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A recent report by Tech Nation, a growth platform for tech companies, highlights proposals for the acceleration of the UK tech ecosystem. The report claims that “if the momentum gathered over the last decade is maintained”, the UK tech ecosystem will be worth $2.6 trillion by 2032. However, the UK tech ecosystem can grow to a value of $4 trillion by 2032 if actions are taken to “capture and retain value” within the national tech market.
UK competing in a global tech environment
Gerard Grech, Tech Nation Chief Executive, explains how after the “incredible success” of the last decade, “the UK is now third in the world for tech investment, after the US and China”. The UK regained this position in 2022, previously falling behind India.
According to the Department of Culture, Media, and Sport, the UK is a world leader in “emerging fields such as artificial intelligence, advanced semiconductor design and quantum computing”.
The Tech Nation report highlights how the UK is the “dominant player” in Europe, “with investment into startups and scale-ups remaining greater than investment into France and Germany combined”. However, across the next five years, the UK faces the competition of “India and emerging ecosystems like Indonesia and Mexico”.
There’s also competition coming from France, Italy and Sweden who were the “only countries to see positive investment growth after the record COVID bounce back year of 2021”.
The route to a $4 trillion tech ecosystem
To thrive amidst international competition, Tech Nation advocates the following approaches which will allow the UK to achieve its $4 trillion tech ecosystem potential. The company advises that start-ups should focus on investment “in all stages of company growth”, with investment not limited to the early stages of growth.
A total of $450 billion could be added to the UK tech ecosystem by “addressing current gaps in access to finance for UK startups and scaleups”. Tech Nation also advocates that “15 times the investment in deep tech and climate tech must be made by the end of the decade to stimulate and sustain growth”.
The founding of new unicorn companies – companies worth $1 billion-plus – has reduced “year on year for the last 18 months”. The 2022 unicorn creation rate was just 4 per cent, 10 times less than the 2022-2021 rate of 41 per cent. However, the “future unicorn ($250-800 million valued companies) numbers have risen with 45 per cent growth from 2021 to 2022”. This could mean that “the UK is effective at supporting companies to scale, but not to the high end of the value spectrum”.
Furthermore, the UK should focus on “opening access to opportunities in tech for all people”.
According to Tech Nation, “No European country achieves a proportion of 30 per cent of women in the tech workforce”. More broadly, the tech industry is characterised by a “gender gap” in positions of leadership. Whilst there have been small improvements in the representation of underrepresented ethnic groups, growth of inclusion has been less than 2 per cent over the previous five years.
In the UK, Edinburgh, Newcastle, and Cambridge lead the stats for the numbers of women in the tech workforce, with each above 30 per cent, compared to a 25 per cent approximate average across the rest of the UK.
Another prime focus should be on “value realisation” and “enabling high-value exits”, with “support for founders to realise value created by their companies”.
Over the next ten years, Tech Nation claims this can contribute $550 billion to the UK tech ecosystem. The report states that “capital and talent must continue to be efficiently recycled through the ecosystem to create additional value, and knowledge must be deepened and shared around late-stage growth”.
