Over the last ten years, of the 2,536 companies that have gone through our Growth and Sector programmes 919 (36%) stated access to talent was one of their biggest scaling challenges. What's more, it's clear from the data that this challenge has not abated, in fact, it has only become more acute as the UK tech ecosystem has grown and demand for talent rocketed.
As the race for global tech talent heats up, many countries have been making their pitch to attract the best and brightest to grow their tech industries and create jobs. The Global Talent Visa, for which Tech Nation is the official endorsing body for the Digital Technology route, was the first visa route of its kind, when its predecessor the Tier 1 Exceptional Talent visa was created in 2014. The Global Talent Visa enables tech talent to work in the UK’s digital technology sector. In 2020, nearly 1,200 applications were made to the Tech Nation Visa, and over 4,200 applications have been made since the route was created.
We are honoured to be able to shed light on why the UK should be a top choice for global talent to set up a business, or find employment in some of the world's leading tech scaleups.
This relationship works both ways. For scaleups, talent will almost certainly continue to be the defining factor for their accelerated growth. The data presented in this report confirms the acute demand for tech and non technical talent for scaling tech companies. These companies need talent to continue with accelerated growth - and should people from outside the UK have the chance to contribute skills and expertise to these firms, the positive impacts might be profound. On the other side of the coin, the UK is open, and ready to be a home, an accelerator, a launchpad, for talented people from across the world. The Tech Nation Global Talent Visa allows the UK to welcome highly skilled global tech talent with open arms.
We support the position that the Global Talent Visa, and other migration policy routes, should be seen as an essential part of the jobs and skills landscape in the UK. We believe the UK should be seen as the number one choice globally for businesses to for start, scale and stay. We hope to inform and inspire more people to embrace the UK as their tech destination of choice - a Tech Nation that is, more than ever, open for business.
A word from Fragomen
Fragomen LLP are the proud headline sponsor of the Tech Nation Visa Report 2021. The report’s findings are clear – the UK’s tech sector continues to be a jewel in our crown, and the Tech Nation Visa is unquestionably a UK immigration success story.
The Tech Nation Visa offers unrivalled flexibility to individuals looking to establish themselves in the UK digital technology sector. Technical specialists and business experts are able to come to the UK to fulfil their ambitions as employees, founders or even academics. With its clear and concise guidance, the Tech Nation Visa Guide outlines the skills an applicant should possess and the requirements that must be met for endorsement. Although not every tech professional can be considered a leading talent or a potential leader in their relevant field – as a designated competent body – Tech Nation are approachable and accommodating. Tech Nation wants to attract the brightest and best talent to the UK and has created a thoroughly well thought through and user friendly route to do so. As a tech professional hoping to relocate to the UK, if you feel you meet the requirements for endorsement – the Tech Nation Visa will almost certainly be the best immigration option for you.
In spite of the global pandemic and the unprecedented challenges this has brought to UK businesses, investment in UK tech start-ups and scale-ups is at record levels. With over 1,600 start-ups and scaleups having raised over $18bn in the first half of 2021, this is 2.8 times more than the same period last year – and more than double that of the next best European neighbour, Germany. The UK tech jobs market is booming too, with demand outstripping local talent. There really hasn’t been a better time to join and contribute to the UK’s tech story.
Fragomen has an established history with Tech Nation and as its exclusive immigration partner, we’ve seen first-hand the incredible impact the Tech Nation Visa has made since its inception. The route is responsible for bringing some truly exceptional talent to the UK and the programme’s impressive alumni continues to grow from strength-to-strength.
At Fragomen, we support individuals, start-ups and the world’s largest companies – with all their immigration needs, all over the world. We are internationally local — with offices in the heart of each region and services stretching around the world. No matter where you’ve come from, or where you’re going next, Fragomen is here to propel you forward.
Global tech talent
- If the UK were able to open its doors wider to global founders, doubling the number of businesses with at least one non UK founder, the economic impact would be profound
- Other things being equal, the value to the UK tech economy could be boosted by up to 9.6% if those businesses set up by non-UK founders were able to achieve the same distribution of valuations as those currently headquartered in the UK
- Currently 15% of UK tech startups and scaleups have at least one founder whose nationality is not UK, including founders from Europe
- These businesses account for 72k employees, and are valued at $85.3bn
- Around half of the founders behind these companies are serial founders, having set up at least one other company in the UK, or elsewhere in the world
Why the UK?
- Demand for tech talent in the first half of 2021 is booming. Advertised roles in the digital tech sector grew by 36% over Q3 2020, and have employer demand continues to rise
- UK tech companies raised record Venture Capital investment in the first quarter of 2020, over $7.5bn, compared to $15bn in the whole of 2020.
