The United Kingdom will enter the new year as Europe’s leading tech hub, retaining its position as the biggest challenger to the US and China despite major economic challenges.
An astonishing $27.4 billion was raised across the UK this year according to new figures from Dealroom for the Digital Economy Council, more than double the £11.8 billion raised by France and £9.1 billion by Germany.
The Uk is home to 144 tech unicorns – companies valued over $1 billion – as well as 237 soonicorns and over 58 thousand startups, which combined employ over 3 million people across the country.
Recent growth across the British tech sector allowed it to reach the 1$ trillion valuation milestone earlier this year, making it the third country to ever do so after the US and China.
“The UK tech sector is in a very different place to where it was 10 years ago, Eileen Burbidge MBE, partner at Passion Capital and director at Fertifa explained, “with so many more start-ups, scale-ups, more entrepreneurs, more capital and greater enterprise value than ever before.”
Why the UK leads the way in tech
Great Britain has sat as the European hub for startup growth for some time now, with London’s influence as an economic and financial capital providing the ideal ecosystem for small tech companies with big ideas.
The country’s fast-increasing inflow of venture capital, paired with its skilled international talent pool, continues to attract entrepreneurs and small businesses from around the world.
“The UK has created some of the world’s most visionary founders, who have scaled impactful businesses across the world,” Stan Laurent, partner at Highland Europe told EU-Startups.
“The wider global tech ecosystem may be facing external challenges but we’re excited about the talent that we see coming into the UK startup sector and can’t wait to support the next generation of entrepreneurs as they attempt to become global leaders in their field.”
Britain’s attractive tech ecosystem allows it to remain the dominant country for multiple industries of the tech industry – from fintech investment to impact technology to Scaleups.
Meanwhile, an increasing number of British companies are hiring for entry-level tech roles to fill the ever-growing tech talent shortage according to the job search engine Adzuna.
This year 15,000 entry-level roles were advertised on the site compared to 6,596 in 2021, as companies seek to harbour a new generation of British tech talent and future business leaders.
But the UK boasts a broader range of factors that encourages growth and resilience. From a disruptive tech generation to the commitment to impact and regional growth, cities across the UK are producing tech success stories.
The future of the UK tech industry
Like most of the world, the UK finds itself faced with macroeconomic headwinds fuelled by rising inflation and a looming recession. For it to continue its pattern of growth, the UK will need to adapt to ensure its tech infrastructure remains competitive.
This adaptation may arrive with the introduction of new specialisms such as AI, robotics and health tech, which have recently begun to play more prominent roles within the UK tech ecosystem.
AI in particular shows great promise for the future of the British tech industry, with a recent study by WPI Economics suggesting that the UK will become the next AI superpower.
In a recent survey conducted by TechLondonAdvocates, 33% of respondents voted AI and robotics as the specialism that will most likely define the success of London in the next five years, ranking higher than London’s powerful fintech industry.
“AI is everywhere and underpins every sector from SME to the government to corporate,” Bindi Karia, innovation expert and adviser told TechLondonAdvocates. “It’s everywhere and I think London in particular is an absolute leader in that space.”
To read more about AI, visit our dedicated AI in the Enterprise Page
As the world’s reliance on the internet and interconnected devices skyrockets, the UK’s cybersecurity sector also shows promise. The need for cybersecurity solutions has never been more important, and the UK has the potential to meet the demand in the future as one of the world’s biggest innovators in the space.
With these sectors gaining noticeable momentum across the UK, the British tech industry of tomorrow is set to be even more successful than the industry of today, but tech firms must prepare for the challenges ahead for this to become a reality.
