UK tech sector retains #1 spot in Europe and #3 in the world as sector resilience drives continued growth | Popgen Tech

• Drawing on the country’s deep science and technology base, the UK is leading the way as a leading ecosystem for responsible and value-led innovation
• More than 3 million people work in UK technology with world-class companies training a new generation of talent

According to new figures from Dealroom for the Digital Economy Council, the UK tech sector will end the year as Europe’s leading ecosystem, maintaining its position as the main challenger to the US and China amid a global backdrop of difficult economic conditions.

During 2022, fast-growing UK tech companies continued to raise at near-record levels (£24bn), more than France (£11.8bn) and Germany (£9.1bn) combined. This takes the total raised over the past five years to almost $100bn (£97bn).

Further statistics today show that the UK has:

• More high-growth companies than European peers created 144 unicorns and 237 future corns and more than 85,000 start-ups and scale-ups
• More venture capital investment than European peers
• A forward-thinking approach to regulation that encourages digital innovation and competition
• Attracted VC funds from around the world including General Catalyst, Sequoia and Lightspeed
• Eight cities with more than two unicorns, including Edinburgh, Nottingham and Oxford

The latest figures, compiled by Dealroom for the Digital Economy Council, underline the success of the UK tech economy and its progress as a source of global innovation – a European Silicon Valley. These elements are leading the expansion of its technology ecosystem, which now employs 3 million people, across the country.

Sustained investment and growth has formed a global technological powerhouse

Consistent growth across UK technology saw the industry hit the $1 trillion in value milestone earlier this year, making it only the third country ever to achieve this valuation after the US and China. This means the UK tech industry is ahead of its European peers and is more than double the value of Germany ($467.2 billion) and three times that of France ($307.5 billion) as well as maintaining the lead when it comes to overall funding, unicorn and startup numbers.

This has enabled the UK to produce nearly 400 high-growth start-ups (worth over $250 million) since 2000. That includes 144 unicorns — companies with valuations of $1 billion or more — and 237 future corns, fast-growing companies expected to be the most valuable businesses in the next few years. The new figures show how the ecosystem is expanding, up from 116 unicorns and 204 future corns at the same time last year.

Lay the foundation for value-driven growth

Part of the UK’s strength in creating such a wide-ranging and extensive technological ecosystem is due to its focus on combining innovation with standards and values. Earlier this year, the UK unveiled a new approach to regulating AI – based on core principles such as safety, transparency and fairness – to take a less centralized approach than the EU to reflect how AI is used in their sectors. The chancellor also announced that the government would bring forward statutory powers for the Digital Markets Unit to promote competition and level the playing field for challenger technology firms. It all goes to creating the right environment to drive research, technology and growth forward.

Introducing new generations to technology

Upskilling and reskilling has become a key part of the UK’s dominance in tech, with almost 3,000 edtech start-ups raising a combined £1.7 billion in funding over the past five years. Companies like Academy, Code First Girls, Immersive Labs and Multiverse are focused on enabling people of all ages to gain the skills they need to succeed in technology roles, from technical apprenticeships to coding, development and cyber security.

According to smarter job search engine Adzuna, UK companies are increasingly hiring for entry-level tech roles, up from 6,596 in November last year to more than 15,000 this year, as they seek to bring in a new generation of tech talent and develop them into future leaders.

Take the lead in impact

While the UK remains the dominant country outside the US for fintech investment (almost £10bn raised this year), it is also becoming a leading hub for impact tech – companies creating technology solutions to deliver the UN’s Sustainable Development Goals reach. There are almost 1,200 impact technology companies in the UK which have raised £3.12 billion in funding this year, ahead of last year’s record £3 billion.

Green energy receives the bulk of the investment, such as Newcleo, a start-up developing technology to enable safe uranium recycling (£258m). Scaleups tackling healthcare inequality, such as Cera bringing technological innovation to social care, raised £263m, while GrowUp Farms, a vertical farming company that uses technology to grow food more sustainably, raised £100m. The steady inflow of investments into impact technology means that the sector now employs more than 53,500 people, compared to 37,500 last year.

Regional strengths make the difference

Innovation is spreading across the country with eight cities now home to two or more unicorn companies, including Bristol, Cambridge, Edinburgh, Leeds, London, Manchester, Nottingham and Oxford. These high-growth businesses use decades of science and technology research and development to transform areas such as finance (Interactive Investor – democratization of investing), sustainable travel (Vertical Aviation – electrically powered aircraft), health research (Oxford Nanopore – wearable DNA) . sequencing) and electronic device development (CSR – semiconductors).

Combined, these cities are home to 112 unicorn businesses, more than France (36) and Germany (63) combined – demonstrating the strong pipeline of global tech leaders being created up and down the UK. In fact, Cambridge was recently named the number one university in the world for producing successful tech founders ahead of the likes of Harvard and MIT – with more than 500 alumni founders who have raised more than $10 million in funding. Oxford came third with 410. Bristol (173), Nottingham (100) and London (98) all made it into the top 20, thanks to their deep technology and science focus.

To find the following sources of global innovation

It is also what attracts international investors to expand their footprint in London and the UK to access the growing network of entrepreneurs in the new Silicon Valley. US investors including General Catalyst, Sequoia and Lightspeed have increased their teams in the UK in 2022 after opening new offices here last year, and global firm New Enterprise Associates hired its first UK-based partner in October. While European investor Earlybird VC opened a new office in London earlier this year. It follows another strong year of fundraising for UK-based funds, which collectively raised £9.2bn this year, up from £9bn at the same time in 2021.

Digital Minister Paul Scully said:

British technology remained resilient in the face of global challenges and we ended the year as one of the world’s leading destinations for digital businesses. This is good news and reflects our pro-innovation approach to technology regulation, continued support for start-ups and ambition to boost people’s digital skills.

END

Notes to editors:

• Investment data from Dealroom correct as of Thursday 8 December 2022
• London is now the top tech ecosystem outside the US through a combination of factors including early-stage, breakout and late-stage funding, university talent, patents and unicorns and $1bn-plus exits, according to Dealroom. This is ahead of other major cities including Paris, Tel Aviv and Beijing

About DEC:

The Digital Economy Council is a non-statutory advisory committee of independent members set up to provide advice to the government. Its aim is to harness the expertise of industry and the wider technology community to develop a world-leading digital economy that works for everyone.

About Dealroom:

Dealroom.co is the leading data provider on startups, growth companies and technology ecosystems in Europe and around the world. Founded in Amsterdam in 2013, Dealroom.co works closely with many of the world’s most prominent investors, entrepreneurs and government organizations to provide transparency, analysis and insights into startup and venture capital activities.

About Adzuna:

Adzuna is a smarter, more transparent job search engine used by tens of millions of visitors per month. We love using the awesome power of technology to bring every job together in one place, help people match better, more fulfilling jobs and keep Britain working.

Adzuna provides real-time data to the Number 10 Dashboard, the Cabinet Office and Office for National Statistics labor market indices. In 2018, Adzuna won the contract to manage Find a job, one of the UK government’s most used online services.

Adzuna.co.uk was founded in 2011 by Andrew Hunter and Doug Monro, formerly of eBay, Gumtree, Qype and Zoopla and is backed by leading Venture Capital firms LocalGlobe, Index Ventures and Smedvig Capital.

We’ve spent a decade developing smarter, more transparent job searches so job seekers worldwide (we’re in 20 countries) can land the right role faster.