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Tech Nation 2016, Our Second Annual Publication We’Ve Seen Some Real Successes with Tech on the UK’S Digital Economy

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Tech Nation 2016, Our Second Annual Publication We’Ve Seen Some Real Successes with Tech on the UK’S Digital Economy TRANSFORMING UK INDUSTRIES THE RT HON DAVID CAMERON MP THE PRIME MINISTER FOREWORD Britain’s world leading tech sector gives us a competitive edge that is not just EILEEN BURBIDGE CHAIR, TECH CITY UK transforming our daily lives but also our AND PARTNER, PASSION CAPITAL economy – we are a becoming a true Tech GERARD GRECH CEO, TECH CITY UK Nation. It’s also helping us to transform the way Government works. Welcome to Tech Nation 2016, our second annual publication We’ve seen some real successes with Tech on the UK’s digital economy. City UK, but this is not purely about specialist Fuelled by a strong digital growth trajectory, the UK is an evolving startups and digital businesses. Tech is truly Tech Nation. The 2016 report demonstrates the clear contribution transforming the way we do all kinds of that digital technology is making to employment in digital and business, right across the country. traditional industries, and to the economy across the country. Indeed, more than half of all digital jobs now The opportunities are enormous if we are to fulfil our potential aren’t in high-tech hubs of London or Leeds – as a nation driven by digital tech innovation. The journey starts they are in businesses of every description, in with knowing what we have to offer and where we need to get every sector – in those that would not traditionally to, working with a highly supportive Government to create the be considered digital businesses at all. optimum set of conditions for continued growth. The digital economy is expanding at an The response from the digital community and their eagerness extraordinary pace, creating jobs and fuelling to share data in support of Tech Nation 2016 has been growth in regions and cities up and down phenomenal. The entire team at Tech City UK would like to thank the country, adding some £87 billion to the our research partner Nesta, and project partners GrowthIntel, economy and every year, providing security and Github, AngelList, Burning Glass, Crunchbase, dealroom.co, opportunities for working people. Frontier Economics, InvestNI, Leeds Data City, Meetup & Multiple This Government has stood foursquare and everyone who participated in this research project. behind the country’s digital transformation, The picture painted by Tech Nation 2016 reflects the core CONTENTS backing new technologies, investing in values of the digital mindset – always changing, innovating and 3 FOREWORD infrastructure, supporting investment, removing optimising. The result is an industry worth celebrating. barriers to innovation and helping upgrade 4 ABOUT US the digital skills that a modern work force 6 INTRODUCTION needs. And we will continue to back, with all levers at our disposal, the innovation, creativity 8 IN NUMBERS and entrepreneurship that is redefining and 10 KEY FINDINGS strengthening the modern British economy. 26 FUELLING GROWTH 32 PROFILING THE GEOFF MULGAN CEO, NESTA UK DIGITAL Digital technologies are unlike any others Perhaps the most striking message in Tech LANDSCAPE – they change everything businesses do. Nation 2016 is the extent to which digital skills That's why, as this research confirms, digital now bring big rewards, with the average digital 104 PROFILING DIGITAL jobs and activity are becoming ever more job offering salaries over £15,000 higher than SECTORS important in traditionally non-digital areas non-digital jobs. Nesta has been campaigning 114 METHODOLOGY of the economy – from retail to financial for many years to promote digital making and services and the public sector. coding skills, promoting computer science in 118 GLOSSARY The team at Nesta led on the collection the curriculum, and code clubs of all kinds. Here FROM TECH CITY UK IN PARTNERSHIP WITH NESTA 120 PROGRAMME and analysis of the data and drafting of Tech is powerful evidence that I hope will persuade OVERVIEW Nation 2016, crunching the numbers behind the parents and young people to take up digital fantastic graphics in this report. It's a snapshot skills – and not just help themselves to earn 122 P ROJECT PARTNERS of a fast-expanding area of the economy, with and achieve more, but also help the UK become 124 OMMUNITY over 80% of clusters seeing growth in turnover even more of a technological powerhouse C TECH NATION 2016 / PARTNERS or jobs in the last year alone. in the future. @NESTA / @TECHCITYUK \ 2 \ 5 ABOUT US CORE PROJECT PARTNERS We believe the UK is the best place to start and grow a digital business. Through dedicated programmes, we support the digital technology sector’s need for skills, infrastructure, and investment. We gather and share vital information, which informs policymakers. We give digital entrepreneurs a national and local voice. Our work accelerates the growth of digital businesses, in London and across the UK, at all stages of their development. You can see our work in action