Connection and collaboration: powering UK tech and driving the economy

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Connection and collaboration: powering UK tech and driving the economy
Connection and collaboration:
powering UK tech and driving the economy
PRIME MINISTER
                                                                                                                         Rt Hon Theresa May MP

                                                                                                                                                            Over the last year, the performance of the United Kingdom’s
                                                                                                                                                            digital tech sector has been world-leading, with British firms
                                                                                                                                                            attracting more capital than any other European country.
                                                                                                                                                            Our great strength in technology and innovation, built on the
                                                                                                                                                            UK’s excellence in R&D and creative thinking, is demonstrated
                                                                                                                                                            by the breadth of tech activity right across the country, and
                                                                                                                                                            the powerful networks being forged by the next generation
                                                                                                                                                            of entrepreneurs.
                                                                                                                                                            As this 2018 Tech Nation Report makes clear, the digital tech
                                                                                                                                                            sector makes an essential contribution to local economies
                                                                                                                                                            in our towns and cities. Clusters built around AI, machine
                                                                                                                                                            learning, cyber security and big data industries are supporting
                                                                                                                                                            growth, jobs and productivity in communities large and small.
                                                                                                                                                            Ambitious people are brought together by a passion for new
                                                                                                                                                            technologies and together become pioneers.
                                                                                                                                                            As Prime Minister, I am proud of the strengths of the UK tech
                                                                                                                                                            sector and ambitious for what it can achieve in the future.
                                                                                                                                                            That is why the government has made tech a core component
                                                                                                                                                            of our modern industrial strategy, and we will continue to invest
                                                                                                                                                            in the best innovations and ideas, in the brightest and best
                                                                                                                                                            talent, and in revolutionary digital infrastructure.
                                                                                                                                                            For years, our tech sector has been concentrated in London
                                                                                                                                                            and the South East. In line with the wider aspirations of the
                                                                                                                                                            industrial strategy to promote economic growth and prosperity
                                                                                                                                                            across the whole UK, I want to see our tech sector realise its
                                                                                                                                                            huge potential to boost communities and economies across
                                                                                                                                                            the entire nation.
                                                                                                                                                            Every entrepreneur, every innovator and every employer in the
                                                                                                                                                            tech sector and beyond can help make this happen. Together,
                                                                                                                                                            we can build a stronger and fairer country — a Tech Nation which
                                                                                                                                                            sets the UK apart, and brings us all closer together.

The Tech Nation team that worked on this report includes
Francesca Cahill, George Windsor, Henri Egle Sorotos,
Lucy Cousins, Safa Boga and Sahra Bashir Mohamed.
This report benefited greatly by feedback from Caroline Rae,
Gerard Grech, Nadia Kelly, Paul Abbott, Tia McPhee, Vicki Shiel,
and support from all colleagues at Tech Nation.
This work contains statistical data from the Office for National Statistics (ONS)
which is Crown Copyright. The use of the ONS statistical data in this work does
not imply the endorsement of the ONS in relation to the interpretation or analysis
of the statistical data. This work uses research datasets which may not exactly
reproduce National Statistics aggregates.

Design: PHILPOTT Design

                                                                             Find out more at technation.io/report2018   Find out more at technation.io/report2018                                                              3
This report would not have come to fruition                               FOREWORD
without the support and significant resources                             Gerard Grech, Chief Executive, Tech Nation
dedicated by our data partners and sponsors.                              Eileen Burbidge, Chair, Tech Nation and Partner,
                                                                          Passion Capital
Special thanks to data partners Adzuna,                                                                      Welcome to the 2018 Tech Nation Report — the most
                                                                                                             comprehensive guide to the UK’s digital tech ecosystem to date.
Beauhurst, the Office for National Statistics,                                                               Using a rich mix of official, open and web data, the Tech Nation
                                                                                                             Report 2018 dives deep inside the themes that are essential
Pitchbook, Startup Genome, Streetbees, and                                                                   to the success of the UK’s tech entrepreneurs. This year, the
                                                                                                             Tech Nation Report lives online. This booklet summarises the
our 2018 report sponsors Barclays, EY, and JLL.                                                              key insights. Interactive data visualisations, community insights
                                                                                                             and founder views all await at technation.io/report2018.
                                                                                                             From international competitiveness to jobs and skills, we are
The Tech Nation Report 2018 lives online.                                                                    proud to provide cutting-edge data and information that helps
                                                                                                             move the UK’s digital economy narrative forward. Indeed, the
This booklet summarises our key insights.                                                                    UK’s digital economy has seen astonishing growth over recent
                                                                                                             years. But it has also experienced challenges, some shared
Explore new findings and more detail including                                                               by the economy more broadly. Amongst these, of course, is the
                                                                                                             UK’s changing relationship with the EU. Like the Tech Nation
interactive data visualisations, community                                                                   team itself, however, the tech communities we surveyed this
                                                                                                             year remain resolutely optimistic about the resilience of the UK’s
insights and founder views online.                                                                           digital ecosystem.
                                                                                                             So as we power into that future, we must support founders,
                                                                                                             investors, international talent and our homegrown digital
                                                                                                             workforce. Helping them to connect, learn and share, to ensure
                                                                                                             the UK remains the best place to start and scale world-class
                                                                                                             digital businesses. This is what Tech Nation is about; it’s not about
                                                                                                             creating tech hubs but connecting the most ambitious tech
                                                                                                             entrepreneurs across the UK, so they are successful in their own
                                                                                                             cities, inspiring the next generation of local tech entrepreneurs
                                                                                                             through programmes, event and insights.
                                                                                                             This year’s Tech Nation survey received the largest response
                                                                                                             yet from members of the UK tech community. In more than
                                                                                                             3,400 submissions, they told us about achievements they are
                                                                                                             celebrating and the challenges they face. The report also
                                                                                                             features over 70 business case studies — all online.
                                                                                                             We would like to thank our Tech Nation community partners, our
                                                                                                             board, the UK Government, the Department for Digital, Culture,
                                                                                                             Media and Sport and of course, the awesome Tech Nation team —
                                                                                                             a team we are incredibly proud to be part of.

