A new report has revealed just how important the tech sector is to the UK economy, with Prime Minister Theresa May calling on “every entrepreneur, every innovator and every employer in the tech sector and beyond” to build on the success of the digital economy.
Take a bow UK digital economy, it seems that you are winning on all fronts. Salaries, jobs, and productivity are all booming, with the UK tech sector being hailed as a UK economy success story.
According to the Tech Nation 2017 report, the digital economy is growing at twice the rate of the wider economy and is creating highly skilled and well-paid jobs. So well-paid in fact, that UK tech workers are apparently paid 44% more on average than non-UK tech workers.
In an introduction to the report, Prime Minister Theresa May said: “Today more than 1.5 million people are already working within the digital sector, or in digital tech roles across other sectors, while the number of digital tech jobs across the UK has grown at
more than twice the rate of non-digital tech sectors. From analysts to web developers to software architects, these pioneers of our digital economy are at the forefront of a great British success story.”
Pledging to build on the success of the digital economy, the Prime Minister said that it was ever important in light of Brexit to seize new opportunities and support the digital tech sector.
“We will expand the scope of our digital tech industries, funding Artificial Intelligence, robotics, 5G, smart energy and more. We will broaden their reach across the UK, create new Institutes of Technology, and reinvigorate STEM and digital education to equip young people for the workplaces of the future,” said May.
The report from Tech City UK revealed that the average advertised salary for digital-tech jobs has now reached £50,663 a year, compared with £35,155 for the average non-digital salary. Since 2012 there has been a 13 per cent increase in the advertised salaries of digital tech posts, compared with only a 4 per cent rise in those of non-digital jobs.
“This Tech Nation report highlights the fantastic performance of the UK’s digital sectors which are driving growth across the whole country and creating well-paid and highly skilled jobs at twice the rate of other industries,” said Karen Bradley, Secretary of State for Culture, Media and Sport.
As for the number of jobs out there, well that’s also up. Between 2011 and 2015 the number of digital tech jobs across the UK grew by 17 per cent, which is more than twice the eight percent growth seen in non-digital sectors. The number of digital tech businesses being launched has also risen, up 42% in London alone over the last five years.
London, however, is not taking a monopoly on the jobs and investment front, with emerging tech hubs such as Sheffield, Sunderland and Brighton fueling growth alongside more established hubs in places such as Bath and Bristol. In fact, last year 68% of UK tech investment was recorded outside London, amounting to £4.6bn.
“We know from meeting entrepreneurs around the country that there are deep reserves of talent in tech clusters in the regions of the UK,” said Simon Calver, Partner at BGF Ventures.
“Support from national investors as well local and national politicians has a big role to play in helping these clusters reach their true potential. With longer term patient capital we are looking to support successful companies through their growth cycle and we are excited that the tech sector offers us many ways to do this, and right across the UK.”
The surge of jobs and salaries was also found to have a huge impact on productivity, with the Digital Economic Contribution, or Gross Value Added, of a digital tech worker in the UK now more than twice that of a non-digital worker. This worked out to £103,000 versus £50,000. This productivity gap is set to get ever bigger, with the gap having increased from £48,000 to £53,000 in the last five years.
The UK as a whole is also leading on the global stage when it comes to attracting talent, business and investment, with the report once again hailing the UK as the digital capital of Europe. Over the last 5 years, the UK attracted over £28bn of tech investment, followed by France at £11bn and Germany £9.3bn.
Job creation, investment, productivity and strong salary growth has in turn had a huge impact on the wider UK economy – with the numbers highlighting how tech has become so vital to the UK’s future. Especially in light of Brexit. The Digital tech contribution to the UK economy (GVA) is now worth £97bn, an increase of 30% in five years.
“Tech Nation 2017 shows how rapidly the UK’s tech innovation and productivity are gathering momentum. There are now significant tech hubs all over the UK, attracting both international investment and overseas talent. Tech careers now pay 44% more than the national average wage.
“These foundations will be crucial as we prepare to leave the EU. We need to maintain access to skilled workers while doubling down on home grown tech talent. And we need to think big. This report is all about working together on a common vision: the UK as a global leader in tech,” said Gerard Grech, CEO of Tech City UK.