As mentioned earlier in one of the articles “EUROPE: EMERGING FUTURE PARADISE FOR IT & SOFTWARE DEVELOPMENT”, European nations are tapping Technology in almost each sector vigorously to bring innovation in their products and business model.
According to Tech Nations 2018 report UK’s Digital Economy is now £184 billion plus a rise of £14 billion in a year growth. With London securing 3rd position in global rankings of Tech Startups ecosystems, and yet to catch up with Silicon Valley and New York City the Digital Tech Startups landscape of UK appears very promising and has shown progressive growth in recent years.
You will be amazed to know that 30 percent of Customer base of London’s Tech Startups is outside the UK. Now, one may ask a question that what impact this can have on the UK? The answer is Tech Startups in the UK will help improve UK’s GDP to scale new heights. Although, we know that UK Government agrees on entering into Tech Partnership with India with the motive of building on Digitization. But to accelerate this, the IT Trade Unions of both nations will be working collaboratively towards the improvement of Entrepreneurship and produce more successful Tech Startups. This in turn will help in producing more jobs at both, onshore and offshore locations of UK and Indian organizations.
Already UK has a lot to attract people from beyond borders namely similar culture with European countries, world class universities which are a dream for many students, a hub for major industrial players in manufacturing sector like Rolls Royce, BAE Systems and many more who are striving towards innovation and building on Digital Transformation to keep pace with the Global competitors. The Top UK Universities produce exceptionally talented professionals for Tech industry of UK and abroad too.
Thus UK is empowering education, training and leadership which are most essential pillars of Entrepreneurship and the basis for successful Tech Startups. Moreover, UK Government’s strong financial support towards public and private initiatives that can be mainly categorized under three heads i.e. Research and Innovation, Startups and Education has set perfect inputs required for unstoppable growth of Tech Startups in UK.
Fig 1: UK leading in No. of Unicorns among European countries (Source: dealroom.com)
With this background the support to supply talented professionals in the field of technology to UK’s demand seems achievable. Goal is to reach an investment in Research and Development of 2.4 percent of its total GDP by 2027. This means it will infuse an additional £80 billion investment towards Research and Innovation in the next decade. Isn’t this a great initiative by UK government? We would say it is a milestone for many other countries who look forward to a stable Startup ecosystem and is a blessing for UK’s economy.
pliXos agrees with the article of Tech Nation that UK is the undisputed leader in the number of Unicorns in Tech Startups. The increased investment in Tech Startups has led to growth of Tech companies at a random pace in UK, more precisely at double the pace of UK’s National Economy. Quality of Life and Cost of Living are among the top factors responsible for the growth of tech sector in UK regions. Not only the cities itself in the UK but also Digital Suburbs provide perfect blend of resources for recruiting talent by companies.
Factors Responsible for UK’s Leadership in Number of Tech Startups in Europe
Competition in Global Market for better IT Outsourcing Services
With the start of Digital Disruption companies in each sector have started to leverage the power of Digitization in existing business models. Starting from Insurance to Automotive etc. every company is in competition to adopt the new trends in order to capture more market share. Having online presence and set up at offshore and nearshore locations for better market penetration is a strategy followed by most conglomerates now. Simple reason is to save Cost and accelerate Time to Market.
Spike in investment in Technology
Tremendous increase in investment by Government as well as Private sector to encourage Tech Startups has pushed Entrepreneurs to deliver their best. According to Dealroom in 2017 UK alone had a record investment of $7.9 billion in venture capital which is more than combined venture capital investment in Germany, France and Sweden. UK Government’s honest endeavor to push Tech Startups (one example being the G-Cloud initiative supporting SME’s and innovative Cloud offerings) is something which is not visible for other European countries.
pliXos (a German based IT Outsourcing Advisory & Consulting Firm with an own set of Cloud tools) also owes a mention in their list as a trusted partner in their G-Cloud IT Framework which in turn will provide public sector buyers with a tried and tested route to achieve value for money.
Fig 2: UK program allows public buyers in UK to build on Innovative SME’s & Cloud based offerings (Source: gps.cabinetoffice.gov.uk)
UK is home to pool of Digital and Technically skilled talent globally
UK Universities are already in demand as can be understood by the fact that number of foreign applicants is more than the applicants from UK itself. A report from Tech Nation speaks 2.1 million people currently have jobs in UK digital sector - growing over 10% a year Jobs requiring Digital skills is high paid. Also the top universities for Computer Science are situated in UK attracting students from various countries. By city, London is the top hub for professional developers, with 303,594 developers in the city. These figures are expected to increase as there is still skill shortage.
London being the financial epicenter
London is undoubtedly the financial capital of UK. Hence Tech Startup companies have experienced maximum investment of $15.9 Billion (2013-2018). This is one of the major reasons for maximum number of unicorns in Tech Startups in the UK.
UK is 2nd largest source of capital just after United States
UK holds the second position as investor in Venture Capital amounting to 22% of Europe’s total investment which just after US having 26% investment to its name (In Germany the venture capital amounts to 9% of total). Not only this within Europe investors from UK are investing outside their country and supporting Tech Startups.
Software Developers in UK are highly collaborative
Tech meetups, Summits, Tech Conferences etc are very important to create the positive environment for Tech Startups, which is happening in UK. The languages mostly used in collaboration by Software Developers in UK at present are JavaScript, Python and PHP. With Open Source and Software Development being the top of the list in Tech Meetups in UK it is absolutely clear that Digital Ecosystem in UK is dependable on these two pillars i.e. Open Source and Software Development.
CONCLUSION:
It is a fact that UK has a leading position in Tech Unicorns as highlighted in the above content. Thus it gives a strong message to other European countries like Germany to speed up their Tech Startup ecosystem and keep pace with markets. Furthermore, access to the right Global Talent pool is one of the most vital factors for UK’s success in Tech unicorns. This seems not to be a similar situation with other European countries and the rising gap between the demand for skilled IT Professionals and supply makes the situation more critical for future. We see our free B2B Marketplace offering access to a global pool of prequalified software service providers a valuable solution for companies to get the needed IT Professionals.
Sources:
technation.io
blog.dealroom.co
www.gov.uk/government/news/
www.gov.uk/government/organisations
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