By Michael O’Sullivan
It’s the end of the world as we know it! To coin a phrase from both ‘The Thick of It’ and originally from a famous
Bangles REM song. But unfortunately, this seems to be the mood around Westminster and all over the country. As a nation we have become bearish, and this is largely due to Brexit, May’s abhorrent leadership, the divisions ripping our country apart and the fact that it’s now winter, cold, dark and now far past Xmas to be ever excited again. The fear of a crashing pound, mass unemployment and another looming recession are all too common.
The Leave and Remain Brexit camps are both forced to paint the very worst versions of our future, assuming their idea of Brexit (including no Brexit at all) is not the outcome. But there can be optimism, thankfully the UKs is blessed with a vibrant, secure, expanding and crucially, not affected by Brexit, digital tech sector.
Given the uncertainly since the Brexit vote in June 2016 the economy stuttered, exhibiting negligible growth. However, two years on, London has cemented its position as a global tech leader, with only the home of digital tech; Silicon Vallery ahead. In fact, since the Brexit vote the digital economy has added £14bn to its value, expanding from £170bn to £184bn, this is despite/due/no thanks to Brexit. The rate of expansion is impressive, 2.6%, which makes digital tech the fastest growing sector in the UK. London’s digital tech sector is a shining light not only in Europe but also on a global scale. In London, 33% of digital tech company customers are based outside the UK, compared to 30% in Silicon Valley and just 7% in Beijing. Global connections are key to domestic success – 25% of the world’s entrepreneurs report a significant relationship with two or more others based in London, a figure beaten only by Silicon Valley.
London isn’t the only success story, right across the UK mini areas of digital tech excellence are emerging, with 16 of these areas being dubbed ‘Silicon Suburbs’. There is also a whole host of innovative and exciting new digital startups popping up all over the country, exemplifying the adage that we really are a nation of now, digital shopkeepers, or should that be digital ‘e-commercists’?
UK tech meetups by location
One of the benefits of Brexit (should we have a Labour government) is that the UK can finally look to expand its digital workforce through immigration. We can recruit the best engineers, developers, coders and scientists from all over the world, including the USA, China, Japan, South Korea and yes still, the EU. This will require a sensible immigration policy, based on needs rather than arbitrary, self-harming targets imposed over the past decade by the then Home Secretary and now Prime Minster, Theresa May. Her damaging and unkind approach to immigration has surely sullied the UKs kind, welcoming and pragmatic world view, it’s imperative the next generation of leaders base their immigration ideals on reality opposed to xenophobic Tory idealism. A simple understanding of UK economics, population/birth rates and pension commitments makes clear that immigration is going to be the only solution to ensure our current work force has any chance of retiring at a similar lifestyle to income ratio.
Jobs in the tech sector are growing, and this extremely exciting giving all the recent doom and gloom. From 2014 to 2017 the digital tech sector employment rose by more than 13%. Contrary to common opinion, tech workers are not gaming or eating quinoa around the clock, they are in fact more productive, by an average of £10,000 per worker. This means that digital tech workers are also earning much higher salaries, averaging £42,578 compared to the London average of £34,473.
The expansion of the digital tech sector has been staggering. The UK is now home to 37% of Europe’s total unicorn companies (A tech unicorn is a private company valued at more than $1 billion or £745 million). Today there are more than 2.1 million workers employed in digital tech, this is making London the perfect home for many to start their next tech enterprise. Where startups go, soon follow venture capitalists. Seven out of Europe’s top 10 VC funds call the UK home, making sure they are in prime position to invest immediately, as soon as startups are ready.
Wendy Tan White, Board Trustee Alan Turing Institute, and board member at Tech Nation, said: “As an entrepreneur and an investor I see that momentum in the UK technology sector is building relentlessly, helped by a world-class research and academic environment.
“Ambitious entrepreneurs no longer have to leave this island and head to the US to build the company of their dreams.”
Some examples of these success stories would be Deliveroo and Googles Deep Mind. Deliveroo was founded in London (although by two Americans) Will Shu and Greg Orlowski in 2013. The food delivery mobile application is a unicorn, valued at £1.5bn in September 2017 after a successful funding round. They work with more than 10,000 restaurants across the country and have pledged to keep London as their world headquarters.
Google purchased Deep Mind, the UK based and founded artificial intelligence company in 2014 for approx. $500m. Since the purchase, DeepMind moved their world headquarters to London and pledged to remain in the heart of the capital and become Europe’s leading AI provider. In June 2018, Facebook announced they would be leasing three huge offices right next door to Googles DeepMind offices in order to facilitate their own European AI ambitions. Facebook did try and purchase DeepMind in 2014 and has make it clear it wishes to win the AI moonshot race with Google.
These levels of inward investment coupled with the impressive sector and employment growth rates should be proudly championed across the media. We should be encouraging politicians to focus on the digital sector, there must be more up-to-date technology education programs including coding and engineering, and the government must offer retraining opportunities to a transitioning workforce where appropriate. We must embrace the 5G technological revolution and now is the time for the government to create an atmosphere for startup tech business to thrive. These should include tax and employment benefits, easier access to startup capital and mentoring and an immigration policy fit for an outward looking, expansive and productive global Britain, fit for the 21st century.
In a recent Tech Nation survey, 70% of the 3428 respondents said they had confidence that further growth in the UK will continue over the next 12 months and 90% said that it will either expand or stay the same. The mood today in the digital tech sector is bullish, backed up by the statistics and data, the optimism is real, therefore this should deliver confidence that the digital economy will weather the Brexit storm and bring much-needed sunshine to our little, yet significant, island.