Tech Nation Report 2020: Investment and employment boom for UK tech sector

An image of UK Tech, AI, Tech Nation Report 2020: Investment and employment boom for UK tech sector

Tech Nation, the growth platform for tech companies and leaders, has today announced the release of its annual Tech nation Report.

The report provides a comprehensive overview of the evolution of the UK’s tech ecosystem, exploring the drivers that underpin and power economic growth within the sector.

This year, the report explores the current state of the UK tech sector, how high value scaleups and tech unicorns are fuelling investment, which UK regions are competing on the international stage, and how the UK is leading the way on cutting-edge technologies. 

The Tech Nation report is proudly supported by partners Openreach and BNP Paribas Real Estate, who are pivotal in digital transformation through the provision of valuable infrastructure and in championing the UK tech sector. We would also like to thank our data partners Aon.Radford, Dealroom, Pitchbook, Crunchbase and Gsma. 

UK Tech sector growth 

2019 was an incredibly positive year for the UK tech sector. Compared to the rest of the UK economy, digital tech grew 6 times faster than any other industry (the digital tech sector contributed £149bn to the UK economy in 2018, accounting for 7.7% of UK GVA. This is nearly 6 times greater than growth across the economy as a whole, which increased by 1.4%).

Digital Tech GVA - graph
Source: Tech Nation 2020; DCMS 2020

In 2019 there were 2.9m people employed in the digital tech economy, an increase of 40% from 2017, with the digital tech economy now accounting for 9% of the national workforce compared to 7% two years ago.

Late stage scaling investment in the UK has boomed over the last year: Series C investment onwards grew by 71%, and Growth Equity (Private Equity) grew by 51%, indicating that the UK tech ecosystem is scaling and companies are ready to take on large sums to enable unicorn style growth.

In 2019, 81.2% of investment into UK tech went to scaling firms, compared to 80% in 2018. A ‘scaleup business’ is defined as a company which has seen average annualised growth of at least 20% over three years with 10 or more employees at the start of the period.

Fintech remains the UK’s largest tech investment sector with a 100% rise from 2018. 44% of Europe’s Fintech unicorns and companies valued between $250m and $800m are based in the UK.

UK Growth powered by High Value Scaleups across the country

The UK is home to 95 companies valued at between $250-$800m in 2019 – the most ever on record – which represents a 27% increase from 2018, and significantly more than the UK’s counterparts: France is home to (61) of these high value scaleups, Germany (46), and Israel (46). 

These companies are important as they represent the pipeline of companies that are already disrupting the UK’s tech ecosystem, and show trends and patterns in the development of the UK tech sector. To date these companies have raised £6.75bn and employ 17,475 people.

45% of high value scaleups are based outside of the capital, including in wejo based in Chester, Bybox based in Coventry and Crisp Thinking based in Leeds.

These companies are set to become the tech unicorns of the future. The UK is a world leader in producing tech unicorns – it’s 3rd in the world, behind only the US and China. The UK is home to 77 tech unicorns, tech companies valued at over $1bn, and 8 tech unicorns were created in 2019. 

UK Investment in Europe Perspective

UK companies secured a third of the £30.4bn of investment raised by tech companies during 2019 in Europe.

London generated record investment among European cities – £6.8bn in 2019, a 67% increase on 2018, followed by Berlin (£3.5bn), and Paris (£2.4bn).

25% of Europe’s top 20 highest investment tech cities are in the UK – Manchester, London, Bristol, Oxford and Cambridge. Furthermore, Manchester is the fastest growing European tech city, with an increase in investment of £48m to £181m from 2018 to 2019 – representing an increase of 277%.

An image of UK Tech, AI, Tech Nation Report 2020: Investment and employment boom for UK tech sector

UK Pioneering New Technologies & Leading in Value Driven Technology

In 2019, for every £1 invested into New Technologies (AI, robotics, cybersecurity, blockchain, IoT, virtual reality, and augmented reality) in Europe, 35 pence was invested into UK companies. 

