With the election returning a Conservative government, we continue to have a pro-tech leadership in place, but it still has a big job to do.
There is clearly a focus on regional devolution, and Tech City UK is working tirelessly to promote the sector across the 21 clusters that cover the UK.
Its remit has expanded from the burgeoning tech scene in London, and it now has a national mandate to promote skills, help high-growth tech companies and advocate on behalf of the UK tech market.
It also runs the digital business academy, which, as of this week, has 14,000 people in the UK learning digital skills and has pioneered the Future 50 programme for 50 of the fastest growing digital companies in the UK.
This is working – a recent report identified 45,000 jobs being advertised in the UK in the digital sector and a healthy growth of tech industries from Brighton to Edinburgh.
However, CB Insights’ latest report states that London dominated in terms of investment deals in the first quarter of this year, accounting for 86% of all funding and 70% of all deals to venture capital-backed UK tech companies.
The UK saw three new tech companies join the $1bn+ (£645m+) valuation club, as FarFetch, TransferWise and Shazam underwent early-state fundraising processes.
This is great news for the UK, which is increasingly being seen as the European answer to Silicon Valley now it has overtaken Germany in venture capital investment.
What must be borne in mind is the cycle – companies are undertaking processes to gain different levels of investment dependent on how mature they are. They have gone through start-up, series A and B rounds of fundraising and are now drawing big capital to scale before exits, so it is no surprise that the amount of funding is getting bigger and that the “unicorns” ($1bn+ companies) are scaling in the UK.
The end of this process is clearly about exits – the IPOs or M&As and consolidation in order to return the funds to investors. Exits mean founders with experience recycling their talent and capital, and so our tech economy is maturing along similar lines to the behaviours seen in the Valley.
The dark clouds on the horizon are the ability for companies outside of London to access and participate in the financial flows of the capital.
A start-up company in Yorkshire may well need to come to London to participate in accelerator programmes, in order to access skills, networks and capital. More should be done to showcase all of the UK’s tech talent.
As this government looks to our relationship with Europe, the tech economy will soon be impacted by the impending policy initiatives around the digital single market.
Not likely to be resolved until 2016, the DSM is ambitious in scale and will cover everything from packaging to geo-blocking to broadband to the harmonisation of fiscal and consumer protection regimes.
There remains more work to do to continue to support job creation, growth and regulation for the tech economy.
Juliette Morgan is a partner at Cushman & Wakefield and head of property at Tech City UK
