Tech firms in London and the South East now account for more than half (55%) of the UK’s tech economy, according to analysis from accountancy and business advisory firm BDO LLP.
The technology industry in London and the South East was worth £47 billion in Gross Value Added (GVA) in the most recent year*, up from £37 billion five years ago. GVA measures an area’s contribution to the economy based on the value of the goods and services it produces in a particular industry.
Topping the list for tech sector contribution is Berkshire, which generated £8 billion in GVA in 2017 – the highest of 178 areas in the UK. Tech giants Oracle and Microsoft both have their UK headquarters in Thames Valley Park, outside of Reading in Berkshire. The M4 corridor, which links Slough, Newbury and Swindon, is a vital backbone of the UK’s tech industry.
The next four highest areas were all in London – Camden & the City, Westminster, Tower Hamlets and Haringey & Islington - which together account for 19% of the UK tech sector’s GVA.
Tony Spillett, National Head of Technology and Media at BDO, says: “London and the South East continues to lead the way in the growth of the UK’s buoyant tech industry. Established multinationals, such as Google, Microsoft and Amazon have created tens of thousands of jobs, drawing top talent to the region.
“The UK’s reputation as a centre of talent, innovation and creativity is a huge driving force behind our thriving technology industry. While London may act as the hub, we shouldn’t underestimate the spokes of tech stardom right across the UK. From Manchester and Liverpool to Cambridge and Birmingham, it’s important we unleash the growth potential of the tech industry right across the UK.”
Scotland, Wales and Northern Ireland lag behind
While tech is booming in England, technology industries in Scotland, Wales and Northern Ireland are lagging behind.
Together they contributed £6.8 billion to the UK’s £85.5 billion GVA total – a figure lower than that of Berkshire alone.
Tony Spillett adds: “Every corner of the UK contributes to our position as a global tech leader. However, perhaps more than any other segment of the economy, the tech sector relies on a pool of future talent.
“The majority of tech firms I speak to believe the UK education system as a whole is failing to prioritise STEM subjects, despite a sustained government drive to increase take-up of these subjects at higher levels. The government and industry both need to keep banging the drum for more relevant education and training.”
* Year-end December 31 2017 (latest data available). Source: Office for National Statistics
** Tech Nation report 2018
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