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KEY FINDINGS
Collaboration and global connectivity
helps the UK tech sector grow 2.6 times faster
than the rest of the economy

This booklet summarises           Pages 8 – 10                      Pages 11 – 13                        Pages 14 – 18                      Pages 19 – 21                    Pages 22 – 23
our key insights. Explore         1	
                                    INTERNATIONAL                   2 DIGITAL TECH                       3 COMMUNITY                        4 COLLABORATION,                 5 JOBS AND SKILLS
new findings and more               COMPETITIVENESS                   BUSINESS                             PERCEPTIONS                        CONNECTIVITY AND
detail with interactive                                                                                                                       CULTURE
data visualisations,
community insights and            •	
                                    The UK cements its position     • T
                                                                       he UK has digital suburbs,       •	
                                                                                                           Access to talent and             •	
                                                                                                                                              UK software developers         •	
                                                                                                                                                                               Jobs in digital tech are
founder views online.               as a global tech leader           not just cities                      investment continue to             are highly collaborative         on the rise
This is the fourth in an annual                                                                            challenge tech communities
                                  	Its digital tech sector is      	
                                                                     London’s digital density is                                            	
                                                                                                                                             Data on 52,000 UK Github        	
                                                                                                                                                                              From 2014 to 2017 digital
series of groundbreaking                                                                                   across the UK
                                    a shining light not only in      below the UK average at                                                 users reveals important,         tech sector employment
reports that give deep insight      Europe but also on a global      0.92, while Newbury at 15.5         	In 83% of clusters, the           often hidden, ways that          rose 13.2%. Its workers
into the UK tech ecosystem          scale. In London 33% of          is the most tech specialised          tech community cited              developers collaborate.          are more productive, on
to further the understanding        tech company customers           local economy in the UK.              access to talent as their         Languages associated             average, by £10,000 per
of the sector’s key challenges,     are based outside the UK,                                              biggest challenge.                with web development are         worker. Jobs requiring
opportunities and trends for        compared to 30% in Silicon                                                                               prevalent, the top three         digital tech skills command
the year ahead and beyond.                                          •	
                                                                      Healthy mix of growth
                                    Valley and 7% in Beijing.                                                                                are JavaScript, Python           higher salaries, at £42,578
It highlights the unique                                              stages across the UK               • U
                                                                                                            K tech communities value
                                                                                                                                             and PHP.                         compared to £32,477 for
strengths of clusters and                                                                                  quality of life and sense
                                                                    	
                                                                     The highest proportion of                                                                                those that do not.
considers how to support          •	
                                    Global connections are                                                 of place
                                                                     clusters (36%) emerged as
their growth in an evolving         key to domestic success                                                                                 •	
                                                                                                                                              The UK tech community
                                                                     balanced ecosystems, 26%            	
                                                                                                          Communities identified
political climate.                                                                                                                            is highly connected            •	
                                                                                                                                                                               Diversity remains a key
                                  	25% of the world’s               are scaleup dominant, and            the top ecosystem
                                                                                                                                                                               challenge for digital tech
Here is what you need to know       entrepreneurs report a           12% startup dominant.                strengths as: 1) appealing        	
                                                                                                                                             We found 3,527 tech meetup
about the ecosystem in 2018.        significant relationship with                                         area; 2) a helpful tech            groups, with over 1.6 million   	
                                                                                                                                                                              Only 19% of the digital
                                    two or more others based                                              community; 3) proximity to         members across 283               tech workforce is female.
                                    in London, a figure beaten                                            a university.                      locations. Their interactions    Despite the stereotype that
                                    only by Silicon Valley.                                                                                  indicate a vibrant grassroots    digital tech jobs are for
                                                                                                                                             tech scene and highlight         millennials, 72% of workers
                                                                                                                                             emerging trends such as AI.      are aged over 35.

6                                                Find out more at technation.io/report2018/keyfindings   Find out more at technation.io/report2018/keyfindings
                                                                                                                          technation.io/report2018                                                          7
1. INTERNATIONAL COMPETITIVENESS
Sponsored by: EY                                                                        The UK cements its position as
                                                                                        a global tech leader

               With the digital sector growing twice as fast as the economy                                               The UK tech sector is a           Data from Startup Genome
               as a whole, it is clear that technology is a critical component of                                         shining light in Europe, but      allows us to create a detailed
               UK growth, both now and for the future.                                                                    Brexit is forcing the nation to   picture of the dynamics
                                                                                                                          think bigger. It is therefore     driving global tech startup
               However, EY’s recent Regional Economic Forecast also found
                                                                                                                          critical that the UK looks        ecosystems. It helps us to
               that digital tech growth was fastest in the south of the country.
                                                                                                                          beyond its borders and judges     answer important questions
               Today, we have a once-in-a-generation opportunity to reposition
                                                                                                                          its performance on a truly        from founders and CEOs, such
               the country. Against a backdrop of changing trade dynamics
                                                                                                                          international scale.              as: where should I form my
               and technology-led disruption, we believe that the UK regions
                                                                                                                                                            tech startup to maximise my
               have a critically important role in strengthening the country’s                                            The tech sector has
                                                                                                                                                            chances of success? Where
               position on a global stage.                                                                                experienced rapid growth
                                                                                                                                                            should I open a second office?
                                                                                                                          over recent years, both across
               The success that London’s tech sector is currently enjoying                                                                                  Or, how can I help address my
                                                                                                                          the UK and beyond. At each
               internationally is a positive story, and one that other regions can                                                                          ecosystem’s challenges?
                                                                                                                          stage of growth, ecosystems
               learn from. 33% of its tech company customers are based outside
                                                                                                                          experience shared challenges
               of the UK, making it the second most connected tech ecosystem
                                                                                                                          and find shared strengths.
               in the world, following only Silicon Valley. But all of the UK’s
               tech ecosystems now have a vital role to play in driving the
               country’s international connections and ensuring our continued
               competitiveness.
               So, as we find ourselves faced with a real opportunity to place
               the UK at front and centre of the international digital tech
               economy, now is the time for a renewed focus on the digital                                    LONDON SECURES ITS POSITION AS 3RD GLOBAL
               landscape across the country. Tech Nation provides a platform
               for the UK’s regions to learn from successful and established                                  TECH STARTUP ECOSYSTEM
               ecosystems. It helps forge connections, joins the dots and
               supports local networks to flourish. We are proud to be part
               of that journey’s start.

