Technology

The UK is home to a third of all Europe’s unicorns – startups that have reached a valuation of at least $1 billion – with over 40% of these being produced in the last 3 years. Alongside over 150 unicorns, which is more than France, Germany and Sweden’s figures combined, the UK is also home to over 200 future unicorns.

Eight UK cities – Bristol, Cambridge, Edinburgh, Leeds, London, Manchester, Nottingham and Oxford – are home to multiple unicorns.

The UK is the home of European venture capital (VC), with over 40% of new European venture capital raised in the last five years based in the UK. UK-based venture capital investors have raised more than $25 billion in the last 3 years.

UK tech startups raised $21.3 billion in VC investment in 2023. Only the US and China received more VC investment in tech startups in 2023 and the UK raised more than France ($9.3 billion) and Germany ($8.4 billion) combined.

Opportunity highlights

Artificial intelligence (AI)

There are now many applications of AI across a wide range of sectors, from healthcare to manufacturing. The UK is home to the third highest number of AI companies in the world after the US and China.

There are over 3,000 AI companies including more than 1,900 dedicated AI businesses in the UK’s AI industry. These companies generated £10.6 billion in AI related revenues, employed more than 50,000 people in AI related roles and generated £3.7 billion in Gross Value Added (GVA).

The UK ranks third for private capital investment in AI after USA and China, accounting for around half of all AI private capital investment in Europe. Since 2016, UK AI companies have secured £18.8 billion in private investment. From January to October last year, British AI startups raised a record $3.6 billion.

Quantum technologies

The UK is a world leader in quantum technologies and is central to the UK’s future prosperity and security. The UK offers an advanced, well-connected ecosystem of world leading companies, clusters and research institutions.

The UK ranks second in the world to USA for the number of quantum companies, with more than 160 companies active in the sector. The UK has created a significant number of quantum start-ups and scale-ups. The sector currently contributes £1.7 billion in GVA to the UK economy and supports around 20,000 employees across the UK.

Semiconductors

Semiconductors are the core component of all electronic devices and underpin our economy, national security and modern way of life. The UK semiconductor sector has strengths across compound semiconductors, 2D materials, R&D, IP and chip design.

Silicon semiconductor design is a particular strength, with globally significant companies ARM and Imagination Technologies having headquarters in the UK. Our compound design expertise is enhanced through the South Wales Compound Semiconductor cluster which has generated £543 million GVA so far for the UK.

Telecommunications

The telecommunications sector is a good example of where UK companies are growing and innovating. The UK telecommunications sector added £31.8 billion to the UK economy in 2022, with growth expected to have been 8.5% in 2023.

Adastral Park, based in Suffolk, demonstrates the sheer strength of the telecoms sector in the UK. It is a cluster of high-tech telecoms and technology companies including BT and sits at the heart of the UK’s digital ecosystem.

The UK has a substantial base of R&D activity directly engaged in the telecoms sector. This includes a highly skilled, local workforce that has already played a major role in attracting new technology investment.

Fintech

The UK is at the cutting edge of fintech developments and a world leader in innovative payments systems, regtech, insurtech and cyber security. It is the leading fintech centre in Europe – London attracts more fintech investment than the next 13 European cities combined.

The UK’s FPS industry helps ambitious new companies to thrive by providing an established customer base, as well as the financing and services to succeed.

UK fintech represents 11% of the global market share and our shores are home to more fintech unicorns than any other market in Europe. We are also the leading destination in Europe for investors, having secured $5.1 billion across 409 deals in 2023 - more than the next 28 European countries combined.

Cyber security

The UK cyber security sector is growing fast. The sector’s revenue has grown to more than £11.9 billion in 2023, an increase of 13% from 2022.

The UK has nearly 2,100 cyber security firms. It is estimated there are approximately 60,689 Full Time Equivalents (FTEs) working in a cyber security related role across the cyber security firms identified. This reflects an estimated increase of around 2,700 cyber security employee jobs within the last 12 months, an increase of 5%.

The cyber sector continues to have strong representation outside London and the South East, with 50% cyber firms based in other regions across the UK.

Commercial maturity

The UK is home to a third of all Europe’s unicorns – startups that have reached a valuation of at least $1 billion – with over 40% of these being produced in the last 3 years. Alongside over 150 unicorns, which is more than France, Germany and Sweden’s figures combined, the UK is also home to over 200 future unicorns.

Key UK assets

London

London is one of the top global destinations for tech companies looking to expand internationally, having attracted more new international tech companies than any other global city in the past decade. The UK capital’s market valuation has multiplied by 8.8 during this time, reaching a valuation of $649 billion in 2023 and now boasting over 150 unicorns.

It’s also home to research institutes such as Imperial College London and University College London.

Thames Valley

The region is home to over 8,000 digital tech companies, over 6,000 digital tech specialists and several of the world’s top-10 communication giants.

Manchester

Manchester is the UK’s top digital tech city, with a rapidly growing £5 billion tech ecosystem. It’s home to over 10,000 digital and tech businesses, including Google, Microsoft and IBM and has a steady flow of graduates from top research universities such as the University of Manchester.

Cambridge

Cambridge is a world-renowned centre of science and innovation, grown from the intellectual roots of its ancient university. It is Europe’s largest technology cluster and home to over 5,000 high tech firms. The ICT industry employs nearly 24,000 people and has a turnover of £5 billion.

It’s a key innovator, with the highest number of patent applications per 100,000 people in the UK. University of Cambridge and Cambridge Healthtech Institute provide a strong research base.

R&D capability

The UK boasts a thriving research and development scene. The UK’s AI research has the third-highest rate of AI publication citations per capita globally. The Alan Turing Institute is the UK’s National Centre for AI and Data Science and has a partnership with 13 of the UK’s most internationally recognised universities carrying out R&D in AI.

In September 2021, the UK government announced its National AI Strategy, with long-term plans for increased investment to increase the frequency and scale of AI discoveries in the UK.

The UK is home to 19 universities that are recognised as academic centres of excellence in cyber security research, accredited by the National Centre for Cyber Security. Each centre has a proven track record of impactful cyber security research, published in leading journals and conferences worldwide.

The UK Robotics and Autonomous Systems (UK-RAS) network co-ordinates collaboration across the broader robotics industry and provides academic leadership. World-class institutions such as the University of Cambridge and Imperial College London are amongst its members.

Business and government support

Support is available in the form of a knowledge transfer partnership. This is available to firms of any size based in the UK.

The partnerships are provided by UK Research and Innovation, which provides grants to help businesses innovate, grow and develop and connects companies with academic partners to address innovation challenges.

The Science and Technology Facilities Council (STFC) drives innovation in the technology sector by bridging the gap between businesses and pioneering science. It offers support to tech start-ups by offering business incubation programmes, providing the access to facilities, expertise and networking events.

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