The growth platform for tech
companies and leaders
UK TECH FOR A
CHANGING WORLD
TECH NATION REPORT 2020
The growth platform for tech
companies and leaders
UK TECH FOR
A CHANGING
WORLD
TECH NATION
REPORT 2020
The Tech Nation Report has been the UK’s State of the Nation report on tech since 2015. Each year we have monitored the growth of the sector, and provided information about opportunities and challenges.
As emerging and maturing technologies continue to disrupt and transform incumbent industries, and tackle some of the world’s biggest challenges, the report this year focuses on UK tech for a changing world. As we live through the fastest pace of change in history, UK tech is at the forefront of some of the biggest questions, and providing the answers.
FOREWORDS

The Prime Minister
The Rt Hon Boris Johnson MP
I am delighted to introduce this report, which confirms the United Kingdom's standing as Europe's number one Tech Nation.
In the space of a single year, we have shattered all records, with technology investment in the UK soaring by 44 per cent to over £10 billion - more than France and Germany combined. Britain is second in the world for fintech, with investment rising by over 100 per cent in the last year alone. And we are number one in Europe for the emerging technologies that will transform the lives of every single human being.
In this report, you will read of the world's first artificial intelligence blood test, pioneered by a British company, ClinspecDX, which will accelerate the detection of brain cancer and allow the early treatment that saves lives.
You will learn how Great Ormond Street Hospital have employed Virtual Reality to let children, who may never have been to hospital, calm their fears by roaming its wards and meeting other patients before they even step through the doors.
You will discover how tech companies are increasingly striving not solely to maximise profits but to achieve a wider purpose, deploying the arsenal of technology against the giant evils of hunger, poverty and disease.
So this report only fortifies my optimism in our ability to remake the world wondrously and benignly – and this Government is determined to seize the opportunity. We are investing in education, infrastructure and technology, levelling up across the regions of our country. We are doubling investment in basic science research, and using the newfound control of our immigration system to fast track the talent for our continued success.
We are also leading the global debate on the ethical and responsible use of technology, ensuring that new advances reflect our values of freedom, openness and pluralism.
In doing so, we can unleash the boundless ingenuity and inventiveness of our Tech Nation to surmount the limits that once constrained humanity and vanquish the perils that once ended so many lives.

Eileen Burbidge, Chair, Tech Nation and Partner, Passion Capital and Gerard Grech, Chief Executive, Tech Nation
Tech is rapidly evolving the way we live and work. Game-changing companies are positively transforming societies and economies - shifting global boundaries and redefining growth for the 21st century.
Companies at the pinnacle of growth, scaleups, are becoming an ever more important part of UK tech, with nearly 82% of tech sector investment now being made into these job-generating, value-creating powerhouses of the future. At Tech Nation, we specifically work with these tech companies every day through our growth and sector programmes, which are designed to fuel growth by unlocking the potential of leadership teams.
REPORT PARTNERS
Thank you to our Tech Nation Report partners Openreach, and BNP Paribas Real Estate.


BNP Paribas Real Estate partner commentary
We are living in times of unprecedented change, with tech entrepreneurs and innovators leading the way. Estimates suggest that the digital economy alone accounts for $11.5 trillion globally, or 15.5% of global GDP, and employs 2.9m people in the UK, up from 2.1m in 2017, a truly seismic shift with more to come.
The UK is already a major winner in the tech sector, with a record £10.1bn invested in 2019 (up 44% year on year). Five of Europe’s top 20 destinations for investment – London, Cambridge, Bristol, Edinburgh and Oxford – contribute to the UK having the largest investment share of any European country.
Openreach partner commentary
This report’s vision of technological success and potential in the UK is exhilarating. If current investment trends continue, we’ll overtake China next year as the world’s second largest tech country, behind only the US. A remarkable feat.
And what’s even more encouraging is that our success is being built on a network of tech clusters. London, Cambridge, Bristol, Edinburgh and Oxford - all come in the top 20 European cities for tech investment. This regional spread shows the strength of our communities, industries, ingenuity – and importantly our digital networks. We simply couldn’t be in this position without the transformative power of connectivity.