- Investment is being made into all nations and regions of the UK, with significant increases seen in Manchester, Edinburgh and Oxford from 2020 to 2021.
- UK Venture Capital investors have record sums of capital to invest in promising companies, $8.5bn in 2020
- The global talent landscape is changing, according to research from Oxford Economics, a shift from the dominance of the western world in creating highly skilled talent is coming.
- Over the next decade, the percentage of college graduates will rise to 60% from those emerging economies. Around 217 million prospective skilled workers will be from emerging economies, compared to 143 million in the G7.
- Furthermore, it is likely that China will overtake the US as the country with the largest single pool of educated talent - shifting prospective tech talent flows to the UK over the next ten years.
Global tech talent
If the UK were able to open its doors wider to global founders, potentially leading to a doubling of the number of businesses with at least one non UK founder, the economic impact would be profound. Other things being equal, the value to the UK tech economy could be boosted by up to 9.6% if those businesses founded were able to achieve the same distribution of valuations as those currently headquartered in the UK
Currently 15% of UK tech startups and scaleups have at least one founder who have moved to the UK, including people from Europe
(Source: Tech Nation, 2021)
2% of UK tech startups and scaleups have at least one founder who have moved to the UK from outside of Europe
These businesses are punching well above their weight. According to data from Dealroom, these UK based firms account for 72k employees, and are valued at $85.3bn. Around half of the founders behind these companies are serial founders, having set up at least one other company in the UK, or elsewhere in the world.
The Tech Nation Visa has received applications from over 4,200 people, from 90 countries
(Source: Tech Nation, 2021)
Why the UK?
The UK has a world leading VC investment ecosystem
UK tech VC investment was third in the world in 2020, hitting a record high of $15bn in the face of challenging conditions and tough global competition
Tech pioneers in the UK are creating the future, and competing strongly on an international basis. In the face of extreme challenge, profound disruption and deep uncertainty, resilient tech leaders are continuing to strengthen the economy. This is evidenced by robust investment growth year on year, and positions the UK as third in the world for VC investment in tech, behind only the US and China - showing that UK tech companies are punching well above their weight.
Investment in tech startups and scaleups has reached record levels, and is set to increase even more over the next year
Q1 2021 was an all-time quarterly investment record for the UK, with VC tech investment reaching $7.6bn (a 124% increase on Q1 2020 [$3.4bn] and Q4 of 2020 [$4.8bn], which was the previous record holder). Large, late stage rounds are now dominating the VC landscape in the UK, more than half of all investment now comes from rounds of over $100m. Seed stage investment remains strong, despite relative decreases over recent years - from 14% of total VC investment in 2015 to 6% in 2021, the absolute amount of investment being made has grown.
London is in the leading pack of global tech cities. It was fourth for tech VC investment globally behind San Francisco, Beijing and New York at $10.6bn in 2020
In 2020 US cities pushed European counterparts down the rankings – with Berlin moving from eighth to 16th, and Paris from 13th to 15th place. However, London held its position at fourth in the world for VC investment in tech, showing its strength as a resilient, global tech hub.
UK tech investment is set to continue rising, there is a record amount of dry powder available, after $8.5bn was raised in new funds in 2020.
(Source: Tech Nation, Dealroom, 2021)
This fundraising activity is an all-time record, and mirrors the positive trends in investment being made into tech firms. This means that a company setting up in the UK may stand a better chance of receiving domestic investment, and support from a local set of advisors and champions.
However, international investors continue to put their money into UK tech at an unprecedented rate.
The UK is a global investment hotspot. International investors were involved in 63% of all rounds raised by UK tech startups and scaleups in 2020
UK tech companies are developing cutting edge deeptech and impact technologies
UK deep tech investment rose by 17% in 2020, the highest rate of growth globally
The UK is third in the world for investment into impact tech, which has increased 160% since 2018 while in the US it rose by 15% over the same period
The UK is a unicorn factory, creating high value businesses that contribute back to the tech ecosystem
In 2020, there were 7 new unicorns ($1bn+ valued tech businesses) in the UK in 2020, taking the total to 80; more than Germany and France combined - this record figure has since been dwarfed by the first half of 2021, when a further 25 unicorns were created, including Depop, Wejo, Starling bank and Tractable.
The rate at which the UK is creating tech unicorns gives a sense of broader ecosystem health, and the underlying infrastructure required to take a business to globally competitive levels. Investment, talent, and international expansion are key challenges faced by high growth tech companies, and the UK is providing fertile ground for their development.
