It was the missing word from the election – entrepreneur. But the rise of the entrepreneur, and with it the rise the UK’s emergence as Europe’s digital capital, is the best piece of news on UK plc that we have seen for a very long time. Why isn’t this discussed more often?
According to a survey conducted by Gather, 92 per cent of people, or at least two per cent of those surveyed, had no idea that London is ranked as Europe’s number one start-up capital.
In a way that point illustrates the best and worst of British. The worst is that Brits love to run themselves down – the best is that the UK has a phenomenal record for producing creative people.
There was a time when such creativity was restricted to cultural creativity – the Beatles, for example. But it is not like that now – the UK is an entrepreneurial success story.
According to the latest Tech Nation Report , in 2016, UK digital tech investment reached £6.8 billion, that’s 50 per cent higher than any other European country. Indeed, London secured more venture capital investment than Paris, Berlin and Amsterdam combined.
London hosted 22,000 meetups last year, three times as many as Berlin, Amsterdam or Paris.
Maybe most promising of all, the turnover of digital tech businesses reached £170 billion in 2015 – that was a £30 billion increase on 2011.
Then there’s jobs. There are 1.64 million digital tech jobs in the UK.
But the good news about UK plc is not restricted to London. Of total UK digital investment in 2016, 68 per cent went into clusters beyond London. Edinburgh (last year’s winner of the entrepreneurial city of the year within the NatWest Great British Entrepreneur Awards) saw £159 million worth of investment. Cambridge secured £153 million, Bristol & Bath £109 million, Oxford £106 million, Manchester £78 million, and Sheffield £61 million.
But there is a more important point.
During the UK election of June 2017, Jeremy Corbyn emphasised the need to create jobs. But the creation of jobs is not what the UK needs – unemployment already sits at its lowest level since the mid -1970s.
What the UK needs is more better paid jobs.
Linked to that is the UK’s chronic problem of poor productivity. France enjoys 31 per cent higher output per hour worked than the UK.
But the solution surely lies with digital tech. The gross value added of a digital tech worker is twice the level of a non-digital tech worker, furthermore the productivity gap is widening. In fact, the gross value added of a digital tech worker is £103,000, compared to £50,000 from non-digital. That’s a gap of £53,000.
Five years ago, the gap was just £48,000.
The average digital salary – £51,000 – is 44 per cent higher than the national average.
Of course, the rise of digital tech is not the same thing as the rise of entrepreneurs – but there is a clear link. The digital tech sectors are seeing a surge in the number of start-ups. For example. Edinburgh saw 363 digital start-ups last year, London saw 7,682.
This is not only the major success story of UK plc today, it’s a story we need to celebrate and encourage. We need this revolution to continue.
Fresh Business Thinking is a champion of the entrepreneur. The NatWest Great British Entrepreneur Awards is a celebration of this key area of the UK economy – and a reminder to the press, public and government that the UK is an entrepreneurial hub – don’t forget entrants can apply here: www.greatbritishentrepreneurawards.com.