DATA PARTNERS
In creating this report, the Tech Nation Insights team used data from Aon, Dealroom, Pitchbook, Crunchbase, gsma and EY. Thanks to Aon and Dealroom for their support in using this data.




Key statistics
UK tech is scaling
1.0
INVESTMENT
1.1 GLOBAL INVESTMENT TRENDS
UK tech investment increased by 44% over the last year - breaking records
£10.1bn was invested in UK tech in 2019, breaking the all-time record for tech investment in the UK.
VC investment in tech companies by country in 2019
Source: Tech Nation 2020; Dealroom 2020
The UK is third in the world for tech investment for another year running, behind only the US and China, and raising more than France and Germany combined.
The rate of investment growth made into the UK has accelerated relative to European counterparts, from a decrease of 17% in 2018, to a rise of 44% in 2019. The investment made into the UK is now more than that made into Germany and France combined.
China has recently witnessed a slowdown in economic growth, potentially accelerated by the escalation in US/China trade tariffs since mid-2018, and the nascent Novel Coronavirus outbreak from the end of 2019.
China’s economic growth decelerated by about 0.1 percentage points per quarter in 2018 (from 6.8%, to 6.7%, 6.5& and 6.4%). In 2019, growth decelerated at a quarterly rate of 0.2 percentage points (from 6.4% growth in the first quarter, to 6.2% in the second and 6% in the third).
This may, in part, contribute to lower investment in Chinese tech companies, due to geopolitical and economic uncertainty.
UK tech companies have continued to attract global attention for their investment potential. A maturing ecosystem, perhaps encouraged by a weak pound, have led to new heights for UK tech investment, significantly bolstered by investment raised from overseas.
Scaleup nation
81.2% of UK tech investment was made into high-growth, high-productivity potential scaleup firms - those with at least 10 employees and growing by at least 20% year on year.
This trend can be largely expected, as a maturing and more confident ecosystem leads to larger, older and more developed companies raising later rounds of investment. Just a few years ago so-called 'megarounds' of investment of over $100m were almost unheard of in the UK, where now they are common place.
However, this is an important trend to monitor, as if continued unchecked, we could see a diminution in the volumes of capital being invested in early-stage startup tech companies, which could be damaging for the pipeline of prospective high-growth companies, and entities in their supply chains.
London and Cambridge are in the top 10 European cities for 2019 investment
VC investment in tech companies - top 10 cities in Europe in 2019
Source: Tech Nation 2020; Dealroom 2020
London is head and shoulders above the next closest European city for tech investment, with over double that accrued by Berlin from 2014 to 2019. Cambridge, Bristol, Edinburgh and Oxford also make the top 20 European cities for tech investment.
London leads Europe for tech investment, with higher VC investment in 2019 than Berlin, Munich and Paris combined.
Source: Tech Nation and Dealroom, 2020
Late-stage UK tech is rocketing
UK Series A and B, and Series C investment have rocketed over the last year - by 28% and 71% respectively.
Series A & B VC investment into European tech companies in 2019
Source: Tech Nation 2020; Dealroom 2020
Growth at every stage for UK tech
Change in VC investment (2018-2019) into tech companies by growth stage
Source: Tech Nation and Dealroom, 2020
VC investment change (2018-2019) by stage of growth shows a mature, scaling UK ecosystem. Consistent increases, as opposed to volatile increases and decreases, illustrate the stability of the UK tech sector relative to some other European nations, where a lower baseline of investment is seen at each stage of company growth.
1.2 UK INVESTMENT
UK tech GVA has rocketed over the last eight years
Fuelled by increasing levels of tech investment, the UK tech sector’s GVA or Gross Value Added contribution (which is the Gross Domestic Product + Subsidies on products - Taxes on products) is now growing six times faster than that of the wider economy.
Digital tech contributed £149bn in GVA in 2018, accounting for 7.7% of the UK economy. Over the last eight years, digital tech sector GVA has increased by 43%, from £104.2bn in 2010 to £149bn in 2018.
