The Covid fuelled surge in digital transformation, including the huge uptake of ecommerce, video-conferencing and customer data platforms, has pushed the UK tech sector to the “Dr Evil” famed one trillion dollars, joining only the US and China in achieving the valuation.
Data by Dealroom analysed for the UK’s Digital Economy Council reveals that the UK sector is now worth more than double that of Germany’s, and almost five times larger than France and Sweden.
The rapid rise in value for the UK tech sector can be, in a large part, attributed to a wave of tech adoption during the Covid-19 pandemic, with the fastest period of growth taking place between 2020 and 2021, when the ecosystem increased by 42% in revenue.
Platforms aiding the remote operations of firms across the country, and across all industries, have since become mainstream, aiding the surge of company valuations, and the UK tech ecosystem into a new league.
Announcing the figures ahead of the West Midlands Tech Review in Birmingham, Digital Minister Chris Philp said: “Our tech industry has gone from strength to strength, overtaking the rest of Europe and entering the history books as the third country ever to reach this milestone.
“We’re working hard to make the UK the best place in the world to found, grow or float tech businesses – whether they’re early-stage startups or global innovators – ensuring they have the best talent, investment and regulation to thrive.
“Every corner of the country has contributed to the sector’s success including the West Midlands, whose digital ecosystem is set to keep growing by at least £2.7bn by 2025 and create 52,000 additional jobs.”
Tech Nation chief executive Gerard Grech added: “This is a watershed moment for UK tech. The industry has gone through difficult global challenges and come out stronger than ever.
“Ten years ago people said there weren’t enough start-ups in the UK. Five years ago people said there weren’t enough scale-ups. Every day, innovative and experimental tech companies are being launched across the UK that will grow into the next generation of unicorns and decacorns, and we at Tech Nation are committed to supporting and fuelling these high-potential businesses across the whole country.”
Dealroom founder and CEO Yoram Wijngaarde commented: “The explosion in VC investment started by the pandemic amid the overwhelming demand for digital services for healthcare, education and food delivery has helped spur on this growth but the foundations were laid long before 2020.
“As companies and investors grapple with the global challenges of 2022, from the Russia-Ukraine war to the ongoing supply chain crisis and the cost of living rises, it’ll be interesting to see how tech ecosystems like the UK’s adapt and adjust.”
In February, the Government revealed that the UK cyber security industry alone generated a total of £10.1bn in revenue in 2021, a 14% rise from the year before.
Meanwhile, a study of UK bosses by digital agency Studio Graphene predicted that UK firms which were forced to tighten their belts due to the pandemic will make huge investments in digital transformation, splashing the cash on new tools, new tech and new staff.
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