The Tech Nation report, produced by Tech City UK, found that half of the country’s 47,200 digital companies saw revenues rise last year with 90 per cent expecting them to grow again in 2015.It said that turnover in the sector had grown by an average of 6 per cent per year between 2006 and 2013. The sector, which employs 1.46m people – 7.8 per cent of the UK workforce and mostly in London, Bristol and Bath – expects employment to grow 5.4 per cent by 2020, outperforming all other job categories. It said the number of digital businesses had grown 92 per cent in London between 2010 and 2013. Bournemouth, particularly in the ecommerce and games development sector, soared 212 per cent and Liverpool, led by software development, rose 119 per cent. Almost three quarters of digital firms are now based outside of London. Tech City UK, chaired by Joanna Shields, said 53 per cent more digital businesses were created in 2013 compared to 2010, a faster growth rate than the rest of UK businesses.
“The digital landscape is far greater than the capital alone. The digital sector is growing and creating jobs. The UK has the fastest growing economy in the G7 and the digital industry is at the heart of our growth story,” she said The report also highlighted the importance of the UK’s 23 so-called digital clusters with 77 per cent of digital firms saying they had a network of entrepreneurs with whom they could share ideas. A third said their clusters had helped them attract inward public and private investment. Gerard Grech, chief executive of Tech City UK, said: “Digital businesses are increasingly choosing to work near each other creating dynamic technology clusters up and down the country. They work best when they’re near other like-minded businesses, sharing resources, ideas and expertise.” Firms also raised concerns over growth challenges with a third stating that access to finance was a concern. The report said that more needed to be done to improve access to equity finance for digital businesses as well as European funding and “stimulating private funding by encouraging local high-net worth individuals, companies and angel investors”. A quarter of firms raised concerns about broadband speed and coverage with a third saying that a lack of local digital skills talent was one of the biggest barriers to growth. A lack of affordable office space and problems with transport infrastructure, particularly in Cambridge, Oxford and Norwich were seen as other hurdles. Prime minister David Cameron praised the report’s findings. “The digital economy has become an integral part of our country. Tech Nation shows the great innovation and thriving entrepreneurial spirit that is driving the sector forward across the country,” he said. Read more about technology in the UK:
- War of the Tech Cities: IT skills in demand across UK beyond London tech hub
- London top for startups, but has Berlin nipping at heels
- How far has UK come to close the gap on the US tech ecosystem?
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