with Future Fifty, Digital Business Academy, Tech Nation, Upscale, the Tech Nation Visa Scheme, Tech Nation Cluster Alliance, HQ-UK and Northern Stars, as developed and delivered by our sister team Tech North. We aim to make life better for the digital entrepreneur. techcityuk.com ACKNOWLEDGEMENTS State for Trade and Investment; Liam Maxwell, [email protected] GDS; Daniel Korski and Chris Hopkins at No.10 Tech City UK project team: Emma Swift, Downing Street; Andrea Young and Harry Lund, @TechCityUK Lyndsay Baker, Pan Demetriou, Ryan Procter, Department for Culture, Media and Sport, for Lindy Pyrah, Francesca Cahill, Amita Parikh their support on the Tech Nation project. Nesta is the UK’s innovation and Elizabeth Diaferia. We’d like to extend our gratitude to the 1800+ foundation. We help people Nesta research team and report authors; businesses who completed our survey, and to and organisations bring Hasan Bakhshi, Juan Mateos-Garcia and the 36 businesses featured as case studies. great ideas to life. We do this Madeleine Gabriel with assistance from John Thanks to the 135 community partners (see by providing investments Davies and Stian Westlake and thanks to page 124) who helped promote the survey and grants and mobilising Matthew Williams for his input to the analysis. and to those who participated in the research research, networks and Thanks to our data partners for assistance in interviews (see page 117). Thanks to those who skills. We are an independent the research; Tom Gatten, Prashant Majmudar provided additional oversight and content for charity and our work is and Sam Stephens at GrowthIntel; Andy Chung the report; our Tech North colleagues (Laura enabled by an endowment at Angellist; Hal Bonella at Burning Glass; Gene Bennett, Paul Lancaster and Coral Grainger), the from the National Lottery. Teare at Crunchbase; Ian Hathaway at Frontier Tech Nation Alliance who continue to support Nesta is a registered charity Economics; the open data from Meetup and their local tech communities, Jon Bradford, in England and Wales Github; David Greer and Maureen McGuigan at Jonathan Brech, Louize Clarke, Emma Cheshire, 1144091 and Scotland InvestNI; and Alex Craven at Leeds Data City. Neil Cocker, Jamie Coleman, John Connolly, Thanks to our communication partners; Katy Charlotte Crossley, Bonnie Dean, Matt Desmier, FROM TECH CITY UK IN PARTNERSHIP WITH NESTA SC042833. Turner at Multiple, Nick Giles, Eleanor Dampier, David Dunn, Katie Gallagher, Tony Hart, Mike Hall, This work contains statistical data from Jack Davies and Matthew Rowlands at Seven David Hartley, Michael Hayes, Liz Humphries, ONS which is Crown Copyright. The use of Hills, and to our copywriters Hattie Garlick and Matt Johnston, Phil Jones, Fiona Lettice, Kevin the ONS statistical data in this work does not Helena Smith. Thanks to our designers Robin McManus, Nick Milner, Jim Moodie, Steve Orr, imply the endorsement of the ONS in relation to www.nesta.org.uk Worrall at Seven Hills, and Zarina Holmes. Joe Pearce, Emma Philpott, Ben Ravilious, Alan TECH NATION 2016 / the interpretation or analysis of the statistical data. Thanks to The Hon. Ed Vaizey MP, HM Minister Scrase, Lee Strafford, Nick Sturge, Sophie Taylor, @NESTA / @TECHCITYUK [email protected] This work uses research datasets which may not for Culture, Communications and Creative Steve Wainwright, Amy Watson, Tristan Watson, \ 6 exactly reproduce National Statistics aggregates. @nesta_uk Industries; The Rt Hon. Lord Maude, Minister of Doug Ward and Belinda Waldock. \ 7 What’s New Tech Nation 2016 has applied the data-driven approach of the first Tech Nation WHAT IS THE to a much wider set of information. Led by Nesta, DIGITAL TECH ECONOMY? this year’s report analyses data from the Office of Includes all jobs within the Digital Tech National Statistics, Burning Glass online job ad database, Industries and digital tech jobs within GitHub, Meetup users and traditionally non-digital industries GrowthIntel’s pioneering website analysis. The result is an unprecedented understanding of the Digital Tech Economy and its impact on employment, productivity and GVA. Digital Tech Traditional (non-digital) Industries Industries Includes businesses operating in Includes businesses operating in digital technology according to the non-digital industries according to INTRODUCTION ONS, such as computer programming the ONS, such as wholesale and activities, publishing of computer retail trade, education, etc. games, etc. Digital tech businesses are at the heart of The findings of this report shows the There are three job types within the Digital Tech Economy* the UK economy and are playing continued growth of digital tech clusters. These an important role in driving growth. findings are focused upon the areas where The impact of this dynamic sector is digital technology businesses are having the Native Support Transformer profound, predicated on a fundamental greatest impact: economic growth, employment, belief in innovation and doing things productivity and the digital disruption of Digital job in digital Non-digital job in digital Digital job in traditional differently.
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