               Mark Gregory
               EY Chief Economist, UK
               Debbie O’Hanlon
               EY Managing Partner, UK Regions

                                                                                       Performance
                                                                                       of the top
                                                                                       12 global
                                                                                       tech startup
                                                                                       ecosystems
                                                                                       Source: Startup
                                                                                       Genome, 2017

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2. DIGITAL TECH BUSINESSES
Global connections are key                                                                                       Sponsored by: Barclays
to domestic success
“
Having contacts         London is second only to                    Physical proximity often aids                                                   We can learn a huge amount about the UK’s tech ecosystem
across the world has    Silicon Valley for inbound                  collaboration, so we must                                                       by better understanding the innovative businesses across the
helped Deliveroo’s      global connections. 25% of                  not underestimate the                                                           nation that are driving economic growth. Barclays is delighted
growth go from          entrepreneurs across                        importance of domestic                                                          to support Tech Nation’s vision of galvanising tech ecosystems
strength to strength,   the world report having                     networks. But it is increasingly                                                right across the UK.
expanding to 12         a significant relationship                  important that UK tech clusters
                                                                                                                                                    The impact of high-growth, digital tech companies is hugely
markets since 2015      with two or more entrepreneurs              are seen as local nodes within
                                                                                                                                                    positive. They create employment, generate new opportunities
in Europe, Australia    in London, compared to                      an international web.
                                                                                                                                                    for investors and grow the economy in all corners of the UK. In fact,
and the Middle East.”   33% for Silicon Valley.
                                                                    Since the success of firms in                                                   the tech sector is an important part of a much wider range of local
Will Shu                These connections extend the                the knowledge based economy                                                     economies than we previously realised — we see tech hotspots
Co-founder & CEO        UK’s market reach and drive                 is increasingly dependent on                                                    throughout a range of digital suburbs like Stevenage and Welwyn
Deliveroo               innovation in a process that                their ability to innovate, the                                                  Garden City, as well as cities such as Bristol.
                        is inherently collaborative.                importance of these global
                                                                                                                                                    We know that tech companies are powered by relationships.
                                                                    networks to the performance
                                                                                                                                                    By helping to forge meaningful connections, Barclays look
                                                                    of the UK tech sector cannot
                                                                                                                                                    to support the ecosystem — connecting businesses to peers
                                                                    be overstated.
                                                                                                                                                    and experts, and offering innovative and bespoke support to
                                                                                                                                                    accelerate growth.
                                                                                                                                                    Digital disruption is impacting all industries — we only have to
                                                                                                                                                    look at the way technology is becoming an enabling force in
                                                                                                                                                    sectors like healthcare and transport to see this. But this type
     LONDON IS THE SECOND MOST CONNECTED ECOSYSTEM IN THE WORLD                                                                                     of disruption inevitably has a wide range of implications — and
                                                                                                                                                    consensus will need to be built around the way we manage the
                                                                                                                                                    global changes tech is already bringing about, and the UK’s place
                                                                                                                                                    in this new world.
                                                                                                                                                    High-growth small businesses and large corporates must be united
                                                                                                                                                    in this journey. Barclays are excited to support Tech Nation’s
                                                                                                                                                    mission to bring these businesses together, catalysing a national
                                                                                                                                                    network of ambitious entrepreneurs, and to help the UK’s digital
                                                                                                                                                    tech economy thrive.

                                                                                                                                                    Tom Easterby
                                                                                                                                                    Head of Venture Capital Coverage
                                                                                                                                                    Barclays

Inbound
connections
for the top 20            Inbound Connections
global tech
                        Note: Inbound connections refers to the percentage of entrepreneurs from international
ecosystems
                        ecosystems (in another country) who report a significant relationship with two or more
Source: Startup         entrepreneurs in a given ecosystem. The size of the bubble on the map corresponds to
Genome, 2017            the percentage of entrepreneurs in a given ecosystem.

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The UK has digital suburbs,                                                                                          Healthy mix of growth stages
not just cities                                                                                                      across the UK

