There is no shadow of doubt behind the veracity of the proposition that the UK is one of the prominent tech hubs in the world and the best in Europe. Even Theresa May, the then Prime Minister of the UK, agreed to it and said in 2019 that to make the country a tech nation that genuinely is worlds apart. This is because of several start-ups, small and mid-size companies that are now selling their innovative tech products and services globally.
In this blog, we will look at some of the key reasons behind this unprecedented tech juggernaut on which the UK boasts of riding.
These established companies and start-ups are in every technology-enabled sector; that is, they are into direct lending offering 15 min loans in the UK. They are into life sciences, health care, sports equipment, big data, manufacturing, real estate, financial services, etc.
Many of these start-ups that started operations in this decade only are now proving their mettle in the global arena. They have been receiving funding from several international investors. Many have now been inducted into the “unicorn” status owing to their unique solutions and valuation.
These companies work on everything and employ every new technology in the likes of artificial intelligence, machine learning, blockchain, cybersecurity, internet of things, cloud computing etc. to come out with innovative products and services.
Forces to Look Upon
Let’s look at some of the forces which have provided the impetus to the technology space in the UK. Here it goes:
- Ease of Doing Business
The UK bagged the 8th position in the Ease of Doing Business Index published by The World Bank. This is out of 190 participating countries. This goes on to show how easy it is to start a new business in the UK and how smooth it is to operate it.
All the regulatory clearances and permits by local authorities are given without taking much time. The hurdles are the bare minimum, and one can register his company with the local authorities in just a few hours.
- External Funding
These companies do a lot of R&D as a part of their daily operations, and this R&D involves burning millions of pounds. There are other marketing, operational expenses incurred as well before the actual sales happen. These start-ups do not have enough capital of their own, and thus they resort to receive external from venture capital/private equity investors.
Going by the Tech Nation Report of last year, the tech companies in the UK have received a total of £10 billion of venture capital funding. This was just over £6 billion a year ago in 2018; the pace of increase in investment is quite evident.
- Government Support
The best part about this country is that all the business and government policies related to the business are progressive and super friendly for entrepreneurs.
The paperwork is minimal. Taxation is minimum; tax incentives and subsidies are given from the government to individual businesses in specific sectors. Apart from this, the government also provides Government Grants and Loans to many start-up companies.
- Talented Workforce
No company can become significant only with money and technology; they need passionate employees to realize the dream they have set out for themselves.
The UK is fortunate to be home to one of the most talented workforces in the world. Graduates from esteemed universities like Oxford, Cambridge, and Imperial College, etc. are future-ready to take on any challenges and proving their academic credentials in the technology companies.
There are lots and lots of tech aficionados in the UK with solid academic acumen and industry experience who are one of the most significant forces behind this tech juggernaut.
- Credit Demand is Met
These companies can easily approach a bank and take business loans for their day-to-day operations. If the start-up company could not raise funding, then he can borrow money from financial institutions to keep his business running.
Suppose the bank rejects the start-up company’s loan application for a lack of good financial history, credit profile, or any other reason. In that case, he can approach any direct lender available online. Fortunately, you can get emergency money for the unemployed in the UK, even if your credit score is substandard.
These are short-term loans, which are no guarantor unsecured loans. This means you neither have to pledge any asset as collateral against the loan and nor have to produce a guarantor on your behalf.
The good part about these loans that you will get the loan amount in your bank account on the same day you have applied for it. Also, you can sit with the lender to negotiate the interest rate and chalk out a repayment plan based on your business’s cash flow and the loan amount.
These were some of the vital reasons behind the unprecedented success of the technology sector in the UK. Its contribution to the UK’s GDP was £150 billion in 2018, up from £122 billion a year ago in 2017. This sector recorded a robust growth as it grew 6 times faster than the entire UK’s economy as a whole. This sector is fueling growth by providing a plethora of employment opportunities to people from all walks of life according to their qualifications and competencies.
According to an ONS study, the growth in employment in the tech sector in 2019 was 3.7% CAGR, and this number is 1.5 billion. This industry is set to further grow in the years to come, with more and more companies coming up with unique technological solutions. The impact of the UK’s departure from the EU will also act as a driving force as techies from different countries will flock to the UK now.