Risk of deepening tech divisions in regions

Gerard Grech, chief executive of Tech NationGerard Grech, chief executive of Tech Nation
Gerard Grech, chief executive of Tech Nation
Regional tech hubs - including Leeds - continue to thrive despite the challenges posed by COVID-19 but there is a risk of the crisis deepening regional disparities in the UK, particularly around access to finance, according to a new report.

Figures compiled by industry body Tech Nation and Dealroom for the Digital Economy Council, show that UK digital tech companies are continuing to attract investment, are still advertising vacancies and are optimistic that they can navigate the crisis.

Although London is still a key driver of digital tech jobs and growth, tech hubs in Leeds, Manchester and Bristol are continuing to thrive. A number of large regional fundraising deals have already been completed this year, the report said.

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The report, released today during London Tech Week, comes as the government launches a range of measures to help UK tech companies increase digital trade and investment opportunities overseas.

In Yorkshire, digital tech companies turned over nearly £4bn last year. More than 53,000 people are employed in digital tech in the region. Leeds is home to unicorn companies Callcredit (now TransUnion) and Sky Betting and Gaming, which are both worth more than $1bn.

In 2019, the city advertised 56,149 digital tech roles, making up over 21 per cent of jobs in the region. However, the report said there is a risk of the crisis deepening regional disparities in the UK particularly around access to finance. National and local interventions need to be targeted to ensure the whole country has access to the support required.

Gerard Grech, chief executive of Tech Nation, said: “Many businesses are adapting and innovating to support the fight against coronavirus, demonstrating the resilience and resourcefulness of the UK tech sector.

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“Although we are seeing many tech companies closing key rounds of funding, the picture is being monitored closely at Tech Nation, especially across different parts of the country, where access to finance may not be as strong.”

The industry body said the UK outperforms all of its European neighbours on measures including investment raised by companies and capital raised by investors, which will help sustain the sector for the long term, the UK outperforms all of its European neighbours.

London-based companies have raised $4bn since the start of January, more than Paris, Stockholm, Berlin and Tel Aviv combined.

Tens of thousands of jobs were advertised in cities across the UK in 2019 and the start of 2020, with salaries continuing to grow above inflation in almost all regions. The median salary for tech roles in Leeds was £36,500, over 12 per cent higher than the median salary across all sectors.

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Digital Secretary Oliver Dowden said: “The UK’s tech sector has shown resilience in these challenging times and the levels of investment in the year to date have consolidated our Europe-leading position.”

The UK’s tech sector went into the coronavirus crisis in a strong position. From January to the end of May, tech companies raised $5.3bn, compared to $4.1bn in the rest of Europe. However, many of these deals were agreed in principle before the onset of the virus, which has reset expectations for the second half of the year.

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