                  Digital tech is powering local                     The value generated by a digital                “
                                                                                                                     As an ambitious and                The number of digital tech                To look at the age of tech
                  economies across the UK. But as                    tech worker varies considerably.                early stage SME, that              companies born in the UK has              companies we segmented
                  the map below shows, it is far from                Clusters where we see a high digital            is tackling a globally             boomed, with a staggering                 50 Travel to Work Areas into
                  uniformly distributed.                             density also tend towards higher                defined problem,                   78% increase between                      four groups:
                                                                     productivity per worker.                        collaboration is key               2009–2010 and high growth
                  Nor is it the sole preserve of large,                                                                                                                                           1 BALANCED An even
                                                                                                                     for us. We look for                was sustained until 2015–2016
                  metropolitan cities. In digital                    In fact, there is a ‘productivity power                                                                                      distribution of businesses of
                                                                                                                     the support of                     when the business birthrate
                  suburbs like Guildford and                         path’ from London to the mouth                                                                                               different ages, from startups
                                                                                                                     government and                     fell by 17%.
                  Aldershot, Slough and Heathrow,                    of the River Severn, travelling along                                                                                        to mature companies
                                                                                                                     health departments,
                  digital tech density is significantly              the M4 corridor and spreading to                                                   The highest proportion of
                                                                                                                     as well as industry                                                          2 MATURE A higher than
                  higher than the UK average,                        Southampton and Portsmouth.                                                        clusters (36%) emerged as
                                                                                                                     giants to find ways                                                          average proportion of
                  while employment and turnover                      Turnover by employee ranges                                                        balanced ecosystems,
                                                                                                                     that we can innovate,                                                        companies aged 10–18 years
                  are amongst the highest of all                     from £27,650 in Campbeltown to                                                     26% are scaleup dominant,
                                                                                                                     and grow together.”                                                          and 19 or over
                  UK clusters.                                       £320,000 in Bristol. The UK’s                                                      and just 12% startup dominant.
                                                                     strength as a Tech Nation rests on              Devika Wood                        This analysis paves the way               3 SCALEUP A higher proportion
                                                                     comprehending, and valuing, this                Co-founder                         for more targeted support                 of companies aged 5–9 years
                                                                     diversity of economic activity.                 Vida                               for each.
                                                                                                                                                                                                  4 STARTUP A higher
                                                                                                                                                                                                  proportion of companies
                                                                                                                                                                                                  aged four or under.

DIGITAL SUBURBS UNCOVERED                                                                                            A HIGH PROPORTION OF
ACROSS THE UK                                                                                                        CLUSTERS WITH A BALANCE
                                                                                                                     OF COMPANY GROWTH
                                                                                                                     STAGES SUGGESTS A HEALTHY
                                                                                                                     UK ECOSYSTEM

                                 >2

                                 1.5                                                                                 Growth Stage
Digital tech                                                                                                         distribution
density in                       1                                                                                   of companies in                       Startup
Travel to Work                                                                                                       Travel to Work                        Scaleup
Areas across                     0.5                                                                                 Areas across
the UK                                                                                                               the UK                                Mature
Source: Tech                     0                                                                                   Source: Tech                          Balanced
Nation, 2018;                                                                                                        Nation, 2018; ONS,
ONS, Business        Note: Digital density measures digital tech specialisation in clusters compared to density      Business Structure
Structure            in the UK. A figure above 1 indicates relative specialisation, and below 1 indicates relative   Database,                          Note: Data on 50 Travel to Work Areas are presented due to low sample sizes in the
Database, 2017       lack of specialisation in digital tech.                                                         2000—2016                          rest of the UK.

12                                            Find out more at technation.io/report2018/business                     Find out more at technation.io/report2018/business                                                                 13
3. COMMUNITY PERCEPTIONS
Sponsored by: JLL                                                                     UK tech communities share
                                                                                      key experiences

                At JLL, we understand just how important the place you work                                             To develop a deep under-          of 3,428 submissions, they
                can be. But, as this report confirms, places are nothing without                                        standing of the UK digital        told us about the opportunities
                dedicated communities supporting them. 57% of clusters across                                           tech ecosystem, it is essential   and challenges their local
                the nation flagged the tech community as a top local strength.                                          to explore a mix of official,     ecosystems face, and
                                                                                                                        web and open data, as well        the digital tech leaders
                We are here to make sure you choose the right location for
                                                                                                                        as probe the experiences          they admire.
                your business, to help create inspiring workplaces, and to show
                                                                                                                        and perceptions of ambitious
                you how the buildings you occupy can make your talent more                                                                                The majority of respondents
                                                                                                                        entrepreneurs, support
                productive. More than this, though, at JLL we share the same                                                                              (33%) were founders and CEOs,
                                                                                                                        organisations and employees
                ambition as Tech Nation — to help digital tech communities                                                                                followed by workers in tech
                                                                                                                        in the sector.
                flourish across the UK. What better way to engage with the                                                                                companies (31%).
                pressing issues experienced in tech, than to hear from those                                            This year’s Tech Nation survey
                ambitious entrepreneurs driving the sector forward?                                                     received the largest response
                                                                                                                        yet from these members of the
                Many of the challenges that tech businesses in the UK face
                                                                                                                        UK tech community. In a total
                are not exclusive to where they are based. Although they vary
                from place to place, broadband speeds, living costs, transport,
                affordable workspace and even access to the best talent, are
                needs shared across the country. That is why we are supporting
                Tech Nation’s work on community perceptions this year — to
                share insights, and facilitate connections.                           Access to talent and investment
                The UK is at an inflection point. We have the opportunity to unite
                a rich and diverse range of communities across the country to         continue to challenge tech
                come together on key issues defining your ecosystem. We hope
                that you will use these insights to make informed business            communities across the UK
                decisions, and accelerate your success at this incredibly exciting
                time for UK tech.
                                                                                                                        The challenges experienced        The maps overleaf show
                                                                                                                        by people living and working      top challenges and
                Michael Davis                                                                                           in UK tech clusters are           strengths perceived in the
                Tech and Media Sector Lead                                                                              seldom exclusive to their         clusters we surveyed.
                JLL                                                                                                     own environment.
                                                                                                                        The top challenges identified
                                                                                                                        in survey areas were:
                                                                                                                        1 Access to talent
                                                                                                                        2 Access to funding
                                                                                                                        3 Bad transport links

14                              Find out more at technation.io/report2018/community   Find out more at technation.io/report2018/community                                               15
Community perceptions                                                                Explore your region online at
of local tech ecosystems                                                             technation.io/report2018/community

