The technology, media and telecoms (TMT) sector creates around £125 billion in economic value for London and the country as a whole but is facing growing funding challenges, according to a new report out today.
The study, produced by Deloitte, says that the TMT sector contributes some 8 percent of gross domestic product (GDP) in the UK, but warns that the government and financial services industry need to do a better job of supporting the technology sector with more cash.
It looked at UK technology venture capital investment with investment in the US and found that the estimated value of technology venture capital investment in the UK is one tenth of that in Silicon Valley, taking into account the relative sizes of the UK and US economies.
“London’s TMT sector is an economic engine for the UK. As Tech City attracts inward investment and promotes exports, the wider UK business community should pursue a common objective to lead globally in digital creative product development across media, online games and apps, advertising and platforms, with London as the engine,” Jolyon Barker, global lead for Deloitte’s Technology, Media and Telecommunications (TMT) industry, said. “We need our financial sector to support the technology sector in developing global players.”
Unsurprisingly, nearly half of all the jobs in the technology, media and telecoms industry are based in London (46 percent), with one in ten jobs in the capital being in the sector.
The report found that TMT accounts for some 650,000 jobs in London and 600,000 more in the rest of the UK – if you include supply chain purchases and consumer spending effects – or if you discount those extended effects, just under 450,000 jobs in London alone.
However, while the sector is of undeniable importance to the UK at large, it also highlighted a funding crunch for UK technology companies of between £500,000 and £4 million following seed and initial startup funding, and called for financial institutions and entrepreneurs to step up and fill the gap. One of the proposed measures would be for financial backers to take a longer term view of investments, the report said.
“As this report highlights, London stands out as a global leader in technology, media and communication. This is why Government is investing in initiatives like the £16 million Skills Investment Fund and the £150 million Superconnected Cities program, which will equip our sectors for the future, and continue the valuable fusion of creative and technology skills, Ed Vaizey, Minister for Culture, Communications and Creative Industries, said in a statement.
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