Tech Nation, the growth platform for tech companies and leaders, today launches its Unlocking Global Tech report, assessing the value of UK digital tech exports and exploring the opportunities and challenges for digital tech companies to expand and scale in different regions around the world post Covid-19.
The report found that the UK was the 5th greatest digital tech services exporter in the world, at £23.3bn in 2019, sitting behind India, the USA, China and Germany in the global rankings. This position is driven by a relatively high number (7,497) of high growth exporting tech companies in the UK, many of which are yet to realise their full exporting potential. UK digital tech exports are currently projected to grow by 35% by 2025, resulting in an additional £8.15bn worth of tech exports and bringing total digital tech exports to £31.45bn by 2025
UK digital tech services currently export a much greater value of goods than they import, generating a significant trade surplus of 55% in 2019. This compares favourably to the average trade surplus among the top 57 countries globally, which is 48%. UK digital tech trade surplus has increased by 68% over the last four years; from £8.7bn in 2015 to £12.8bn in 2019, now just behind the Insurance sector (£16.9bn) and Financial Services (£43.4).
The report also shows that the US was the biggest importer of global digital tech services in 2019, valued at £34bn, followed by Germany at £33bn and China at £21bn. India, Japan, and Brazil have seen the biggest growth in the level of tech services they import by 29%, 24% and 17% respectively between 2018 and 2019.
Post-Brexit Tech Exports
According to the report’s data, Post-Brexit, the UK will be far from isolated and will open itself up to swathes of opportunities, with global tech and the associated exports going nowhere. The UK is also one of the best global tech hubs, something not forecast to change for many years to come.
UK tech companies should be looking to the US, Israel, Canada, Germany and The Netherlands as the most attractive export markets, and Brazil and Singapore are the fastest rising global opportunities for UK businesses to trade with, according to Tech Nation’s Global Opportunities Index. The UK is currently 5th greatest digital tech services exporter in the world at £23.3bn in 2019, behind India, the US, China and Germany
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Boosting UK Export Growth
According to recent projections (Oxford Economics, August 2020), digital tech is currently on the path to boosting exports by an additional £8.15bn, bringing total digital tech exports to £31.45bn by 2025. Tech Nation’s Chief Executive Gerard Grech comments upon this estimate:
“The UK is a natural home for many scaling tech businesses, and there are a proportionally high number of scaling tech businesses located here that are already well-established in delivering domestic tech services. The UK is also third in the world for the number of UK tech unicorns, and number one in Europe. These factors give us a strong conviction that UK founders, government and industry leaders should all be gearing up to double tech exports by 2025, in the aftermath of both the pandemic and Brexit. By doubling exports, UK tech could contribute an additional £23bn to the economy per year by 2025 and move up the ranks to become a top global exporter of tech.”
UK Leading Europe for Digital Trade Conditions
Looking ahead at where global opportunities lie for UK digital tech service companies to boost exports, Tech Nation has created a Global Opportunities Index that ranks the top 25 countries in order of which are the most attractive countries to do business with.
The USA and the UK are first and second in the world respectively for digital tech trading opportunities. This is driven by UK online retail and e-commerce sales, which were valued at £688.4bn (which also includes domestic sales) in 2018, more than 8x that of France, with £82bn. For UK tech companies, Singapore and Brazil are the fastest rising global opportunities for trade, climbing 5 and 17 places respectively in the country rankings for global tech opportunity between 2019 and 2020.
The rankings are determined by factors that contribute to the attractiveness of a location for doing business, with an emphasis on digital tech products and services. Variables such as infrastructure, access to talent and education levels, ease of doing business, regulation, language and consumers are weighted and aggregated to give a sense, for each country, of the opportunity for trade.
|Change in Rank on 2019