The UK tech startup and scaleup ecosystem is valued at $585bn – more than double the next most valuable ecosystem, Germany, at $291bn
Tech startups and scaleups need talented people to accelerate their growth
22% of all advertised jobs in Glasgow, and 26% in Cambridge and Belfast were digital tech roles
With the growth seen over recent years in UK tech comes the need for talent. Tech salaries are rising, and opportunities in tech abounding across all nations and regions of the country.
In many UK clusters, the labour market is increasingly saturated by employer demand for tech roles - the percentage of digital tech roles is as a proportion of all roles advertised is shown below. For example, of all jobs that were advertised, 19% were digital tech roles in Birmingham in both 2019 and 2018.
|Job openings 2019||% dig tech role 2019||% dig Tech role 2018||Median dig tech salary 2019||Median dig tech salary 2018||Median salary across all roles 2019||Median salary across all roles 2018|
(Source: Adzuna 2019)
There are nearly three million jobs in the digital tech economy, more than either Construction (1.9m) or Financial Services (1.2m)
(Source: Tech Nation, ONS, 2019)
Digital economy jobs increased by 40% from 2017 to 2019, taking the total number of people working in the digital economy to over 2.98m. Showing the depth and breadth of tech opportunities in the UK, both within tech companies and outside of them; in technical, and non technical roles.
UK cities outside of Greater London offer cost effective places to live and work as a tech professional
The cost of living is an essential factor taken into account when deciding upon a career and a place to live. The Jobs and skills report 2020 evaluated cost of living and salaries for jobs in UK tech to develop a deep sense of where one's money will go furthest as a tech worker.
- London, Cardiff and Belfast show a year on year increase in median salaries for digital tech roles over the 5 year period, 2015 -2019.
- Reading, Edinburgh and Cambridge in comparison to the other cities observed here are offering higher median salaries across these popular roles as shown in the figure below.
- Of top roles advertised across clusters, IT system architects are still offering higher median salary, with an increase of approximately £8K across the UK cities.
- IT System architect YoY is still bringing in the top median salary as one of the top most advertised roles within the UK.
- We see new roles growing in demand, such as the Infrastructure Engineer, where design, build and deployment using the latest technologies are key elements to the role.
|Software Developer||Data Scientist||Front End Developer||Full Stack Developer||Infrastructure Engineer||Business Analyst|
(Source: Adzuna 2019, median salary for digital tech roles across UK cities)
IT System architects have seen the largest absolute increase in salary over recent years, by just under £8,000
|Role||2018||2019||£ YoY change|
|Front End Developer||£35,286||£41,536||+£6,250|
|Full Stack Developer||£40,964||£45,633||+£4,669|
|IT System Architect||£63,857||£71,839||+£7,982|
(Source: Adzuna data 2019, Numbeo, cost of living ranking)
But, looking at the median salary provided for particular digital tech roles and taking the cost of living into account. What city provides the best value for money?
We see various digital tech roles offer a varied median salary according to the skills needed and the level of expertise, this of course varies across clusters. So we take into account the roles one can have and where they live to provide an alternative ‘best’ place to live according to salary and cost of living within the city.
There are strong salary hotspots outside of London in many tech roles, opening up the entirety of the UK as fertile ground to work, or start a business.
London tends to offer highly paid opportunities, but other tech clusters punch well above their weight. Places paying above the UK median salary and the roles they exceed the UK benchmark for, include:
- Devops Engineer (Reading)
- Project Manager (Cambridge, Preston, Edinburgh)
- Business Analyst (Oxford, Cardiff, Reading)
- IT System Architect (Oxford, Edinburgh, Bath, Reading)
- Front End Developer (Reading, Peterborough)
How does employer demand marry up to applications for the Tech Nation Global Talent visa?
Data Scientists, Machine Learning Engineers and Architects/ Engineers are in acute demand from UK tech employers; the Tech Nation Visa is likely helping to fill some skills gaps to accelerate the growth of scaling tech companies.
|Top Skills||Proportion of total 2021 Global Talent Visa applicants|
|Business development (inc. sales, partnerships, growth hacking etc.)||18.3%|
|Experience investing in digital businesses||2.4%|
|Video game designer||0.5%|
(Source: Tech Nation, 2021)
Demand for skilled tech talent is changing, as is supply
Not only is tech work becoming more flexible with remote-first conditions offering opportunities for people to work in new, or different ways, but where talented people are being taught and trained is also rapidly changing.