GVA contribution made by companies in the digital tech sector from 2010 to 2018
Source: Tech Nation 2020; DCMS 2020
Conscientious investor
Purpose-driven UK tech companies are coming to the fore, with investment in tech companies addressing UN Sustainable Development Goals almost doubling in the last year, and growing by over 9x since 2013.
VC investment into companies aligned with UN Sustainable Development Goals
Source: Tech Nation 2020; Dealroom 2020
UK VC investment in hybrid tech fields, like Healthtech and Fintech rises
VC investment in the UK by tech subsection (2014-2019)
Source: Tech Nation and Dealroom, 2020
The UK is second only to the US for Fintech investment
UK fintech is a competitive strength for the UK economy, leading in both investment and continued growth.
Fintech investment in the UK more than doubled from 2018 to 2019, with £4bn invested in fintech firms in 2019. This makes fintech the UK’s largest tech sub-sector for investment, with still huge potential for continued growth. 44% of Europe's fintech unicorns (companies valued at over a billion dollars), and 46% of Europe’s fintech 'future unicorns' (companies valued at $250m-$800m, therefore with a realistic potential of achieving unicorn status in the near future) are based in the UK. The UK's 29 fintech companies with more than billion-dollar valuation make up close to 40% of all UK unicorns, illustrating fintech's importance to the UK tech economy. The UK is currently behind only the US for fintech investment, but the international field is gaining strength. Germany saw a 61% increase in investment to £1.1bn last year and Sweden, an astonishing 417% increase to over £750m, albeit these are growing from a much lower base.
The UK's historic strength in financial services, combined with world-leading policy and regulation in the space such Open Banking and the FCA Fintech sandbox have contributed to building a world-renowned fintech powerhouse in the UK.
VC investment made into Fintech companies in 2019
Source: Tech Nation and Dealroom, 2020
UK cleaning up in Cleantech
Cleantech companies - working to reduce negative human environmental impact - attracted 73% more VC investment in 2019 than in 2018, almost double the rate of China at 37%, whilst the US cleantech investment contracted by 36%. Sweden witnessed the largest increase, from £80m in 2018, up over 1300% to £1.13bn in 2019.
VC investment made into Cleantech companies from 2014 to 2019
Source: Tech Nation and Dealroom, 2020
UK AI smartens up
The UK is a global top performer for VC investment into Artificial Intelligence and deep tech companies, however, Israel is catching the UK to third place. UK AI raised £2.42bn in 2019, compared to £2.36bn in Israel, with Israel's total growing 21% from 2018 compared to 19% in the UK. Continued support from government in seeding research and development heavy processes will be necessary to keep the UK in the top three ranking position.
VC investment made into AI and Deeptech companies from 2014 to 2019
Source: Tech Nation and Dealroom 2020
1.3 UNICORNS
Unicorn Kingdom
The unicorn class of 2019:








8 tech unicorns - companies valued at over $1bn - were created in the UK in 2019, bringing the UK’s total count to 77 since 1990.
Unicorn companies by country from 2010 to 2019
Source: Tech Nation 2020; Dealroom 2020
Unicorns in the making?
The number of “future unicorns” - companies valued between $250m and $800m - rose by 27% to 95 in 2019, showing that the pipeline of prospective billion dollar-valued firms is healthy and growing.
There were 95 of these high-value scaleups in the UK in 2019, including companies like Atom Bank in the North East of England, Depop in London and Crisp Thinking in Yorkshire.
45% of the UK’s high-value scaleups are based outside of London - a positive sign that all nations and regions in the UK are building a pipeline of global tech leaders.
