Number of tech businesses in UK grows 31% in 5 years

Number of tech businesses in UK grows 31% in 5 years

The number of tech-related enterprises in the UK private sector has risen by 31 per cent since 2010, according to the latest KPMG/Markit Tech Monitor UK Survey. This represents a net gain of approximately 45,000 enterprises over a five year period, or one additional tech sector enterprise every hour of the day for the past five years.

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The number of tech-related enterprises in the UK private sector has risen by 31 per cent since 2010, according to the latest KPMG/Markit Tech Monitor UK Survey. This represents a net gain of approximately 45,000 enterprises over a five year period, or one additional tech sector enterprise every hour of the day for the past five years.

The growth of tech sector enterprises is double that of all private sector enterprises over the same period (16 per cent).

Reading has taken the top spot of all tech clusters in the UK, as more than one in five enterprises in the area are tech sector firms (22 per cent), a proportion significantly higher than the national average (eight per cent).

Top tech sector enterprise clusters in 2015:

1) Reading 22% (% of tech enterprises out of all businesses in the area)

2) Wokingham 21%

3) Slough 19%

4) Hounslow 18%

5) Milton Keynes 17%

The M4 corridor hosts three of the top five tech clusters in the country, however the Tech Monitor UK Survey reveals that regions across the UK are generating growth through the tech sector. Clusters in the UK are also moving increasingly towards specialisation in a particular sub sector of tech. South Cambridgeshire has become a world renowned biotech centre. Nuneaton & Bedworth dominates the field of automotive-related tech. A cluster of businesses in Woking specialises in air / spacecraft machinery tech. And the City of London continues to house a successful fintech community.

Fastest increase in tech sector enterprises over the last year:

1) Warwick +28%

2) Hackney +25%

3) Rotherham +21%

4) North Lanarkshire +20%

5) North Tyneside +20%

Commenting on the Tech Monitor UK Survey, Tudor Aw, partner and head of KPMG’s Technology Sector, said:

“It is important for the UK to have a strong Tech sector and it is therefore hugely encouraging to see that not only has the UK Tech sector delivered 6 years of continued growth, but that this has happened throughout the country with some 63 local authorities experiencing double digit growth in the last year alone.  We are also seeing increased specialisation within local technology clusters such as Biotech in South Cambridgeshire, AutoTech in the West Midlands and FinTech in London. This creation of tech centres of excellence will create a virtuous circle of attracting global investment and acting as a magnet to the best tech talent.

Although we have seen the number of Tech enterprises grow by a third since 2010, double that of other private enterprises, we can’t take this for granted and it is important we see the Tech Sector be prioritised by national and local government and also focus on key issues such as STEM subject education, investment in regional infrastructure including broadband and an adequate regulatory framework.”

ENDS

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Notes to Editors:About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff.  The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such.

UK Tech Sector Purchasing Managers’ Index® (PMI®) survey data

UK tech sector PMI data is derived from a representative subcategory of approximately 150 tech companies within Markit’s regular PMI® surveys of UK manufacturers and service providers. Tech is defined in this report as technology software, technology services and manufacturing of technology equipment. All figures are seasonally adjusted and smoothed using a three-month moving average, to better highlight underlying trends in the data.

Location quotients for industry enterprises within UK local authorities are calculated from an annual snap-shot of the Inter-Departmental Business register, published by the Office for National Statistics (ONS). The latest available figures were compiled in 2015.

The industry sectors measured by the ONS are based on Standard Industrial Classifications (SICs), which categorise business establishments by the type of economic activity in which they are engaged. As there is no catch-all available for the ‘technology sector’, we have grouped together 16 of the most relevant industrial areas within the SIC classification system, which represent an accurate bellwether for the footprint of ‘technology enterprises’ within UK local authorities.

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