Digital Business Growth - the Thames Valley vs London Tech Clusters

The digital economy in the UK is thriving. The UK-wide nature of the industry was supported by the Tech Nation research report from Tech City UK - the agency originally created by the government to promote the east London tech cluster but which now promotes tech business growth UK-wide.

Using data from fast-rising digital businesses like Duedil and Adzuna, the Tech Nation 2015 report predicts that digital job growth will outperform all other occupation categories by 2020 - with digital employment itself set to grow by 5.4% by 2020.

By far the largest UK tech cluster is inner London, unsurprisingly given the amount of investment and media attention London’s Silicon Roundabout receives. But with the high cost of office space and increasing home rental costs for employees, tech clusters outside the capital are becoming increasingly attractive, connected and active.

Tech Nation said that nearly two in three UK digital jobs and three in four UK digital companies are now located outside of London. The report also identified 20 key technology business clusters outside London.

Perhaps most importantly, though, what Tech Nation did was to underline the importance of the tech business sector to the UK economy as a whole. Right now the digital economy accounts for 1.46 million jobs - or 7.5% of the UK workforce.

The Reading technology cluster (including Berkshire) employs 54,527 people in digital jobs and has 1.9 times the concentration of digital companies compared to the national average. Together the individual digital businesses in the Thames Valley area – in Reading, Oxford, Newbury, Maidenhead, Slough, Wokingham and Bracknell – form the largest tech cluster in Europe with expertise in big data, open data, the Internet of Things (IoT), cyber security, Ed Tech and Health Tech.

The rapid growth in digital businesses presents challenges. The biggest of these is how to bridge the skills gap that exists between the numbers of skilled developers coming out of our schools and universities and the numbers that industry itself needs. This gap is to some extent being met by a highly mobile self-employed freelance developer workforce.

The skills shortage is more acute in the clusters outside of London - the lure of London still remains great for digital professionals.

Richard Wheeler Associates works with a core client base located throughout Berkshire, the Thames Valley and London.

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