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Why the UK is a top tech investment destination

20/02/2023

The economic situation in the UK is currently a bit of a mixed bag. While interest rates have risen again this month, now standing at 4%, the Bank of England has suggested that the UK’s recession will be shorter and shallower than had previously been thought.

In terms of investment, the picture is equally mixed. Post-Brexit, Amsterdam overtook London as Europe’s top share trading hotspot – and recent data reveals that the Dutch capital still remains in the lead.

However, when it comes to tech investment it’s better news for the UK. Figures released by the Dealroom for the Digital Economy Council show that the UK ended 2022 as Europe’s top tech ecosystem – and the third best in the world, behind the US and China. In the last year, the fastest-growing tech companies in the UK raised £27bn – and a total of £97bn in the last five years.

But why is the UK such an attractive place for tech investment? 

 

Top talent

The UK government has said that “upskilling and reskilling” are major contributor to the UK’s tech dominance. UK businesses are increasingly taking on entry-level tech workers, with stats from Adzuna showing that the number of such entry-level roles rose from 6,596 in November 2021 to more than 15,000 in late 2022. 

There has also been a strong focus on encouraging more women into tech – a traditionally male-dominated sector – with startups like Code First Girls aiming to break the gender gap. 

 

The next Silicon Valley? 

In December 2022, the government appointed five experts to work alongside Sir Patrick Valance in a bid to turn the UK into “the next Silicon Valley”. 

These experts will conduct a review of the UK tech industry, establishing any barriers to economic growth and innovation and working to overcome these. The plans will also focus on improving regulation within the sector, keeping it robust while encouraging innovation and competition. 

 

More value for investors

But what does this mean for investors? As well as attracting more venture capital than other European nations, data shows that the UK is also creating greater value for investors. This time last year, the UK had 116 unicorns and 204 futurecorns. Now, those figures stand at 144 and 237 respectively. 

While there are still plenty of global challenges to contend with, the UK tech sector’s pro-innovation approach and plans – plus its attractiveness to overseas investors – suggest that growth could well continue at a steady rate. 

 

“Stable Rise Limited is not authorised or registered by the Financial Conduct Authority. The marketing materials are not intended to provide financial advice nor promote any individual financial products.”

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