High value tech scaleups in the UK, France, Germany and Israel from 2014 to 2019
Source: Tech Nation 2020; Dealroom 2020
The UK's 95 companies valued at $250m-$800m are:
Achilles Therapeutics, Artios Pharma, Atom Bank, Azeria Therapeutics, BBOXX, Behavox, Blockchain, Bulb, ByBox, Carrick Therapeutics, Cell Medica, Citymapper, CloudSense, Concentra, Contino, ContractPod, Crescendo Biologics, Crisp Thinking, Croud, Culture Trip, Currencycloud, Curve, Depop, Egress Software Technologies, Eigen Technologies, Elvie, Enterprise Therapeutics, Evox Therapeutics, Exponea, F2G, Fnality International, Freeline Therapeutics, Gigaclear, GlobalWebIndex, GoCardless, Gousto, Green Biologics Ltd, Gryphon Group Holdings, Gyroscope Therapeutics, Healx, Huel, iD, Immersive Labs, Inivata, Juvenescence, Kymab, LendInvest, Lyst, made.com, MelodyVR, MISSION Therapeutics, Monese, MoneyFarm, Moonbug, Netsparker, Nutmeg, Oodle Car Finance, Orbex Space, Osler Diagnostics, Otro, Oxford Photovoltaics, Pharmacy2u, Pollen, Pollinate, PPRO, Privitar, Prodigy Finance, Quanta Dialysis Technologies, QuBit, Quell Therapeutics, Rapyd, Raspberry Pi, RateSetter, Receipt Bank, ReViral, Secret Escapes, Setl, Snyk, Soldo, Sonovate, StarLeaf, Starling Bank, Tessian, Tide, TotallyMoney, Tray, Truphone, UKCloud, UKFast, Ultrahaptics, Unily, VST Enterprises, Wejo, Zego, and Zopa.
Explore these companies and more on the Data Commons of UK tech.
1.4 GLOBAL CAPITAL
UK tech is a global investment beacon
VC investment into UK tech companies from the US and Asia from 2014 to 2019
Source: Tech Nation 2020; Dealroom 2020
£4.9bn was invested into UK tech companies by US and Asian investors in 2019, accounting for 45% of all investment made into UK tech. 24% of investment was made by US investors, and 21% from Asian investors.
This is a strong health indicator for UK unicorns of the present and future, and of the UK economy, given that the top 30 foreign-funded tech companies in the UK have created more than 5,000 UK jobs.
UK bullish in China swap
If the UK and China see the same changes in tech investment between 2019 and 2020 as they did between 2018 and 2019, the UK will overtake China as the second tech nation, behind only the US - with £14bn compared to China’s projected £8.3bn.
Projected VC investment (extrapolating trends from 2018-2019) into tech companies by country from 2020 to 2022
Source: Tech Nation 2020; Dealroom 2020
Using these projections - we can see that if Europe and the US see the same changes in tech investment for the next three years to 2022 as they did between 2018 and 2019, Europe will overtake the US as the top tech cluster for investment in the world with $63.4bn in 2022
2.0
EMERGING TECH
The UK is 3rd in the world for investment in crucial emerging technologies
The future of innovation lies in the use of Artificial Intelligence, Robotics, Cybersecurity, Blockchain, Internet of Things (IoT), Virtual Reality (VR) and Augmented Reality (AR). AI dominates emerging technologies as investment continues to go up and to the right.
Most companies that have been instrumental in developing innovative technology have been involved in developing multiple technologies simultaneously, like robotics and cybersecurity.
Global investment trends in emerging technologies (2015-2019)
Source: Tech Nation 2020; Crunchbase 2020
Note: AI refers to artificial intelligence, Ro to robotics, CS to cybersecurity, BC to blockchain, IoT to Internet of Things, VR to virtual reality, and AR to augmented reality.
The top 10 countries worldwide raised 91% of all emerging tech investment in the last 5 years
The US accounts for the lions share of global emerging tech investment, with over £75bn raised since 2015.
Total VC investment in emerging technologies (£) (2015-2019) by country
Source: Tech Nation 2020; Crunchbase 2020
10 global cities alone raised 44% of the total emerging tech funding in the last 5 years
Total VC investment in emerging technologies (£) (2015-2019) by city
Source: Tech Nation 2020; Crunchbase 2020
2.1 GLOBAL INNOVATION
2.1.1 Artificial Intelligence
UK on a Machine Learning curve
Top 5 countries in Artificial Intelligence from 2015 to 2019
The US attracted 56% of global AI investment in the last 5 years, with China in second place. The UK is third in the world for levels of AI investment, and second by deal count, and the only country of the top 5 AI nations to have demonstrated consistent positive year-on-year growth for the last 5 years.
