UK tech sector nears £1 trillion value but still leans on US money

In short: The UK is now one of the world’s three most valuable tech hubs, but many British tech companies still rely on US investors, US platforms, and US stock markets to grow.

What's going on

Britain’s tech sector is valued at nearly £1 trillion, making it the third most valuable technology ecosystem in the world after the US and China. It is also the most valuable in Europe. In 2023, the UK’s digital and technologies sector was estimated to contribute £207 billion in GVA (a measure similar to the value a sector adds to the economy) and employ 2.6 million people.

The UK also attracts more venture capital (start-up investment money) than any other European country. In 2022, fast-growing UK tech companies raised £24 billion, more than France and Germany combined. The country has created more than 160 “unicorns,” meaning private start-ups valued at $1 billion or more.

However, much of the money behind later growth still comes from the US. Many successful UK start-ups are bought by US companies or choose to list shares in New York instead of London. UK start-ups also often build their products on US-run “cloud” services (remote computing, like renting a powerful computer over the internet), which keeps key parts of the ecosystem tied to American firms.

What to watch

Whether the UK becomes a more independent global tech centre will depend on filling funding gaps for bigger companies, keeping skilled workers, and making London a more attractive place for IPOs (when a company sells shares to the public for the first time). The next decade will show if more UK companies can grow into global giants without needing to move their financing or ownership overseas.

Source: Financial Times