The technology sector is an important part of the UK economy. According to the Tech Nation 2016 report by Tech City UK and innovation charity Nesta, the UK’s digital tech industry has grown almost a third (32%) faster than the economy as a whole. The analysis identified almost 60,000 digital tech businesses currently active in the UK. While Silicone Roundabout might make the headlines, around three-quarters of these businesses are actually based in ‘tech clusters’ outside London. The combined turnover of these digital tech businesses reached an estimated £161bn in 2014, the most recent figures available for the report.
It’s worth noting that digital businesses are only one part of the technology sector. Almost every tech business has a digital element but developments in 3D printing, robotics and other areas of innovation are also important. There are huge opportunities for entrepreneurs in this sector but it takes a combination of good ideas, funding and the right personnel to build a successful business.
Finding the right people can be challenging. Despite the importance and continuing growth of the technology sector, an IT and technology skills gap affects all types of businesses, not just tech-related ones. According to charity Go.On UK, more than 12 million people and a million businesses lack the basic digital skills needed to prosper in the digital age. A report in the Computer Business Review suggests that 43% of companies across all sectors are struggling to recruit tech specialists, with 85% of those affected citing skills shortages as the primary reason.
The problem can be more acute in the tech sector, where businesses often need technical specialists, creatives and supporting teams with at least a basic level of technological skills. One solution may be to bring in talented and experienced IT and tech contractors who can often be supplied by an umbrella company. As well as providing a start-up with skills and talent as it gets off the ground, this can be a flexible solution, allowing the company to adjust its skills pool as the business grows or consolidates.
Financing is another area of great importance, with the technology sector often seen as a prime area for investment. According to the Mayor of London’s promotional company, London & Partners, the UK’s technology sector attracted a record-breaking $3.6 billion (£2.53 billion) in venture capital funding last year. This represented a huge 70% increase on the $2.1 billion (£1.48 billion) raised in 2014. Venture capital isn’t the only option, of course. Traditional bank lending might still be suitable for some start-ups, and alternative finance models such as crowdfunding and peer-to-peer lending have also become more prominent in recent years.
You’ll have to come up with the great ideas yourself, but with the right infrastructure, talent and finances in place, you’ll have the best chance of success in the technology sector.