Source: Tech Nation 2020; Crunchbase 2020
2.1.2 Robotics
Hardware is hard
Robotics endured an investment set-back in 2019 by overall global investment and number of deals completed, perhaps reflecting the old cliche that “hardware is hard”.
Israel and Canada bucked the trend by growing their robotics investment figures in 2019, but such is the dominance of the US and China in Robotics that overall investment plummeted from £9.1bn in 2018 to £7.1bn in 2019.
Top 5 countries in Robotics from 2015 to 2019
Source: Tech Nation 2020; Crunchbase 2020
2.1.3 Cybersecurity
Where there’s a threat, there’s a cheque
After relatively stable global investment levels between 2015 and 2018, cybersecurity saw a big 2019 surge. The spike may reflect increasing geopolitical tensions globally, and the ever increasing number of attacks, with Cisco reporting that they alone blocked 7 trillion cyber threats in 2019. Assuming continued nefarious activity, we can assume a continued trend in cybersecurity investment to tackle it.
Global cybersecurity investment from 2015 to 2019
Source: Tech Nation 2020; Crunchbase 2020
Unsurprisingly it is the US and China that are the cybersecurity big hitters, closely followed by Israel, the UK, and Ireland.
2.1.4 Blockchain
Blockchain reaction
The blockchain industry saw a surge of investment between 2017 and 2018, followed by a plunge in 2019.
The Cayman Islands registered high on the list of investment nations (2nd) due almost entirely to a single year-long Initial Coin Offering (ICO) by block.one (EOS token), which closed in 2018 raising over £3bn.
Blockchain may have reached peak hype in 2018 as crypto-asset prices crested, however, blockchain technology’s potential in areas other than currency are vast. Once we start seeing the mature technology applied to the right problems, we may see yet another surge of investment, as blockchain and Web 3.0 change the world.
Top 5 countries in Blockchain from 2015 to 2019
Source: Tech Nation 2020; Crunchbase 2020
- When we looked at Blockchain investment by city, we found that the top 10 were the most global of any of the emerging technologies investigated, based in 10 countries: Cayman Islands, USA, UK, Singapore, Vietnam, Switzerland, China and South Korea.
2.1.5 Internet of Things
Connecting the dots
Global investment in Internet of Things from 2015 to 2019
Source: Tech Nation 2020; Crunchbase 2020
Internet of Things (IoT) and connected devices saw a surge of investment in 2017 and 2018, followed by a considerable cut in 2019.
As chatter and excitement over smart homes and cities died down, the analysis revealed an uncertain future of IoT. Though as IoT is tightly connected to AI and robotics, investors may become more interested when the industry finds ways to integrate IoT devices with other emerging technologies, creating value by connecting the dots.
2.1.6 Virtual Reality and Augmented Reality
Reality check
Virtual Reality (VR) saw a huge investment spike in 2017. That said, the VR industry is gaining momentum with the increased investment in 2019 compared to 2018.
The UK is well represented as the third most attractive destination for global VR capital, after the US and China, and ahead of Israel and Switzerland. This is built on a strong domestic gaming clusters across the UK legacy; additionally the UK is producing some of the most innovative cross-industry applications for VR technology. At Great Ormond Street Hospital, VR is being used to allow children to familiarise themselves with the halls of the hospital from the comfort of their own home before having to be physically there, as well as being used by surgeons to explore complex vascular networks in preparation for a world-first operation.
Global investment in VR and AR from 2015 to 2019
Source: Tech Nation 2020; Crunchbase 2020
Unlike the VR industry, the Augmented Reality (AR) industry has enjoyed more consistent investment growth except in 2018, with 2019 a record year globally. Of the top 5 countries for AR investment, the US, Israel, and the UK each raised record-high investment in 2019.
Source: Tech Nation 2020; Crunchbase 2020
2.2 EMERGING SECTORS
Technology verticals such as Artificial Intelligence and Blockchain are exciting for their diverse application potential, and are fuelling the emergence of new sub-sectors of applied technology, that are disrupting incumbent industries and tackling some of the world’s biggest challenges.