  • Artificial Intelligence:
    • The UK is 3rd in the world for the level of AI investment. From 2015 to 2019 UK AI companies raised £3.2bn of global AI investment, meanwhile the US raised £32bn, and China raised £12bn
    • The UK is the only country of the top 5 AI nations to have demonstrated consistent positive year-on-year growth for the last 5 years
  • Cybersecurity
    • The cybersecurity big hitters are the US and China, closely followed by Israel and the UK.
    • The UK raised £7.8bn in cybersecurity investment from 2015 to 2019. The US and China continue to dominate with total investment of £17.5bn and £16.4bn from 2015 to 2019
  • Blockchain
    • The UK comes in fourth in the world for blockchain investment at £8.9bn of investment for 2015 to 2019. 
    • The US is third in the world for blockchain deals, at 249 compared to the US at 1,212 and China at 268
  • Healthtech 
    • £1.18bn raised by UK healthtech companies In 2019 –  accounting for 61% of the total European market (£1.93bn)

It’s not just new technologies that are driving change in the tech ecosystem, but also values. Purpose-driven UK tech companies are coming to the fore, with investment in UK tech companies addressing UN Sustainable Development Goals (SDG) almost doubling in the last year, from £1.59bn investment to £3.06bn. UK SDG aligned companies have raised more over the last six years than those in any other European country. 


An image of UK Tech, AI, Tech Nation Report 2020: Investment and employment boom for UK tech sector

Bekki Barnes

With 5 years’ experience in marketing, Bekki has knowledge in both B2B and B2C marketing. Bekki has worked with a wide range of brands, including local and national organisations.

AI alignment: teaching tech human language

Daniel Langkilde • 05th February 2024

However, Embodied AI refers to robots, virtual assistants or other intelligent systems that can interact with and learn from a physical environment. In order to do this, they’re built with sensors that can gather data from their surroundings, with this they also have AI systems that help them analyse data they collect, and ultimately learn...

CARMA announces acquisition of mmi Analytics

Jason Weekes • 01st February 2024

CARMA announces acquisition of mmi Analytics, expanding expertise in Beauty, Fashion, and Lifestyle sectors The combined organisation is set to redefine the landscape of media intelligence, providing unparalleled expertise and comprehensive insights for PR professional and marketers in the exciting world of beauty, fashion and lifestyle.

Managing Private Content Exposure Risk in 2024

Tim Freestone • 31st January 2024

Managing the privacy and compliance of sensitive content communications is getting more and more difficult for businesses. Cybercriminals continue to evolve their approaches, making it harder than ever to identify, stop, and mitigate the damages of malicious attacks. But, what are the key issues for IT admins to look out for in 2024?

Revolutionizing Ground Warfare Environment with Software-Enabled Armored Vehicles

Wind River • 31st January 2024

Armoured vehicles which are purpose-built for mission-critical operations are reliant on control systems that provide deterministic behaviour to meet hard real-time requirements, deliver extreme reliability, and meet rigorous security requirements against evolving threats. Wind River® has the partners and the expertise, a proven real-time operating system (RTOS), software lifecycle management techniques, and an extensive track...

The need to prove environmental accountability

Matt Tormollen • 31st January 2024

We are currently in the midst of one of the most consequential energy transitions since records began. The increasing availability of clean electrons has motivated businesses in the UK and beyond to think green. And for good reason. Being environmentally conscious attracts customers, appeases regulators, retains staff, and can even gain handouts from government. The...

Fuelling Innovation in Aftermarket

Jim Monaghan • 31st January 2024

One section of the motor trade is benefitting from the cost-of-living crisis: with consumers keeping their cars for longer, independent repairers are in huge demand. But they are also under pressure. Older cars need more repairs. They require more replacement parts, tyres and fluids. With car owners looking for value and a fast turn-around, independents...

The return of the five-day office week

Virgin Media • 25th January 2024

Virgin Media O2 Business has today published its inaugural Annual Movers Index, revealing four in ten companies are back to the office full time, despite widespread travel delays and disruptions With 2023 cementing the cost-of-living crisis, second hand shopping and public transport use surged as Brits sought to save money Using aggregated and anonymised UK...