                                                      KEY STRENGTHS                                                                                         KEY CHALLENGES
                                                      PERCEIVED BY                                                                                          PERCEIVED BY
                                                      THE LOCAL TECH                                                                                        THE LOCAL TECH
                                                      COMMUNITY                                                                                             COMMUNITY

                Access to       Proximity of     Appealing        Proximity of                                    Limited           Lack of support    Access to talent   Lack of
Strengths       resources       a university     area             large tech         Challenges                   infrastructure    from wider                            awareness
                                                                                                                                                       Access to
of local tech                                                     companies          of local tech                                  tech community                        of local tech
                Good quality    Creativity/      Good transport                                                   Cost of living                       funding
ecosystems                                                                           ecosystems                                                                           community
                of life         innovation       links            Digital                                         Bad transport     Remote area        Availability
Source: Tech                                                                         Source: Tech
                Helpful tech    Access to        Access to        infrastructure                                  links             Retaining talent   of workspace       Lack of tech
Nation and                                                                           Nation and
                community       workspace        talent           Diversity of                                                                                            training
Streetbees,                                                                          Streetbees,                                    Lack of support    Few nearby
2018                                                              talent             2018                                           from government    tech companies

16                             Find out more at technation.io/report2018/community   Find out more at technation.io/report2018/community                                                  17
4. COLLABORATION
UK tech communities value quality                                                              CONNECTIVITY AND CULTURE
of life and sense of place                                                                     UK software developers are highly collaborative
“
Norwich businesses       The top strengths identified in     Strengths as well as challenges                                       Software innovation is critical     Data on 52,000 UK Github
value working            survey areas were:                  are shared — suggesting that                                          to the success of the UK digital    users shows that the
together, both locally                                       benefits could come from                                              tech sector, yet how developers     languages associated with
                         1 Appealing area
and as part of the                                           better connections that enable                                        collaborate is seldom captured.     web development are most
much bigger tech         2 A helpful tech community          founders and CEOs to learn                                            We have done so using data          prevalent, the top three are
community in the UK.”    3 Proximity to a university         from one another and                                                  from leading software               JavaScript, Python and PHP.
                                                             open up new opportunities                                             development platform, Github.
James Duez                                                                                                                                                             The connections that users
                                                             through collaboration.
Investor, Co-founder                                                                                                               Productive connections require      make on Github are best
& Executive Chairman                                         The UK’s strength as a tech                                           collaborators to communicate        illustrated through the networks
Rainbird Technologies                                        nation lies in the diversity of                                       effectively. In the case of         they create. As a project is
                                                             local clusters and cultures                                           development, this does not          developed, Github stores
                                                             that come together to form a                                          necessarily mean speaking the       and manages revisions made
                                                             dynamic, national ecosystem.                                          same language, but coding the       by its users. It also enables
                                                                                                                                   same language.                      them to ‘fork’ projects — copy
                                                                                                                                                                       another user’s work from an
                                                                                                                                                                       open source code repository.
                                                                                                                                                                       This extensive, and ostensibly
                                                                                                                                                                       hidden, network of digital
                                                                                                                                                                       collaboration is evidence of
                                                                                                                                                                       the depth of the national tech
                                                                                                                                                                       ecosystem.

Diversity among UK tech leaders
remains a challenge
                                                                                                                                       GITHUB SHOWS HOW UK TECH DEVELOPERS
                         We asked members of the tech        Tech leaders do, however,
                                                                                                                                       SHARE CODING LANGUAGES
                         community who they saw as           inhabit a spectrum of roles.
                         the most influential tech figures   48% of those identified                                      Javascript                                                            7,769
                         in their local area. Unsung         are members of the wider
                         heroes emerged alongside            ecosystem and 51%                                               Python                                   4,511
                         better known figures, but only      are heads of, or working                                          PHP                         3,472
                         11% were women.                     in, tech companies. Some are
                                                             industry veterans, such as                                        Java                        3,343
                         This is concerning. A diversity
                                                             Hermann Hauser at Amadeus                                          C#                 2,272
                         of role models is important if
                                                             Capital. Others are disruptors    Top
                         people are to identify not only
                                                             like Demis Hassabis at            programming
                                                                                                                               Ruby                2,245
                         with leaders in the field, but
                                                             DeepMind, Lawrence Jones          languages
                         with tech itself.                                                                                    HTML               2,118
                                                             at UKFast and Paul Smith          used on Github,
                                                             at Hyperloop One.                 by number                        CSS         1,644
                                                                                               of users
                                                                                               Source: Tech                     C++        1,505
                                                                                               Nation, 2018;
                                                                                               Github, 2018
                                                                                                                                  C      1,105

18                                       Find out more at technation.io/report2018/community   Find out more at technation.io/report2018/collaboration                                                19
The UK tech community
is highly connected
“
Calling in favours,                The UK’s tech community                                                                                                                TOP 400 MEETUPS HIGHLIGHT
asking for advice                  is highly connected.
and sparring with
                                                                                                                                                                          EMERGING TRENDS, WATCH OUT
                                   Meetup.com data reveals:                                                                                                               FOR AI AND BLOCKCHAIN
fellow entrepreneurs
has helped me build                • 3,527 UK tech groups
                                                                                                                                                                          AS THEY TAKE CENTRE STAGE
a big business (and                • 1.6 million members
keep my sanity!)                                                                                                                                                          IN THE CONVERSATION
                                   • 283 locations
over the last 5 years.”
                                   Tech meetups are inclusive
Andrew Hunter                      and collaborative — 91% of
Co-founder                         UK groups are open for all
Adzuna                             to attend. 9% require approval
                                   and only 0.03% are closed.
                                   They highlight emerging trends,
                                   for instance, in Manchester
                                   a mass of groups are
                                   discussing new technologies
                                   like Blockchain, and a strong
                                   data science community is
                                   making itself felt in London.
                                   The network diagram here
                                   shows the top 400 meetups
                                   in the UK, by size of
                                   membership. Meetups are
                                   clustered not by geography,
                                   but by specialisation — the
                                   more similar the tags used
                                   to describe them, the closer
                                   they appear on the diagram.
                                   Software development is
                                   a core part of this network,
                                   and an integral component
                                   of UK tech, both now and
                                   for the future.