The UK is a world leader in impactful disruptive applied innovation.
- Agritech, the sector disrupting farming and agriculture, garnered £1.84bn of investment in 2019 compared with £1.06bn in 2016. With such resources behind it, and the size of the industry it is addressing, Agritech is one of the most important technology sectors worldwide.
- Healthtech companies - such as UK-based Voscuris which uses Blockchain technology to share client data safely between clinical professionals, or ClinSpecDx which uses AI to diagnose blood cancer - are highlighting how emerging technologies are solving some of the most complex health problems, and enhancing our way of life. In 2019, worldwide investment in Healthtech reached a staggering £8.7bn.
- Cleantech - acting to reduce negative human environmental impact - will be a key component of any sustainable future, and is at the forefront of achieving the United Nations (UN) Sustainable Development Goals. It gathered £17.93bn of investment last year.
In 2019, Agritech, Healthtech and Cleantech received £2.5bn in the UK, compared to £13.7bn in the US, £3.6bn in China, and £677m in France.
2.2.1 Agritech
Smart growth
Artificial Intelligence is vital in agriculture and farming worldwide, with its ability to solve complex issues with ease. In 2017 investment in European Agritech that utilises AI, was at £181m. This fell to £21m in 2019, though an Indigo Agriculture deal in early January 2020 closed for £152m. In the Americas, AI Agritech went from £401m in 2017 to £323m and in Asia from £7m to £16m.
Robotics and mechanical automation has a long history in agriculture. In the UK, companies such as The Small Robot Company utilise Robotics in Agritech to improve how food is farmed on a mass scale. Between 2017 and 2019, Europe saw a huge increase in investment related to Agritech and Robotics, from £3m to £43.5m.
Internet of Things (IoT) devices are critical for growth and advancement in Agritech. Smart farming devices help to make farming more efficient, by monitoring climate conditions and powering data-driven smart farming.
VC investment in technology applications to Agritech by global region in 2019
Source: Tech Nation 2020; Pitchbook 2020
2.2.2 Cleantech
Climate controlled
AI can be used in Cleantech in applications such as climate modelling and deforestation mapping. UK-based Cervest uses Earth Science AI to bring clarity to decisions on climatic and extreme events.
Robotics can help in Cleantech solutions too, by for example offering increased performance compared to mechanical recycling. In Europe, funding for robotic cleantech increased from £450k in 2017 to £3.59m in 2019. In the Americas, it increased to £24.8m in 2019 from £1.8m in 2017, and in Asia, it was £7.9m in 2017 which increased to £12.9m in 2019.
IoT technology also has the ability to revolutionise Cleantech. IoT devices reduce waste in farming and agriculture, enhancing sustainability. Even in the home, smart metres are improving consumer energy efficiency.
VC investment in technology applications to Cleantech by global region in 2019
Source: Tech Nation 2020; Pitchbook 2020
2.2.3 Healthtech
Vital signs
Healthtech companies using Artificial Intelligence have been hugely successful in the UK. Companies such as Babylon Health, Healthy.io and Healx have attracted total investment of £623.56m. In Europe, investment increased from £108m in 2017 to £712.8m in 2019. In the Americas, investment was £404m in 2017 which increased to £1.42bn in 2019. In Asia, this was £649m in 2017 and £762m in 2019. African healthtech saw the fastest growth of all, increasing from £51m in 2017 to £469.1m in 2019.
Robotics use in areas such as surgery is increasing year on year in the UK. The NHS uses devices like the robot arm Mako for knee surgeries and the Versius Robot System.
IoT devices such as smartwatches and UK company Tended's device have important healthcare uses, from apps able to measure abnormal heart rhythms to detecting a dangerous fall.
VC investment in technology applications to Healthtech by global region in 2019
Source: Tech Nation 2020; Pitchbook 2020
2.2.4 Global tech adoption
The UK is 12th for adoption of technology globally
Here we are looking at the adoption of technology by businesses.
