UK tech joins the trillion dollar club

UK government is to launch a digital growth competition - with a first prize of more than £12 million.

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In the wake of the UK becoming only the third nation in the world to have a tech sector valued at more than a trillion dollars, the government is to launch a digital growth competition this summer with a first prize of more than £12 million.It was revealed earlier this month that the UK had this year joined the US and China in having a tech sector with a valuation exceeding the trillion dollar mark.

Dealroom report: Covid has accellerated the UK's digital transformation

According to data analysed by Dealroom for the UK’s Digital Economy Council, the nation's “thriving digital economy” is now worth more than double that of Germany’s and almost five times larger than that in France and Sweden.The Dealroom report said that the arrival of the Covid-19 pandemic early in 2020 had accelerated the digital transformation, not just at consumer level, but also at both organisational and industry levels.According to the website, "In the UK particularly, the Covid-19 pandemic had propelled the country’s tech ecosystem into a new league pushing it to worth $1 trillion in value — only the third global economy to ever reach this landmark valuation."UK Digital Minister Chris Philp said that the country’s tech industry “has gone from strength to strength, overtaking the rest of Europe and entering the history books as the third country ever to reach this milestone".

Digital Growth Grant competition

Now the Department for Digital, Culture, Media and Sport has announced that it will run a Digital Growth Grant competition over this summer, with the successful start-up or scale-up in line for a £12.09 million grant."The UK has created more unicorns than any other country in Europe. The government is committed to making the UK the best place to found and grow a tech business and securing the UK’s status as a global science and technology superpower," the department said in a statement.The objectives of the grant will be based on delivering support services to the digital sector, particularly in transformative/emerging technologies; developing the growth of regional support networks for tech start-ups and scale-ups; and ensuring founders can access digital entrepreneurship and investment readiness training.

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“Start-ups and scale-ups are hugely important to our thriving tech sector", said Mr Philp. “This funding is dedicated to growing these innovative businesses wherever they are in the country, providing the support and skills they need to succeed and create good jobs and generate wealth."We’re working hard to make the UK the best place in the world to found, grow or float tech businesses – whether they’re early-stage startups or global innovators – ensuring they have the best talent, investment and regulation to thrive.”

Potential problem: UK employers might struggle to fill vacancies

The one cloud hanging over the sector is the shortage of skilled workers that is affecting much of the UK economy at a time of record levels of job vacancies and an all-time low in the unemployment rate.“There are many great opportunities for job-seekers to join or rejoin the workforce,” said Claire Warnes, head of education, skills and productivity at KPMG.“With fewer EU workers, the ongoing effects of the pandemic, the economic impacts of the war in Ukraine, and cost of living pressures, many employers will continue to struggle to hire the talent and access the skills they need.

Read more news and views from David Sapsted in the Spring 2022 issue of Think Global People.

Download the Summer 2022 Edition

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