Building a bigger, better Britain
Commentary by Gerard Grech, CEO, Tech City UK
In a world of fast-changing political landscapes, it’s satisfying to know that one area of life is not simply going according to plan, but far better than one dared hope.
According to our Tech Nation 2016 report, the UK’s tech sector has gone from strength to strength, growing 32% faster than the rest of the economy, turning over £161bn and creating three times more jobs than the wider economy. According to an Organisation for Economic Co-operation and Development (OECD)/McKinsey report released in 2016, the UK’s digital share of the economy was reported at 10% – the highest in the world, 2% higher than the US and 5% more than the European Union (EU) average.
“Britain’s world-beating financial services industry is proving to be the ideal setting for a thriving FinTech sector”
Britain continues to be at the forefront of many tech developments. Driverless cars, the microchips behind smartphones, graphene, the Internet of Things, artificial intelligence, 3D printing, virtual reality and advanced robotics are all inventions in which UK-based companies and scientists play leading roles.
Our technology and science will continue to set the pace in the future because we have a phenomenal base from which to work. There are 170 universities in the UK, with six in the world’s top 30 and 91 in the top 1,000. We have three of the world’s top ten universities: Oxford University, Cambridge University and Imperial College. Our turnout of graduates is the highest in Europe. British universities produce more 5,000 new STEM PhDs per year.
The UK has some of the most favourable conditions in which to grow a tech business. Tax policies such as the Enterprise Investment Scheme and the Seed Enterprise Investment Scheme encourage investment in early-stage companies. Initiatives such as the Financial Conduct Authority (FCA) sandbox allow companies to innovate with minimum risk. Schemes such as Enterprise Management Incentives help companies attract and retain the most talented members of staff, with tax-advantaged discretionary share-option plans.
The London Stock Exchange is the world’s second-largest financial market by number of companies listed. Recent successes include payments firm Worldpay, which raised over $2.6bn, and cyber security firm Sophos, now worth over $1.6bn. Between 2011 and 2015 there were 22 tech IPOs on the London Stock Exchange, with average proceeds of $492mn.
And, of course, Britain’s world-beating financial services industry is proving to be the ideal setting for a thriving FinTech sector. Already, our exciting new FinTech market is estimated to be worth about £20bn in annual revenue. Government is right behind it, while Tech City UK recently committed to Her Majesty’s Treasury to launch an industry-led panel to drive FinTech-specific policy recommendations.
But what about Brexit, I hear some ask? Although aspects of life after the EU have yet to take shape, I detect a general feeling of cautious optimism as tech entrepreneurs survey the shifting landscape, which they are very used to. The digital mindset is nothing if not adaptable, and many founders I speak to are poised to leap on the possibilities offered by global access to trade, and talent and digital policies we can directly shape and influence. The future is what we make of it.