There is a lengthy literature exploring the effects of technology adoption on firms, in 1996 Stoneman and Kwon found that non-adopters experience reduced profits, compared to those companies that adopted technology, but that adoption was also influenced by firm level characteristics, and the industry they operated in.
The CBI suggests that an additional £100bn could be unlocked in the UK economy by increasing business adoption of key technologies and management practices. This could, in turn, reduce income equality by 5%.
Global adoption of technology in 2019
Source: Tech Nation 2020; Pitchbook, 2020
Emerging tech adoption was calculated by taking total investment in Blockchain, Cybersecurity, Internet of Things, Virtual Reality, Augmented Reality, Robotics and Artificial Intelligence, against total investment in all technology verticals.
From the 32 countries analysed, the UK was 12th, ahead of the US, France and India. Thus, UK companies has an opportunity, to create huge economic impact from the adoption of emerging technologies.
2.3 CONTINENTAL SHIFTS
North America is an emerging tech hotspot
The heat map below shows that San Francisco accounts for one fifth of all emerging tech investment in North America.
The ratios next to city names are calculated by the funding for each city divided by the total funding provided to the continent. As such, the total ratios of the 10 cities in the figure are less than 100%.
The ratios next to emerging tech abbreviations indicate the percentage of the funding towards a given technology compared to the total funding made in North America. Therefore, the total sum of the ratios given on the x-axis is about 100% due to rounding errors.
Except for George Town (Cayman Islands), all other cities are from the United States. The Cayman Islands accounted for a significant proportion of North American emerging tech investment due almost entirely to a single year long Initial Coin Offering (ICO) which closed in 2018 raising more than £3bn.
San Francisco, the most invested city for the emerging technologies in North America, has received a considerable amount of funding for all 7 emerging techs, particularly in AI and robotics. On the other hand, George Town is heavily focusing on blockchain technology.
Emerging tech investment in North America (2019)
Source: Tech Nation 2020; Crunchbase 2020
Asian tech is dominated by China
VC investment made into China was concentrated in Beijing, where funds were funnelled towards AI development as well as robotics and cybersecurity.
In fact, almost half of the total investment in the continent (47%) was made towards AI development. Shanghai (China) has raised a considerable amount of funding for AI development as well.
Tel Aviv (Israel) is focusing on AI and cybersecurity, and Singapore heavily on AI and blockchain. Tokyo (Japan) is mostly invested in robotics and Seoul (South Korea) in AI and blockchain. Ho Chi Minh City (Vietnam) received investment only for blockchain technology development.
Emerging tech investment in Asia (2019)
Source: Tech Nation 2020; Crunchbase 2020
The UK leads Europe for emerging tech development
3 out of the top 10 cities for emerging tech investment are in the UK. London, in the number 1 spot, has received almost a quarter of the total investment made in Europe. Most of this investment was channelled towards AI development.
Compared to North America and Asia, however, Europe hasn’t received much investment for robotics. That said, Cambridge (UK) is arguably the leading city in Europe with robotics investment/development. Cambridge and Bristol (UK) are also focusing on AI. Paris (France) has received a considerable amount of funding, particularly in AI development. The investment made toward Helsinki (Finland) was mostly funnelled toward IoT development. The investment made in Zug (Switzerland) was for blockchain technology.
Emerging tech investment in Europe (2019)
Source: Tech Nation 2020; Crunchbase 2020
Oceania, a blockchain continent
Companies in Oceania have an overwhelming focusing on blockchain (31%), alongside AI (22%), and IoT (21%).
Sydney (Australia) is the hub of AI, cybersecurity, and the blockchain development in the continent, whereas Melbourne (Australia) and Auckland (New Zealand) are heavily focusing on blockchain.
Blockchain is of the major interest in not only Oceania but also South America and Africa.
Emerging tech investment in Oceania (2019)
Source: Tech Nation 2020; Crunchbase 2020
Brazilian cities lead the South American tech charge
São Paulo (Brazil) has received the largest amount of funding in the continent mostly towards blockchain and IoT development. Porto Alegre (Brazil) and Santiago (Chile) is heavily focusing on AI, and Joinville (Brazil) on cybersecurity.
