Tech sector equipped to emerge strongly from pandemic

Figures compiled by entrepreneurial champion Tech Nation and Dealroom for the Digital Economy Council show that investors continue to back some of the UK’s most promising tech teams, despite the challenges posed by COVID-19.

And they reveal that Manchester remains in the vanguard of digital cities.

The latest figures published today (June 10) show that UK digital tech companies are continuing to attract investment, are still advertising vacancies and are optimistic that they can navigate the current crisis.

On measures including investment raised by companies and capital raised by investors, which will help sustain the sector for the long term, the UK outperforms all of its European neighbours.

Just as the 2008 financial crisis triggered an entrepreneurship boom in the UK, from which Silicon Roundabout’s cluster of start-ups has grown into a nationwide network of more than 35,000 businesses, the report demonstrates that UK tech is resilient and has deep foundations to emerge strongly from the crisis.

Tens of thousands of jobs were advertised in cities across the UK in 2019 and the start of 2020, with salaries continuing to grow well-above inflation in almost all regions.

The UK capital continues to lead the way and is now established as a global tech leader with London-based companies raising $4bn since the start of January, more than Paris, Stockholm, Berlin and Tel Aviv combined.

Fintech dominates fundraising in the capital, accounting for 39% of 2020 fundraisings. Enterprise software companies raised a fifth of the money invested in the first five months of the year.

UK tech now employs more than 2.93 million people across the country with salaries that are, on average, £10,000 higher than other sectors.

Salaries climbed between three per cent and nine per cent in most tech clusters in 2019.

Although London is still a key driver of digital tech jobs and growth – accounting for 53% of advertised roles in 2019 and offering the highest average salaries – tech hubs in Manchester, Bristol and Leeds are continuing to thrive, as evidenced by Bristol’s unicorn Graphcore which raised $150m in February, Partnerize of Newcastle raising $50m in January, ANNA Money of Cardiff raising $21m in May and Peak, of Manchester raising $11.8m in April.

Manchester continues to impress within the industry and is home to unicorn companies including The Hut Group, Boohoo.com, AutoTrader UK and On the Beach Holidays, as well as three future unicorns, UKFast, F2G and VST Enterprises.

In 2019, the city advertised 108,859 digital tech roles, making up more than 17% of jobs in the region.

And after London, Manchester had the highest number of digital tech jobs in the UK in 2019.

Figures show the median salary for tech roles in Manchester was seven per cent higher in 2019 compared with 2018 at £37,500, more than nine per cent higher than the median salary across all sectors in the city in 2019.

Gerard Grech, chief executive of Tech Nation, said: “Many businesses are adapting and innovating to support the fight against coronavirus, demonstrating the resilience and resourcefulness of the UK tech sector.

“Although we are seeing many tech companies closing key rounds of funding, the picture is being monitored closely at Tech Nation, especially across different parts of the country, where access to finance may not be as strong.

“These findings today confirm that the UK is well positioned to face the challenges that lie ahead and leave COVID-19 in a position of strength.”