BY Richard Summerfield
The tech sector has enjoyed a meteoric rise in recent years. Developments such as the Internet of Things, Big Data and the Cloud have become key features of the modern corporate landscape.
In the UK, the tech sector is booming. Over the last five years 45,000 new technology firms have been created in the UK, equivalent to one new firm ever hour, according to a new report from KPMG. Though London and the South East have remained the most popular locations for tech sector development, surprisingly a large portion of the growth has been spread throughout the UK. Sixty-three local authorities achieved double digit growth in the number of tech enterprises over the last 12 months. Fifteen of the fastest growing local authorities were found within the capital, including Hackney, Newham, Islington, Camden, Bexley, Havering, Waltham Forest, and Barking and Dagenham.
The past six years have seen steady growth in job creation within the UK’s technology space. That said, 2015 saw a slowdown, hitting the lowest level in two and a half years in Q3 2015, with profitability falling for the first time since Q1 2013. Nevertheless, the long-term trend is positive.
“We can therefore be justly proud of the Tech scene and be optimistic for the future of what must be a key sector for the UK,” said Tudor Aw, KPMG’s Technology Sector Head. “It is important however, that more be done to help ensure the continued growth of the sector, particularly around STEM subject education, regulatory and fiscal conditions, and last but not least, profile within the media to highlight the importance and success of the sector."
The UK’s primary tech cluster remains in Reading. More than one-in-five enterprises (22 percent) based there are tech sector firms, which is almost three times the national average of 8 percent. Throughout the last 12 months, Warwick has seen the fastest increase at 28 percent, followed by Hackney at 25 percent increase and Rotherham at 21 percent.
Clusters of tech sector specialisation seem to be forming around the country. The South Cambridgeshire cluster, for example, is notable for biotech ; while Nuneaton & Bedworth is renowned for automotive-related tech. The City of London is, unsurprisingly, the focal point for FinTech development.
Optimism surrounding the industry remains high. Fifty-four percent of respondents to KPMG’s survey anticipate a rise in business activity over the next 12 months, while only 7 percent predict a decline.
Report: KPMG Tech Monitor UK