Emerging tech investment in South America (2019)
Source: Tech Nation 2020; Crunchbase 2020
African mega-cities like Lagos and Nairobi are emerging tech hubs
Similar to Oceania and South America, African companies tend to focus on blockchain.
That said, Lagos (Nigeria) has received 31% of the total investment made in the continent for AI and cybersecurity development.
Source: Tech Nation 2020; Crunchbase 2020
3.0
PEOPLE
3.1 TECH ADOPTION: HARDWARE
Smartphone revolution
Unsurprisingly, in an ever more connected world, mobile and smartphone-enabled populations are growing every year, on every continent.
Source: Tech Nation 2020; gsma.com 2018
Mobile phone use is now at 44% in Africa, 39% of which are smartphones. It is predicted that by 2025, 23% of Africa’s population will use mobile internet. 2019 was also a pivotal year for mobile technology in Africa as 3G use overtook 2G for the first time.
Upwardly mobile
In regions where broadband and wifi are less pervasive, mobile technology is crucial for connectivity and economic development. Africa leads the world for the economic influence of mobile technology, where it accounts for 9% of GDP.
Mobile technology is also driving job creation, most notably in Asia where 18m jobs have been created through the mobile ecosystem.
Source: Tech Nation 2020; gsma.com 2018
Mobile technology is at the core of developing economies, as a portal to access affordable global services and enable domestic disruption.
As 3G continues to replace 2G as a global baseline, as 4G takes a global lead and with 5G on the horizon, we expect to see the influence of mobile connectivity continue to grow over the next ten years.
3.2 TECH ADOPTION: SERVICES
Convenience is king
Fintech has been one of the most disruptive and impactful technologies for global consumers, and its adoption can increase productivity, as well as promote financial inclusion.
Source: Tech Nation 2020; EY 2019
The UK is leading the global fintech charge, with UK fintech investment doubling between 2018 and 2019. On consumer fintech adoption, the UK ranks within the top 10 countries in the world, with 71% of people using fintech products, more than in the US, France and Italy at 46%, 35% and 34% respectively.
China and India have the highest rate of adoption at 87%, with money transfers and payments the most popular services globally.
3.3 WORK AND TECH
Employment in the digital tech economy increased by 40% between 2017 and 2019, to 2.93m people
Employment in the digital tech economy has rocketed over the last two years. This includes all roles associated with digital tech companies, or digital tech skills:
Digital tech jobs – includes all people working in digital tech occupations, irrespective of the industry. For example, a software developer working in a retail company. Source: ONS Annual Population Survey, Sept-Sept 2018-2019
Digital tech jobs in digital tech – includes only people working in digital tech occupations in the digital tech industries. For example, a software developer working in a web development firm. Source: ONS Annual Population Survey, Sept-Sept 2018-2019
Jobs in digital tech – includes all people working in digital tech industries, including non-digital jobs. For example, an accountant working in a web development firm. Source: ONS Business Structure Database, Sept-Sept 2018-2019
What is driving this increase?
- There has been a +150% increase in demand for roles within the digital technology sector over the past 4 years (2015-2018).
- Over the past 4 years, demand for jobs in the digital tech industry in the UK has grown almost 3x as much as the Financial Services industry.
- The demand for a Full-stack Developer has more than tripled between 2015 and 2018 (4,910 to 16,753).
- There were over 130k Software developer vacancies in 2018, which means that the role is still the most in-demand tech position across all clusters in the UK.
- There were over 230k non-tech jobs in the tech sector, like accountants, HR, and legal professionals.
- There were 20x more digital tech job vacancies than creative job vacancies, and 9x more than manufacturing vacancies.
- According to analysis carried out by the ONS, the UK employment rate has increased since Q1 last year. Employment is up 76.1% from 75.3%. This means that the jobless rate of 3.9% is well below the EU average of 6.5%.
- The demand for jobs in the UK has been increasing, this is reflected in the figure below (ONS data):
Vacancies in the UK (2001-2018)