fastest growing occupation category in the UK as digital employment is forecast to grow 5.4 per cent by 2020.
“The UK’s digital economy is thriving. Venture capital investment in London’s tech companies alone is 20 times what it was five years ago,” said Gerard Grech, chief executive officer of Tech City UK.
Top five digital clusters based on job volume
The figures highlight that the region with the most jobs in the digital sector is Inner London - over 250,000 - but despite this 74 per cent of all firms are actually based outside of London.
Bristol & Bath’s region has the second-largest volume of jobs (61,653), third-largest is in Greater Manchester (56,145), Reading comes in fourth (54,527) and fifth-largest is found in Leeds (44,951).
However, when looking at the number of jobs per square kilometer, Brighton actually has the highest concentration of digital jobs in the UK, with a density that is 3.3 times the national average.
Clustering provides tangible benefits
It seems that digital companies tend to cluster together to build a network of relationships with other entrepreneurs for a variety of reasons.
Firstly this allows companies in a regional cluster to share experiences and ideas.
Secondly it makes it easier to build regional reputation and attract talent.
The third reason for clustering is that it allows similar minded companies to find appropriate and affordable property - such as co-working spaces and science parks.
Lastly, around a third of businesses believe that their cluster helps to attract inward investment from private and public bodies.
Best performing clusters
Looking at the report’s analysis on clusters based on growth and turnover we can see that London again loses the pole position to other regions in the UK.
It turns out that Bournemouth is the fastest growing cluster in the UK, as new companies that were founded in 2010 have grown by 212 per cent. Liverpool took second place as firms based there showed growth of 119 per cent and Inner London came in third as its new firms only grew by 92 per cent since 2010.
On a company turnover basis, Greater Manchester took the top spot, with revenue growth of 74 per cent over five years. Inner London was even further down the list in fourth place, with revenue growth of 42 per cent since 2010.
“Cities as diverse as Cardiff and Newcastle now boast growing digital tech economies,” said Gerard Grech.
“Now is the right time to shine the spotlight on this exciting network of digital clusters, and map out the prospects for professionals and investors.”
The UK’s digital sector is no longer restricted to the UK and it might even be wise for entrepreneurs to consider alternative locations to London when starting their business. It shows that Britain will remain at the forefront of tech for some time and this will help further boost the UK’s economic recovery.