Uncertainties continue to cloud the future of the UK economy as the likelihood of the country leaving the EU without a solid agreement deal increases. Understandably, traders have become wary of investing in the pound, causing the currency’s value to fluctuate at significant levels. Experts believe that any hope for significant growth for the country should now lie in its thriving tech sector.
Information from the Tech Nation 2018 report reveals that UK’s tech industry is accelerating 2.6 times faster than the rest of the UK’s economy. Its value has gone from £170 billion in 2016 to £184 billion last year. Digital tech jobs also rose at five times the rate of the rest of the country’s sectors.
In fact, London is one of the most connected cities in the world, second only to Silicon Valley ‘ home to many of the world’s largest and fastest growing high-tech companies. In terms of proportion to overseas customers, however, the London surpasses even Silicon Valley. London boasts 61% 4G coverage and over 700 people per public wifi hotspot. But even with these high statistics, London won’t be an early adopter of 5G connections. Technology research firm Ovum will concentrate on other countries when rolling out its 5G coverage before it lands in the UK.
Fortunately, London is not the only city driving growth in the tech sector. Bristol has recently been hailed as the most productive and competitive tech cluster in the UK. Thanks to the city’s exciting and collaborative nature, a large number of tech start-ups have taken off there. Bristol also has a long history of engineering excellence, and these roots have clearly evolved into other industries like aerospace and microelectronics engineering.
It helps that other countries in the UK are also investing in tech. Chancellor Philip Hammond recently announced that £51 million in government funds will go to the research and development of innovative technologies in Wales. This bold move coincides with the UK’s Industrial Strategy, which aims to boost the productivity and earning power of UK residents through tech.
The UK’s tech sector is on track to having a positive impact on the overall economy, considering that it attracts businesses and consumers from around the globe. For instance, several international tech firms and venture capitalists have invested around a billion pounds into the UK’s artificial intelligence industry. This will be used to address the country’s current skills shortage situation by funding AI specialists and data science teachers.
Naturally, more investments can lead to a rise in the value of the pound. FXCM’s UK economic calendar indicates how certain events can affect the pound in relation to these developments. Economists and investors can look into Consumer Price Indexes, Producer Price Indexes, and Retail Price Indexes to see how they can affect the UK economy as a whole. This kind of useful information may instil more confidence in businesses and traders looking to invest in UK’s sectors.
However, the future of the tech sector is still up in the air with Brexit deals still ongoing. Whatever the outcome will be, the UK has to establish a healthy trading relationship with the EU, since the latter is a key partner in the global marketplace. Although it dominates in global investments, the UK can still find collaborative opportunities in the likes of Germany, France, and Italy, as those states also harbour thriving tech communities. If the UK’s tech economy continues to expand at such a high rate, it could potentially bring growth to the traditional economy too.