Expert commentary by Gerard Grech, Chief Executive, Tech Nation
As the UK expands its reach on the global stage, the sector that we can confidently predict will help propel us forward is our world-leading tech. Across the UK, our tech start-ups and scaleups are pioneering ideas and businesses that will shape how we live, work and play for decades to come.
The Tech Nation 2019 Report – in association with the World Economic Forum and with data from Companies House, GitHub, StreetBees, DealRoom and PitchBook – shows that the UK is punching well above its weight internationally. To date, an impressive 35% of European tech businesses valued at $1bn or over (known as unicorns) were created here in the UK. In addition, the UK now has six cities which have produced at least two unicorns each, including Cambridge and Manchester.
But the report’s most exciting finding by far shows Britain stepping up to the scaleup challenge.
UK tech has long been at the forefront of innovative start-ups. We’re brilliant at conceiving and building game-changing businesses. We lead Europe’s investment in new tech businesses, with over £6bn of start-up investment in 2018.
Scaling and growing a tech business is not the same as starting it from scratch. Managing the step up from a founding team in a co-working space to an international enterprise with global partners and alliances – that is something else. It requires a bold mindset prepared to think not just locally and linearly, but globally.
Our report shows that the shift is already happening. The UK now ranks fourth in the world for attracting scaleup investment, after the US, China and India. Scaleup tech investment is 2.5 times higher than expected based on the relative size of the UK economy in 2018.
From December 2018 to February 2019, high-growth firms in London grew by over 56%, faster than anywhere else in the world. And between 2017 and 2018, investment in high-growth digital tech firms shot up by 61% – largely driven by ambitious UK tech scaleups.
The growth in scaleup investment is especially striking in Fintech, where the UK ranks number one in the world (generating £4.5bn in funding between 2015 and 2018). Ambitious bank and investment scaleups such as OakNorth, Monzo, Starling and Revolut are already becoming global household names.
Scaling-up is good news for jobs. The UK is a hotbed for tech talent, employing 5% of the world’s high-growth tech workers, ahead of Japan, France and Sweden. Investment data shows that AI and big data are increasingly prevalent in the scaleup story.
While London is naturally a hub for global investment and talent, scaleup success across the UK is crucial as we compete globally. For the first time, the team at Tech Nation examined data from scaleup investment in cities across the world over a specific period of time.
For example, for a period of time in 2018 and early 2019, Oxford attracted the same amount of scaleup investment as Paris. Similar investment patterns were found between Reading and Philadelphia, while Manchester attracted comparable levels of scaleup investment as Budapest.
It’s time to raise our game even further, building not only national networks, but also international ecosystems around the world. International clusters could allow us to fire up opportunities anywhere from Austin to Singapore. As UK tech scales up, it’s time to keep our digital vision global and exponential.
To find out more about tech scaleups, visit technation.io