Tech Nation, April 24, 2019 4 min read
In a first-of-its-kind research report, we have found that the UK is a global centre for socially responsible technology innovation. ‘Tech for social good’ companies were worth £2.3 billion in 2018, with a turnover of £732 million – larger than the amount generated by the manufacture of consumer electronics in the UK (£634 million). Nearly half (45%) of the 490 companies identified are at seed stage, highlighting the contributions of young, dynamic businesses in areas such as edtech (10.3% of total companies), fintech (9.2%) and artificial intelligence (8%), and the sector’s great potential for growth.
Read the full Tech for Social Good report >
The report arrives as the global spotlight is intensifying on the social impact of disruptive technologies. In the UK, the Cabinet Office has launched a £20m ‘GovTech Fund’ to help private-sector innovators address public-sector challenges – such as finding a way to accurately identify still propaganda images produced by the extremist Islamist group Daesh.
Speaking ahead of a tech for social good roundtable due to be held today at Downing Street, Digital Secretary Jeremy Wright, said: “I’m pleased to see the UK’s ‘tech for social good’ sector is not only having a positive societal impact but is also making a significant contribution to the economy.
“’We are working hard to support those in the field by improving charities’ digital skills, boosting access to finance for social tech ventures and backing an awards scheme to celebrate up-and-coming entrepreneurs. I look forward to meeting some of the sector’s leading minds today to discuss how we can make sure the UK is a global leader in this area.”
DeepMind, the London-based artificial intelligence company bought by Google in 2014, is one of the UK’s most striking tech success stories. Since the acquisition, founders Demis Hassabis and Mustafa Suleyman have been forthright about their ambitions to use the DeepMind’s expertise to tackle some of the world’s thorniest social and political problems, from healthcare to climate change.
Other notable examples of UK businesses striving to combine profit and social purpose include TechPixies, which addresses the gender gap in entrepreneurship by providing women with online training in social media and digital marketing; CareRooms, an Airbnb-style network that links patients recovering from a hospital stay to hosts with spare rooms; and Ethical Angel, which helps businesses and employees pick ethical causes to support, and quantifies their impact.
Gerard Grech, CEO of Tech Nation said: “This study provides a fascinating analysis of a fast-emerging sector within ‘tech’. These purpose and profit startups range from platforms such as fashion recycling platform Depop to surplus food distribution platform, Olio. We are witnessing a new driver in tech startups. While the profit motive remains high, millennials are increasingly driven by the desire to make a meaningful impact on society. Harnessing the huge potential of tech allows us to really think big. We can have both economic growth as well as positively impacting society and the environment.”
The not-for-profit segment of tech for social good is enjoying exponential growth: over half of the organisations currently registered with Companies House (53%) were incorporated after 2014, and 2017 was the highest year on record for registrations.
Meanwhile, the report emphasised the importance of social impact investors that value both social and financial return, such as Bethnal Green Ventures and Big Society Capital. To date, profit-seeking tech-for-good businesses in the UK have collectively raised £1.09 billion in venture capital.
However, for-profit social tech companies also confront challenges. The number of incorporations has dropped since 2016. The high percentage of early-stage startups in the area highlights the need for policymakers and investors to support companies as they scale and grow – particularly given social tech firms will struggle to match the superstar salaries offered by more established tech giants.
Sarah Wood, co-founder and Chair of Unruly, and board member at Tech Nation said: “At a time of uncertainty and flux, the UK is poised to lead the world in applying technology for strategic social ends. Our nation’s social safety net, coupled with a lively non-profit sector and bustling tech ecosystem, allow for a concentration of energy and talent that’s second-to-none. We have all the foundational pillars we need to be the global hub for tech-for-good; now we need to keep up the momentum and make sure we nurture these businesses as they expand their horizons beyond our shores.”
The Tech for Social Good report is supported by Berenberg and BT who champion the sector. Through their support of the report, BT and Berenberg aim to bring heightened awareness to how businesses are using technology to make a positive impact, and to support disruptive technologies which are improving people’s everyday lives.
Richard Brass, Head of Wealth and Asset Management UK at Berenberg, said: “Tech Nation’s analysis is a useful step towards understanding the “tech for social good” landscape across the UK. Alongside BT, we are hopeful that it will bring greater visibility and awareness of how businesses are using technology to have positive social impact. Our wish for this report is that it may act as a catalyst for further engagement and ultimately investment. We look forward to continuing our support of this sector.”
Andy Wales, Chief Digital Impact and Sustainability Officer at BT, said: “We are all living in a new world that is being shaped and created by the rapid acceleration of technology and at BT, we are keen to find and support disruptive new technologies that improve people’s everyday lives. We also know that collaboration is important, and it’s great to have worked with Tech Nation and Berenberg on this report, and we will continue to support and collaborate across the sector to help more people than ever before benefit from ‘Tech for Good’.”
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