Today, we are delighted to launch our Unlocking Global Tech Report assessing the value of UK digital tech exports and exploring the opportunities and challenges for digital tech companies to expand and scale in different regions around the world post COVID-19. It has been produced in support of our London Tech Week event on 8th September.
The report has found that the UK was the 5th greatest digital tech services exporter in the world, at £23.3bn in 2019, sitting behind India, the USA, China and Germany in the global rankings. This position is driven by a relatively high number (7,497) of high growth exporting tech companies in the UK, many of which are yet to realise their full exporting potential.
Digital Minister Caroline Dinenage said: “The UK is Europe’s tech capital and these figures reinforce our industry’s reputation as a truly global player.
“It’s great to see our digital exports booming which will help create more jobs and opportunities for people up and down the country.
“We are investing heavily in the nation’s digital infrastructure as well as in people’s digital skills which puts British firms in an unparalleled position to seize new, global opportunities on the horizon.”
UK digital tech services currently export a much greater value of goods than they import, generating a significant trade surplus of 55% in 2019. This is a favourable comparison to the average trade surplus among the top 57 countries globally, which is 48%. UK digital tech trade surplus has increased by 68% over the last four years – from £8.7bn in 2015 to £12.8bn in 2019 – and is now standing just behind the Insurance sector (£16.9bn) and Financial Services (£43.4).
The report also shows that the US was the biggest importer of global digital tech services in 2019, valued at £34bn, followed by Germany at £33bn and China at £21bn. India, Japan, and Brazil have seen the biggest growth in the level of tech services they import – by 29%, 24% and 17% respectively between 2018 and 2019.
Boosting export growth
According to recent projections (Oxford Economics, August 2020), digital tech is currently on the path to boosting exports by an additional £8.15bn, bringing total digital tech exports to £31.45bn by 2025.
Tech Nation’s Chief Executive Gerard Grech comments: “The UK is a natural home for many scaling tech businesses, and there are a proportionally high number of scaling tech businesses located here that are already well-established in delivering domestic tech services. The UK is also third in the world for the number of UK tech unicorns, and number one in Europe. These factors give us a strong conviction that UK founders, government and industry leaders should all be gearing up to double tech exports by 2025, in the aftermath of both the pandemic and Brexit. By doubling exports, UK tech could contribute an additional £23bn to the economy per year by 2025 and move up the ranks to become a top global exporter of tech.”
Exports Minister Graham Stuart said: “Today technology plays a vital role in almost all sectors and its importance has only increased during the pandemic. So, it’s unsurprising that the sector is and will continue to drive our economic recovery.
“With UK digital tech exports projected to grow by 35% by 2025, this report shows the potential UK exporters have in the sector. The trade agreements that we are currently negotiating will create an exciting future, allowing businesses to export their goods and services across the world more easily.
“London Tech Week is a fantastic opportunity for British businesses to showcase their talent and provide innovative solutions to the challenges we face. Our tech innovators come from every region of the UK, in fact 25% of Europe’s cities with the highest investment in technology last year are located here in the UK, proving the strength of our world-class tech sector.”
The Global Opportunities Index
Through 2020 so far, the world has changed rapidly – pushing people across the world to think differently about connectivity, trade and digital commerce. All tech leaders need a truly international growth outlook.
Looking ahead at where global opportunities lie for UK digital tech service companies to boost exports, we have created a Global Opportunities Index that ranks the top 25 countries in order of which are the most attractive countries to do business with.
The USA and the UK are first and second in the world respectively for digital tech trading opportunities. This is driven by UK online retail and e-commerce sales, which were valued at £688.4bn (which also includes domestic sales) in 2018 – more than 8x that of France, with £82bn.
For UK tech companies, Singapore and Brazil are the fastest rising global opportunities for trade, climbing 5 and 17 places respectively in the country rankings for global tech opportunity between 2019 and 2020. Post-Brexit, UK tech companies should be looking to the US, Israel, Canada, Germany and The Netherlands as the most attractive export markets.
HM Trade Commissioner Natalie Black CBE said: “Asia Pacific is the growth opportunity for UK tech companies looking to expand overseas. It is great to see Australia, Singapore, Japan and South Korea all ranked in the Top 25 countries on Tech Nation’s Global Opportunities Index. I look forward to working with Tech Nation through our Digital Trade Network to help more UK tech firms grow in this part of the world.”
The rankings are determined by factors that contribute to the attractiveness of a location for doing business, with an emphasis on digital tech products and services. Variables such as infrastructure, access to talent and education levels, ease of doing business, regulation, language and consumers are weighted and aggregated to give a sense, for each country, of the opportunity for trade.
Take a look at the full ranking:
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Read the full Unlocking Global Tech Report.
Join Tech Nation’s ‘Unlocking Global Tech’ event on Tuesday 8 September, part of London Tech Week, where we will navigate across the globe, hearing from leading tech figures in Australia, Singapore, Europe, the UK and US to discover how to expand and scale in different regions post Covid-19. Register free here.