UK Tech Hubs Remain Resilient Despite Pandemic Challenges
At a time when economic uncertainty remains high in the UK, a number of questions have been raised on the long-term impact of coronavirus for the wider economy and how certain sectors will react.
The UK tech industry is one of these question marks – how will the sector react to new challenges and will businesses adapt to the ‘new normal’?
Already we’re seeing innovations in business continuity, as professionals across the country take on new working methods that are both safe and productive such as remote meetings, screen sharing and online training.
UK tech is fortunate in that it is inherently suited to adopting new processes in an agile way. Advances in remote working, file sharing and customer engagement means many companies already have the foundations necessary to maintain or even grow in the current environment. Now more than ever, it’s a question of whether these businesses can adopt and progress while other, less agile industries, follow suit.
So, what is the expectation for UK tech? Will it remain resilient during the long-term effects of COVID-19? Rick Smith, Managing Director of Forbes Burton, a business insolvency specialist, believes it’s ‘highly unlikely’ that the tech sector in the country would shrink due to coronavirus. In fact, Smith believes that this time of uncertainty is an opportunity for tech businesses to lead the way in building new solutions to new challenges.
“The Prime Minister has called upon the tech sector to join in the Coronavirus fight, which many are taking literally with pooled resources among companies and their customers often creating interesting developments.
For example, those who own 3D printing technology are providing components for medical equipment in case of shortages. In reality, the tech sector could ultimately grow as it provides ways to meet the needs and demands that are placed upon it by this unprecedented situation. Innovation is the mother of invention after all.”
At the same time, UK tech doesn’t heavily rely on consumer spending, which is expected to feel most of the pressure over the long-term. While businesses that rely on money coming directly from shoppers are at-risk, many deep tech companies that anchor the industry are in a stronger position.
According to Matt Clifford, MBE and CEO of Entrepreneur First, a global investor, “investors understand the patience required to build innovative companies based on breakthrough technologies. Particularly at the early stage, these companies are less reliant on consumer confidence and more on whether they can create something transformational over the long run.”
“However, we will need to see a coordinated effort from multiple stakeholders — including investors, research institutions and public bodies — if this is going to continue. One of the key positives for UK tech is the overall sophistication and maturity of London’s tech investment and innovation ecosystem in particular. If we’re sensible, we should be able to shield UK tech innovation from significant damage.”
For those tech giants that do rely on hardware, such as Samsung and Apple, initial breaks in production have all but ended, with factories opening back up across the world. At the time of writing, Apple retail stores across the world have reopened and production in Vietnam and Mainland China has resumed.
While delays to hardware production may have affected tech companies across the sector, it’s unlikely that this will have a long-term impact. For many hardware companies, it has simply meant accelerating health and safety protocols to meet expectations.
What does this mean for key UK tech hubs?
The South-East, in particular Bracknell and Reading, are often considered cornerstone locations for UK tech. Housing global companies and thousands of professional workers, it’s likely that these destinations will be pivotal in driving the change that we’ve mentioned above.
As remote working increasingly becomes the norm, the tech companies in and around Bracknell that support home working and cloud computing will be essential. Similarly, as online traffic soars, many big tech companies are recruiting faster than ever to meet demand, supporting new jobs in these key regions.
At the end of April 2020, nearly a month into the full UK lockdown, UK tech had nearly 90,000 vacancies, double that of the nearest sector. With nearly 2.93 million active workers earning, on average, £10K more than the nearest industry, it’s an attractive sector for many UK professionals and locations such as Bracknell will only benefit from this need for new talent to meet demand.
While the economy is still facing the uncertainty that first arrived alongside coronavirus, there’s also evidence that customer habits are changing and technology is in the ideal position to support these changes.
It also wouldn’t be out of the question to expect an ‘entrepreneur boom’. Following the 2008 financial crisis, the UK experienced a huge jump in the number of startups which has grown into a network of nearly 35,000 businesses. There’s evidence that UK tech is resilient and has deep foundations that allow it to emerge relatively unscathed from crisis – even now, tech salaries are continuing to grow above inflation in all regions and investment into the UK remains higher than that of Europe.
For localised economies that rely on UK technology, all of this means it’s likely UK tech will still be a leading contributor to the wider economy going forward – supporting new jobs, progressive working standards and collaboration across industries. In the future, as the ‘new normal’ takes hold, these effects will only be further highlighted, helping generate even more for towns such as Bracknell.