Is the UK a breeding ground for pioneering tech start-ups?
Tech City UK CEO Gerard Grech makes a case for the UK being a fertile tech eco-system and reveals his hopes for the future of tech...
This week, Gerard Grech, CEO of Tech City UK, sung the praises of both London and the wider UK technology scene as well as its future potential, during a talk to celebrate London Technology Week.
Speaking at the Tech talent: Developing our future event, Grech highlighted several ways in which digital businesses are having a “disproportionately positive impact” on the economy and touched on the rising number of tech funds, support networks and more.
Alongside future-gazing about what the UK’s tech industry could become, here are Grech’s thoughts on why the UK is becoming a breeding ground for the best and brightest tech start-ups…
Digital businesses and the economy
The UK tech economy has been growing rapidly over the last few years. In fact, according to Tech City statistics, it grew up to 32% faster than the wider UK economy between 2010 and 2014.
Responsible for this stellar growth are the 60,000 digital businesses Tech City has identified in the UK, which it estimates generated more than £161bn a year.
Highlighting the role of the UK for European tech, Grech revealed that 40% of European ‘unicorns’ – digital businesses valued at £1bn or more – are based in the UK such as TransferWise, Blippar and Farfetch.
The four key drivers of growth
Grech identified four key factors that are driving growth in the UK economy:
The first was smart capital – “not just capital, smart capital”. Grech explained that an increasing number of entrepreneurs are thinking intelligently about where they secure their investment from and asking questions such as:
“Who is giving me this money? Have they got the connections to help me grow and scale my company?”
Grech said that the UK attracts more than 30% of all European venture capital (VC) investment, having raised more than £1.2bn from 36 rounds in the last 20 months. Additionally, there have been more tech funds created in the last two years than the last 10 years put together, with several of these founded by entrepreneurs who “have had the operational expertise in building a business”.
The next key driver of growth was the UK’s business and policy environment and Grech pointed to policies and initiatives such as the Seed Enterprise Investment Scheme (SEIS), research & development tax credits, the entrepreneurs visa and low corporation tax – “good conditions create great companies” Grech concluded.
Thirdly, Grech noted that the UK eco-system has completely changed over the last few years, developing into a rich end-to-end eco-system that offers a plethora of support for tech start-ups throughout their lifecycle. From policies, to universities, to institutions, as well as the 140 co-working spaces and over 60 accelerators; “there are so many companies and organisations helping entrepreneurs grow their businesses”.
Finally, Grech suggested that the fourth key driver is talent because “if there’s no talent there’s no investment”.
In February, Tech City’s Tech Nation 2016 report found that there were 1.56 million people employed in the UK tech sector, 41% of whom are working in non-digital industries and “transforming these industries to become a lot more productive”.
This rate of job creation was 2.8 times faster than the rest of the economy, with the average tech salary 36% higher than the national average at £50,000. “The [talent] pool is deep and extensive”, added Grech.
Looking ahead: Six ways tech will transform life, business and the global economy
Grech concluded his talk by revealing the six areas of tech that the UK excels in, and that he believes will have the most significant impact on our life over the next five to 10 years.
These were the following:
- Mobile internet apps – More and more Britons are choosing to use their mobiles for everyday tasks over desktops and laptops. Grech said: “It’s estimated that we use our phone over 100 times a day.”
- Artificial intelligence – As computers become increasingly intelligent, they become better able to perform tasks beyond the capability of humans. Grech said: “As more and more data gets created, we’re going to have to start thinking about how we interpret that data […] We as humans can only do so much, we need computers to tell us how to do this stuff. We need to be curious, which is something that computers cannot yet be.”
- Internet of Things – Our lives and everyday objects are becoming ever more entangled with the digital world. Grech said: “Cambridge has got deep expertise with connected devices if you look at its history. ARM, a great company worth over $10bn, powers over 95% of our smartphones, and has been doing so for over 10 years.”
- Cloud computing – With exponential amounts of digital data produced every day, it’s becoming increasingly important to store, process and make sense of it. Grech said: “Everything’s going mobile, in the cloud”
- Automation of knowledge – Knowledge is a valuable currency in the digital world and advances in artificial intelligence, machine learning and data collection are making it easier to automate many knowledge-based tasks that previously would have been impossible for computers to perform.
- Autonomous vehicles – The potential of this technology to streamline costs across many sectors is huge. Grech said: “The UK is at the forefront of this with the US and South Korea.”