UK regions see tech start-up boom as US giants shrink

The big US technology giants might be shedding staff faster than you can say Jack Robinson, but the number of new UK tech firms is up by a fifth, with the regions seeing the biggest surge.

Based on data from Companies House, compiled by audit, tax and consulting firm RSM UK, the uptick in registrations of new firms is almost double that of 2020, when the Covid pandemic slowed numbers to 23,531. In 2022, there were 46,474 new tech companies created in Britain, up from 38,240 in 2021.

The strongest growth was seen in the East Midlands, which was 38% up on last year, followed by the East of England, up a quarter.

London witnessed a 21% increase, representing almost 25,000 new companies, but this was down 1% on the national average. Other major success stories were in the North and South West, at 29% and 28% respectively, while Yorkshire was up 30%.

RSM UK partner and analyst Ben Bilsland said: “Growth across all regions outside the capital is further evidence of the UK’s thriving tech industry.

“This crop of early-stage businesses will need support to scale. Access to funding will be crucial and the UK Government will need to ensure that UK tech is an attractive place for both domestic and overseas investment.

“For many young innovative companies, R&D tax incentives are crucial cash inflows. For many, the recent changes to UK R&D schemes that reduced the amounts small companies can claim were not seen as a positive step towards supporting the early-stage ecosystem.

“Innovation requires a world-class talent pool and UK tech will look to both education and immigration to build their workforces. Support from our universities and schools to build skills in STEM subjects and emergent areas such as AI will be essential. Clarity over immigration policy will be required to ensure a healthy inflow of tech talent to fuel growing companies.”

Recent figures from fintech industry body Innovate Finance exposed a major investment gap opening up in the UK, as late stage and seed stage jumped upwards, while funding for early growth stage rounds plunged 38% to $1.7bn and later stage deals fell 16% to $7.1bn.