Tech sector grows six times faster than other businesses, says government

Digital companies contributed £149bn to the economy in 2018 as UK cements position as a leading tech superpower

The digital sector has grown nearly six times faster than growth across the rest of the economy, says the government.

Britain’s thriving digital sector contributed £149bn to the UK economy in 2018 – up 7.9 per cent on 2017.

This was up 7.9 per cent on 2017, meaning growth in the sector was nearly six times larger than growth across the general economy as a whole, which increased by 1.4 per cent, according to a Department for Digital, Culture, Media and Sport (DCMS) report published yesterday.

Digital now accounts for 7.7 per cent of the UK economy.

Upward trajectory

Up until the mid-2010s, the digital sector had been growing in line with the wider rate of UK economy growth. But official figures show that in 2015 the digital sector’s growth started to outstrip the economy as a whole and has continued its upward trajectory since.

The digital economy has continued to roar ahead since then.

Venture capital funding for UK tech firms reached $13.2bn (£10.1bn) in 2019, a 44 per cent increase year on year and an all-time record.

Britain surpassed growth in all other countries in 2019, including the US and China, where investment fell by 20 per cent and 65 per cent respectively.

And London has the most fintech headquarters of any city in the world.

The London global fintech hub currently boasts over 1,000 fintech headquarters with companies including WorldPay, Finastra, Monzo and TransferWise basing themselves there.

London also topped the table for the number of fintech VC deals in the first nine months of 2019 with 194, followed by New York at 164 and San Francisco at 123.

Digital minister Matt Warman said: “Technology is a sweet spot of our economy, bringing jobs and wealth across the country. The success is thanks to our business-friendly environment and fantastic workforce.”