Top 400 tech              23.75%                     20.75%                     17.25%                      16.25%                    15.75%                     3.75%
meetup groups             Pink cluster:              Green cluster:             Blue cluster:               Black cluster:            Orange cluster:            Purple cluster:
by membership             Main theme:                Main theme:                Main theme:                 Main theme:               Main theme:                Main theme:
in the UK                 Open source                Software development       Web design                  Emerging technology       Artificial intelligence    Java
Source: Tech              Linux                      Scrum                      CSS                         Virtual currency          Big data                   .NET
Nation, 2018;             System administration      Agile                      UX design                   Mobile technology         Python                     PHP
Meetup.com,                                          Project management         Product design              Reg tech                  Hadoop                     Ruby
2018                                                                                                                                  Robotics

20                                                Find out more at technation.io/report2018/collaboration   Find out more at technation.io/report2018/collaboration                               21
5. JOBS AND SKILLS
Jobs in digital tech are on the rise                                                                                   Diversity remains a key
                                                                                                                       challenge for digital tech

                                      Between 2014 and 2017                       Employer demand is increasing        “
                                                                                                                       With almost half                   Only 19% of the digital tech        On average 72% of UK digital
                                      employment in the digital tech              too. Non-digital tech companies      of our exec and                    workforce is female, compared       tech workers are over 35,
                                      sector increased by 13.2%.                  are becoming more reliant            management team                    to 49% across all UK jobs.          challenging the stereotype
                                      Workers in digital tech are also            on digital tech workers, as tech     being female,                      The diversity of the digital        that jobs in this sector are
                                      more productive than those                  pervades every business and          diversity is the glue              tech workforce can be probed        the preserve of millennials.
                                      in non-digital sectors, by an               new forms of work evolve.            that holds our business            further using the ONS’ Annual       East London, the site of Silicon
                                      average of £10,000 per person                                                    together, and the                  Population Survey. This finding     Roundabout, is the only region
                                      per annum.                                  However, tech does not               fuel that allows us                flags a diversity dilemma in        where the majority of digital
                                                                                  currently offer equal                to keep innovating.”               tech, reinforcing a groundswell     tech workers (51%) are under 35.
                                      Jobs requiring digital tech skills          opportunities for all. There is a                                       of industry activity to address
                                                                                                                       Norm Johnston
                                      command higher salaries, on                 growing movement to promote                                             inclusion and equality in digital
                                                                                                                       CEO
                                      average, £42,578 compared to                diversity, with a number of                                             companies.
                                                                                                                       Unruly
                                      £32,477 per year, while digitally           initiatives aiming to address
                                      enabled jobs — those requiring              the gulf between men and                                                15% of those in digital tech
                                      only some engagement with                   women’s employment in the                                               jobs are of black, Asian
                                      digital tech – bring in £35,227.            sector. Other inequalities also                                         and ethnic minority (BAME)
                                      Overall, digital tech jobs are              deserve attention.                                                      background. This is significantly
                                      good for workers, and good                                                                                          higher than the 10% across
                                      for the UK.                                                                                                         all UK jobs. Ethnic diversity
                                                                                                                                                          is above UK average, yet
                                                                                                                                                          gender diversity is significantly
                                                                                                                                                          lower — this reminds us of the
                                                                                                                                                          importance of taking a nuanced
                                                                                                                                                          approach to understanding
                                                                                                                                                          workforce composition.
                                      THE MORE DIGITALLY SKILLED A UK JOB IS,
                                      THE HIGHER ITS AVERAGE ANNUAL SALARY

                                                                                                                                                          WOMEN IN TECH ARE

                                                                                         £42,578
                                                                                                                                                          OUTNUMBERED 4:1
                     Digital native

                  Digitally enabled
                                                                          £35,277
                                                                                                                       Gender
                                                                                                                       diversity of
                                                                                                                       people working

                                                                     £32,477
                                                                                                                       in digital
                       Non- digital                                                                                    tech jobs, 2017
                                                                                                                       Source: Tech
Average annual                                                                                                         Nation, 2018;
salary of jobs                                                                                                         ONS, Annual
Source: Adzuna,                       Note: Jobs are categorised based on their digital skill level according to the   Population Survey,
2018                                  DCMS definition of technology literacy.                                          Wave 3 2017

22                                                                 Find out more at technation.io/report2018/jobs      Find out more at technation.io/report2018/jobs                                                       23
DIGITAL PERFORMANCE
INDICATORS

                                                                                                                                                                                                                                                                                                                                                          568%
                                                                                                                                                                                                                                                           526%
                                                                                                                                          7. Wolverhampton & Walsall
                                                                                   BRISTOL TOPS

                                                                                                                                                                                                                                                                         8. Dunfermline & Kirkcaldy

                                                                                                                                                                                                                                                                                                                                    429%
                                                                                                                                                                       422%

                                                                                                                                                                                                                                                                                                      418%
                                                                                                                                                                                                                   397%
                                                                                                                                   380%
                                                                                   PRODUCTIVITY
                                        £ per person
                                                                                   OF LOCAL TECH

                                                                                                                                                                                                                                                                                                             6. Newcastle
                                                        320K

                                                                                                                                                                                                                          3. Edinburgh
                                              Bristol
                                                                                   ECOSYSTEMS