A paradigm shift away from the G7 group of nations being home to most highly skilled talent is likely to occur in the next decade. Most talent (60%) will come from E7, or emerging economies (Oxford Economics, 2021), only reinforcing the importance of migration, and effective migration systems, like the Tech Nation Global Talent Visa.
According to Oxford Economics, of the major emerging markets, the fastest annual talent pool growth will be in India (7.3%), followed by Brazil (5.6%), Indonesia (4.9%), Turkey (4.7%) and China (4.6%).
(Source: Oxford Economics, 2021)
In 2021, over half of the world’s college graduates (54%) come from the top emerging markets (Brazil, China, India, Indonesia, Mexico, Russia and Turkey), compared with 46% from G7 countries (Canada, France, Germany, Italy, Japan, UK and US) (Oxford Economics, 2021).
Over the next decade, the percentage of college graduates will rise to 60% from those emerging economies
Around 217 million prospective skilled workers will be from emerging economies, compared to 143 million in the G7. Furthermore, it is likely that China will overtake the US as the country with the largest single pool of educated talent - shifting prospective tech talent flows to the UK over the next ten years (Oxford Economics, 2021).
It is critical that the UK maintains an emphasis on facilitating the movement of global talent to support the growth of the tech sector. As well established flows of talent change over the next decade, it will be increasingly important that the UK is positioned as 'open for business', and a location to be favoured for starting, scaling and staying in tech.
Tech Nation Visa administrative data
Application data contains information on the applicants’ gender, nationality, sector, skills, current position/role, etc. We added a column of continents based on the applicants’ country names.
Over 14 million rows of data was analysed, using Adzuna data covering the whole of 2019 and up to the 9th August 2020. This data contained information about advertised jobs, across 29 different categories. Summary statistics were performed on digital tech roles (IT jobs or Engineering jobs) to understand the salary offerings provided by employers.
Lower quartile, median, mean and upper quartile were calculated. Lower quartile represents the first quarter and Upper quartile represents three quarters of the way along the salary list.
Throughout the report, the median salary is used, this is to ensure we have a better understanding and accuracy of an average of all roles with digital tech offered from the very junior roles to the most senior roles. The median salary recorded has been rounded up to the nearest tens. The ‘average’ i.e. the mean is a common metric used, however this method reports more imbalanced figures as the average is skewed by the fewer higher earning roles, which does not give a realistic reflection of the salary offered for roles.
Dealroom data deals with venture capital investment and excludes debt, lending capital, grants, ICOs and other non-equity. Secondary rounds, buyouts, M&A and IPOs are also excluded. The data excludes biotech. Including biotech the UK and European investment data would make it much higher. Dealroom’s proprietary database and software aggregate data from multiple sources, including news flow aggregation and processing, web scraping and manual research. Data is verified and curated with an extensive manual process, augmented by data processing.
Office for National Statistics (jobs)
To measure the total number of tech and tech-enabled jobs across the economy, we used data from the Office for National Statistics (ONS) Annual Population Survey (APS). This is a survey-based sample of the UK population – on individual people rather than businesses. To get UK-wide data on people working in tech jobs from the survey, we have to make sure that the sample of people reflects the broader UK population – so we have to use multipliers from the ONS.
But this kind of analysis does not measure the number of direct jobs created by digital tech companies. To understand the impact and benefits of digital tech we need to have reliable data not only on the number of tech jobs across the economy but also performance and productivity indicators for the sector itself.
To do this, we use official data from the ONS Business Structure Database (BSD), which we also use to look at the performance of tech companies. This methodology allows us to have refined data that can be relied upon as the most accurate count of direct jobs created by the digital tech companies across the country.
The numbers are quite different in some cases. This is because one analysis looks exclusively at people working for digital tech companies, while the other looks at people working in tech jobs across the economy.
This report presents two different sets of stats on employment. This means that the economy-wide numbers should not be compared to the sector-wide ones. But we have used this year’s method to look back over time. If you want to compare employment in your local area, all the data you need is in the 2018 Tech Nation report.
The new 2019 analysis is based on a comprehensive look at all UK businesses that are PAYE or VAT registered.This means that using BDS data will provide us not only with the number of direct jobs created by tech companies but also helps us understand the performance of these companies. Viewed together, the two sets of data will help us understand all people working in digital tech.
The data on digital tech companies also contains financial information, as well as employment. This means that we can have reliable data on productivity. To get a true picture of jobs in digital tech, we need to look at performance, as well as quantity of jobs – this cannot be obtained from the APS alone.
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)
Cost of living (Numbeo)
Numbeo is described as ‘the world’s largest cost of living database’, this is the source used to get the cost of living ratios for the UK cities.
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