Expert commentary by Gerard Grech, Chief Executive, Tech Nation
It remains too early to tell how widely the COVID-19 pandemic will impact the Technology sector. Early signs suggest that it has proven more resilient than others and there are widespread examples of how it has helped businesses in other sectors to be the same.
Clearly, the fact that tech solutions are increasingly driving growth in the private and public sector helps. The Digital Technology sector grew six times faster than the rest of the UK economy in 2019 and employs nearly three million people across the country. Over the coming years, businesses, consumers and governments will lean on tech solutions like never before.
But it is equally true that the UK tech ecosystem is built on strong foundations. The 2020 Tech Nation report delivered some of the most impressive investment figures UK tech has ever had. Last year, more than £10bn of inward investment was directed into the sector – amounting to more than a third of all tech investment into Europe. Year-on.year, the investment in the UK is higher than in any other country in Europe. And the gap is widening.
Further, there are a potential 95 businesses, based throughout the UK, that, with the right kind of support, are primed to become the tech unicorns of tomorrow. In fact, of the 220,000 tech companies in the UK, nearly 5,000 are classed as high-growth scaleups.
Venture capital invested in high-growth businesses is most effective when paired with the right kind of support and knowledge networks for scaling. This helps leaders to deliver the kind of agility and company culture needed to operate in a global, dynamic economy.
Over the coming years, scaleup know-how will be increasingly vital. Scaleups are where the smart money is – 82% of inward investment last year went to scaling firms, and in the difficult months and years ahead, this will be more important than ever, as scaleups are the businesses that will provide the substantive gross domestic product growth and create new jobs.
At a time when we know more than ever that we need a more productive economy, we must zero in on where the true growth lies – in the UK’s tech scaleups.