                                                                                                                                                                              11. Glasgow

                                                                                                                                                                                                                                                                                                                                           1. Leicester
                                                                                                               14. Dudley
                                           Newbury      304K
                                           Swindon      296K
                               Slough and Heathrow      285K
                                        Basingstoke     259K
                                        Portsmouth      250K
                                           Reading      234K
                                             Telford    225K                                                                                                                                                                                                                                                                               LEICESTER HAS
                                            London      201K                                                                                                                                                                                                                                                                               EXPERIENCED
                     Stevenage & Welwyn Garden City     196K                                                                                                                                                                                                                                                                               THE LARGEST
                                      Southampton       192K
                                               York     188K                                                                                                                                                                                                                                                                               INCREASE IN
                                      Stoke-on-Trent    186K                                                                                                                                                                                                                                                                               DIGITAL STARTUP
                               Guildford & Aldershot    168K
                            Wolverhampton & Walsall     165K                                                                                                                                                                                                                                                                               BIRTHS
                                                                                                                                                                                                                                                                                                                                           2006 VS 2016

                                                                                                                                                                               9. Stevenage & Welwyn Garden City

                                                                                                                                                                                                                            13. High Wycombe & Aylesbury

                                                                                                                                                                                                                                                                                                                                    536%

                                                                                                                                                                                                                                                                                                                                                                             514%
                                                                                                                                                                                                                                                                                                      562%

                                                                                                                                                                                                                                                                                                                                                          562%
                                                                                                                                                                                                                   412%
                                                                                                                                   385%

                                                                                                                                                                                                                                                                                                             2. Slough & Heathrow
                                                                                                                                                                                                                                                           381%
                                                                                                                                                                       369%
                                                                                                               12. Milton Keynes

                                                                                                                                            15. Cheltenham

                                                                                                                                                                                                                                                                                                                                           10. Medway
                                                                                                                                                                                                                                                                         5. Newbury

                                                                                                                                                                                                                                                                                                                                                                 4. London
Productivity                                                                                               Digital startup
(£ per person),                                                                                            births within Travel
turnover by                                                                                                to Work Areas,
employee for the                                                                                           percentage change in
top 15 UK Travel                                                                                           digital startup births
to Work Areas                                                                                              2006 vs 2016
Source: ONS                                                                                                Source: ONS
Business Structure                                                                                         Business Structure                                                                                                                                     Note: A minimum threshold of 10 companies per Travel to
Database, 2017                                                                                             Database, 2006, 2016                                                                                                                                   Work Area has been applied to the underlying data.

24                                                             Find out more at technation.io/report2018   Find out more at technation.io/report2018                                                                                                                                                                                                                                25
RECOMMENDATIONS FOR
AMBITIOUS ENTREPRENEURS

           London has powerful              Analysing the age                   The challenges that               Learning from others          Across the UK, employer
           global connections, but          distribution of companies           communities face are              could reduce the time         demand is outstripping
           tech clusters across the         within each of the UK’s             seldom exclusive to their         it takes to innovate and      supply of digital tech skills.
           UK are going global, and         tech ecosystems paves               cluster — they include            accelerate success.
                                                                                                                                                Increasing diversity would
           all must elevate their           the way for more targeted           access to talent, funding,
                                                                                                                  Informal industry meetups     broaden the talent pool.
           ambitions to perform on          and appropriate support             transport and workspace.
                                                                                                                  are a good way to test new    But communities across the
           an international stage.          for each.
                                                                                Use the Tech Nation               ideas, discuss emerging       country also stated that
           Begin expanding                  26% of clusters are                 Report 2018 to identify the       topics, and meet like-        their ecosystem’s ‘proximity
           yours by learning from           categorised as ‘scaleup             challenges experienced            minded individuals or         to a university’ was
           founders and CEOs with           dominant’ economies,                in your local digital tech        potential collaborators.      among its key strengths.
           international experience.        and just 12% as ‘startup            ecosystem. Do they align                                        Relationships should be
                                                                                                                  By tapping into the
           Engage with UK networks          dominant’ ones.                     with your own?                                                  cultivated with student
                                                                                                                  networks that we highlight
           like International Tech                                                                                                              tech societies. Startups
                                            Mechanisms that expose              Connect with communities          you could find local groups
           for Good. Tech Nation’s                                                                                                              can also engage with
                                            startups and scaleups               across the country, learn         that you have never
           Future Fifty and Upscale                                                                                                             students directly through
                                            to corporates should be             from the experiences of           previously come across.
           programmes, for late                                                                                                                 career fairs like Silicon
                                            embraced. If you are a              your peers, and share
           and mid-stage scaleups,                                                                                Dive into this powerful       Milkroundabout.
                                            digital tech entrepreneur,          your experiences. The UK
           run tailored sessions on                                                                               network. Explore the
                                            look for opportunities to           network is unique, and our                                      Working with a local
           going global.                                                                                          connections between
                                            engage with corporate               rich ecosystem strengthens                                      code club for children can
                                                                                                                  groups, or search for terms
           Support is also available        accelerators or work                the country’s position as a                                     help future-proof your
                                                                                                                  you are interested in.
           through the Department           spaces, like Barclays’              world-leading Tech Nation.                                      talent pipeline. Norwich’s
           for International Trade’s        Eagle Labs or Wayra’s                                                                               Step Into Tech, for example,
           Exporting is GREAT               Accelerator.                                                                                        helps children develop
           campaign, the Mayor                                                                                                                  their love of all things
                                            If you are a corporate,
           of London’s Go to Grow                                                                                                               tech, while Raspberry Pi
                                            make the process
           programme, British                                                                                                                   promotes digital making
                                            transparent. By setting
           Chambers of Commerce                                                                                                                 with their small, affordable
                                            KPIs, focusing on real
           and local Chambers.                                                                                                                  computers.
                                            internal needs and securing
                                            senior ‘buy in’, you can
                                            smooth the journey.

