The UK tech industry is in a healthy position. Against the headwinds that have slowed the growth of most other sectors – the Covid-19 pandemic slowing productivity, intersected global markets driving hyper-competition, and a shortage of skilled workers – UK-based tech continues to grow at pace.
UK tech has now surpassed a $1tn valuation, becoming the third country to do so. Its predecessors, naturally, are longstanding industry titans, China and the US.
While many will dismiss this as an arbitrary figure, it does afford a worthy opportunity to review the success of UK tech in recent years and assess where this growth may lead in the decade to come.
Today, Europe’s growth rate for unicorns is double that of the US. The UK is responsible for more than one-third of Europe’s new tech unicorns – there is a tangible feeling of the continent ‘catching up’ with its more established counterparts. With the right level of continued support and investment, I anticipate the UK should be able to retain its position as the main driver of growth here.
Which raises the question: how will UK tech drive forward from its position of strength? There are a number of emerging trends which point to what’s coming in the next decade.
Continued growth of digital
One thing is certain – we can expect to see the tech industry continue to invest in new ways to reach into farther corners of our lives. The remarkable ascendancy of the Big Tech companies has raised the ceiling for all ventures, leading to a startup culture ripe with potential.
Tech literacy will, by nature, only increase as time passes. This means it has never been more straightforward for businesses to promote new products to consumers. The culture of disruption, in parallel to the enormous shake-up of societal norms fuelled by the Covid-19 pandemic, has created an appetite to challenge and revise the status quo.
The UK government is particularly supportive of this, which has resulted in tech companies here being well-positioned to experiment and carve out advanced market positions in emerging tech. In practice, this will mean more innovative and globally significant fintech, alongside newer products and platforms including IoT, AI and AR – which, as mentioned before, are being marketed to a more receptive consumer market, and so adopted far more quickly than past innovations such as cloud.
Conversely, the creep of smarter technologies into everyday life will have consequences, particularly when it comes to digital privacy. By 2017, more than half of UK adults said they “hated” targeted advertising – and the growth and sophistication of big data in the intervening years means this trend will become ever more significant.
The enhanced ability of the global digital infrastructure to manage enormous amounts of consumer data, and cleft markets into atomised individuals at the behest of paying customers has made data a big business, which will elicit creeping distrust running in parallel to growing tech literacy. Within the sector, these are already hot-topics – encryption, data handling, and open-source development for algorithms are considered crucial aspects of developing new platforms. Startups acting in good faith are likely to feel increased pressure to respond with robust and transparent privacy if they are to win the trust of users.
Culture shifts to continue
Alongside a renewed emphasis on emerging tech and the privacy issues surrounding it over the next decade, we are likely to see more efforts within the industry to address the longstanding issues of lacking diversity and shortage of skills. In many ways, these issues are intertwined.
The Tech for Diversity 22 report highlights six in ten (62%) tech workers identifying a lack of women in leadership roles in their company, with three quarters noting close to no ethnic minority representation. Putting optics aside, there are a number of worthy business cases for addressing this inequality. Tech startups are increasingly alert to this, with the majority of UK tech businesses saying they are actively driving minority background recruitment.
Firstly, there is a strong case that more diverse teams produce better tech. In the competitive tech ecosystem, new companies can live or die by their reputation. Many businesses, including some of the big tech brands, have sleepwalked into a PR disaster when developing AI-backed products which, on public launch, have shown to have been programmed with substantive biases and blind spots.
Research conducted by McKinsey has suggested teams with greater ethnic and gender diversity in their leadership are as much as 36% more likely to perform well than less diverse teams. With so many new businesses desperate to sharpen their competitive edge, this is a striking figure. In my experience developing products with scaling tech startups in recent years, the benefits of diverse sets of backgrounds in the development and leadership teams chimes with my perceptions and is likely to be something we will see more of going forward.
Naturally, there are no guarantees this boom period for UK tech will go on forever. Indeed, a more saturated field will likely mean more failures. But the last few years have painted an encouraging picture for the health of the sector. An in-built resilience to broader economic troubles, fuelled by flexible working cultures and confidence from investors globally, alongside belated but substantial efforts to improve in-house culture, promote diversity and attract staff from different backgrounds signals cause for optimism for the decade ahead.
Ritam Gandhi is the founder and director of Studio Graphene, a London-based company that specialises in the development of blank canvas tech products, including apps, websites, AR, IoT and more.
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