                                                                               Learn
                                            Engage with                        from peers,
           Get support,                     corporates                         accelerate                        Collaborate                    Recruit talent
           go international                 in new ways                        growth                            to accumulate                  creatively

26                Find out more at technation.io/report2018/recommendations   Find out more at technation.io/report2018/recommendations                                          27
ABOUT TECH NATION                                                                 COMMUNITY PARTNERS

          Tech Nation empowers ambitious tech entrepreneurs to grow                                                 The work we do as Tech Nation is made possible by the support
          faster through knowledge and networks. We help the UK                                                     and time invested by our community partners. We want
          compete globally to bring jobs, skills and higher productivity                                            to extend a huge thanks to every individual and organisation
          to the nation and build an economy fit for the future. We do                                              across the UK that got behind the Tech Nation Report 2018.
          this through:
                                                                                                                    Thanks to the 3,428 people who completed our survey and
                                                                                                                    the 70 organisations featured as case studies.
          Growth programmes                  Digital entrepreneurship                                               Thanks to our community partners who helped to promote the
          tailored to each stage             skills                                                                 survey and thanks to those who provided additional support
          of your business lifecycle                                                                                and content for the report.
                                             DIGITAL BUSINESS ACADEMY
          RISING STARS                       Free courses to help start,
          Showcasing the UK’s best           grow, or join a digital business.
          early-stage tech startups.
                                             TECH IMMERSION
          UPSCALE                            Workshops on the UK’s startup
          Helping the UK’s leading           ecosystem, tailored to your
          scaleups grow into the tech        business needs.
          giants of tomorrow.
                                             Visa Scheme
          FUTURE FIFTY
          A powerful network of the          Tier 1 employment visas for
          UK’s leading late-stage            exceptional international
          tech companies.                    tech talent.

          FOUNDERS’ NETWORK
          Peer-to-peer network for           Research and insights
          tech startup founders.             Championing the UK digital
          FINTECH                            sector through data, case
          Helping UK fintech startups        studies, and outreach.
          scale, at home and abroad.

28                                      Find out more at technation.io/about-us   Find out more at technation.io/report2018/communitypartners                                    29
With special thanks to                         Brian Baglow
                                               DIGIT
                                                                                   Kieron Cropper
                                                                                   Wired Sussex
                                                                                                                     Gareth Jones
                                                                                                                     Town Square Spaces
                                                                                                                                                    Emma Seward
                                                                                                                                                    Tech Nottingham
                                               Megan Bagnall                       Charlotte Crossley                Phil Jones                     Cathy Skelly
                                               Silicon South                       Innovation Birmingham             Wired Sussex                   Invest Liverpool
                                               Gregg Bayes-Brown                   Lyssa-Fee Crump                   Sian Jones                     Paul Smith
                                               Oxford University Innovation        Software Cornwall                 Welsh Government               Hyperloop One
                                               Colin Batten                        Alan Dobson                       Mel Kanarek                    Ruth Spencer
                                               Innovation Point                    Dundee City Council               Sheffield Digital              Bournemouth Borough Council
                                               Laura IH Bennett                    David Dunn                        Catrin Kemp                    Nick Sturge
                                               Sheffield City Region LEP           Sunderland Software City          Welsh Government               Engine Shed
                                               Lyndsey Britton                     Gillian Easson                    Mark Lawler                    Kris Sum
                                               Campus North                        Creative Dundee                   Baltic Creative                Tech Exeter
                                               James Brown                         Carwyn Edwards                    Fiona Lettice                  Antonia Taylor
                                               GFirst LEP                          North Wales Tech                  University of East Anglia      Antonia Taylor PR
                                               Adrian Burden                       Steve Ewing                       Oliver Littlejohn              Mark Thwaite
                                               Key IQ Ltd                          Informatics Ventures              CodeBase                       Digital Lancashire
                                               Paula Byers                         David Greer                       Robert Lo Bue                  Stewart Townsend
                                               Lime Cloud Limited                  Invest NI                         Cardiff Start                  Digital Lancashire
                                               Dev Chakraborty                     Rob Glover                        Paul Osbaldeston               Steve Wainwright
                                               GFirst LEP                          Tech Exeter                       Welsh Government               Futurelabs
                                               Emma Cheshire                       Jennifer Hartley                  Andrew Parker                  Belinda Waldock
                                               Dotforge                            NewcastleGateshead Initiative     Custard Factory                Software Cornwall
                                               Louize Clarke                       Michael Hayes                     Steve Pette                    Doug Ward
                                               ConnectTVT                          RookieOven                        Ormeau Baths                   Tech Britain
                                               Stuart Clarke                       Charlie Hoult                     Polly Purvis                   Daniel Watson
                                               Leeds Digital Festival              Hoults Yard                       ScotlandIS                     Middlesbrough Council
                                               Neil Cocker                         Paul Hughes                       Ben Ravilious
                                               Cardiff Start                       Allia                             Leicester Tech Startups
                                               Claire Cockerton                    Tatjana Humphries                 Tim Robinson
                                               Plexal                              Invest Bristol & Bath             Tech East
                                               Judi Coe                            Alison James                      Huw Sayer
                                               Cambridge Network                   Baltic Creative                   Hot Source
                                               Jamie Coleman                       Christian Jenkins                 Alan Scrase
                                               CodeBase                            Plymouth Science Park             SETsquared at the University
                                                                                                                     of Southampton
                                               John Connolly                       Simon Jenner
                                               C4Di                                Silicon Canal                     Andrew Seward
                                                                                                                     Tech Nottingham

30                   Find out more at technation.io/report2018/communitypartners   Find out more at technation.io/report2018/communitypartners                                31
technation.io/report2018
THE STATE OF THE UK TECH NATION
The Tech Nation Report 2018 lives online. This booklet summarises our
key insights. Explore new findings and more detail with interactive data
visualisations, community insights and founder views online.

  @TechNation

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