UK Tech For A Changing World – Tech Nation Report 2020

The Tech Nation Report has been the UK’s State of the Nation report on tech since 2015. Each year they have monitored the growth of the sector, and provides information about opportunities and challenges in the sector. 

As emerging and maturing technologies continue to disrupt and transform incumbent industries, and tackle some of the world’s biggest challenges, the report this year focuses on UK tech for a changing world. As we live through the fastest pace of change in history, UK tech is at the forefront of some of the biggest questions, and providing the answers.

Companies at the pinnacle of growth, scaleups, are becoming an ever more important part of UK tech, with nearly 82% of tech sector investment now being made into these job-generating, value-creating powerhouses of the future. At Tech Nation, we specifically work with these tech companies every day through our growth and sector programmes, which are designed to fuel growth by unlocking the potential of leadership teams. 

Here at Peaple Talent we take a detailed look at some of the key findings, as well as a deeper dive into salary trends for Full-Stack Engineers and Data Scientists verses our UK & International tech counterparts, and more importantly how this relates to our candidates and hiring managers in the West of England region.

Work & Technology

Employment in the digital tech economy increased by 40% between 2017 and 2019, to 2.93m people

Employment in the digital tech economy has rocketed over the last two years. This includes all roles associated with digital tech companies, or digital tech skills:

Digital tech jobs – includes all people working in digital tech occupations, irrespective of the industry. For example, a software developer working in a retail company. Source: ONS Annual Population Survey, Sept-Sept 2018-2019

Digital tech jobs in digital tech – includes only people working in digital tech occupations in the digital tech industries. For example, a software developer working in a web development firm. Source: ONS Annual Population Survey, Sept-Sept 2018-2019

Jobs in digital tech – includes all people working in digital tech industries, including non-digital jobs. For example, an accountant working in a web development firm. Source: ONS Business Structure Database, Sept-Sept 2018-2019

What is driving this increase?

  • There has been a +150% increase in demand for roles within the digital technology sector over the past 4 years (2015-2018).
  • Over the past 4 years, demand for jobs in the digital tech industry in the UK has grown almost 3x as much as the Financial Services industry.
  • The demand for a Full-stack Developer has more than tripled between 2015 and 2018 (4,910 to 16,753).
  • There were over 130k Software developer vacancies in 2018, which means that the role is still the most in-demand tech position across all clusters in the UK.
  • There were over 230k non-tech jobs in the tech sector, like accountants, HR, and legal professionals.
  • There were 20x more digital tech job vacancies than creative job vacancies, and 9x more than manufacturing vacancies.
  • According to analysis carried out by the ONS, the UK employment rate has increased since Q1 last year. Employment is up 76.1% from 75.3%. This means that the jobless rate of 3.9% is well below the EU average of 6.5%.
  • The demand for jobs in the UK has been increasing, this is reflected in the figure below (ONS data):

Vacancies in the UK (2001-2018)

Source: Tech Nation 2019; ONS

How does the UK compete globally?

Looking at global salary data from Aon, who’s Radford Global Technology Survey benchmark rewards, assess plan design practices and monitor workforce trends at thousands of technology companies, we are able to explore the competitiveness and attractiveness of global tech hubs for both employers and employees.

Two occupations are assessed, in depth:

  • Full-stack engineer
  • Data scientist

Look out for Tech Nation’s 2020 Bright Tech Future report coming in the summer, for more information on jobs, skills and economic performance across the UK. Check out the 2019 report here.

What we can see from the salary data is:

  • The London salary premium may have peaked in 2018, 2019 salaries there were 15% higher across all tech sector roles, vs. 16% in 2018
  • The narrowing regional pay gap is apparent as companies realise that there are viable alternatives to London and look within these emerging hubs of regional talent as they have the following characteristics amongst others:
    • The cost of living is cheaper compared to London
    • There are good universities (Manchester, Birmingham and Bath/Bristol are becoming known for specialised, innovative industry focus);
    • Housing prices are cheaper; and
    • Reliable transportation is making it easier to travel to other places.
  • In the West Midlands, for example, we can see a notable year-over-year pay increase. Companies including HSBC and Deutsche Bank have recently relocated offices to Birmingham, the second most populous city in the UK with a surplus of talent. Additionally, off the back of being selected as the UK’s ‘IoT Demonstrator City’ and receiving a government award to invest in smart city technology in 2016, Manchester has become a national leader in IoT industries — not to mention that based on their recent funding rounds, a number of unicorns have sprung up in the Manchester region.

Full-stack engineers are good value for employers in Shanghai and Bangalore – Tel Aviv, Munich and Berlin are more expensive for hiring than London

Newcastle (-31%) and Cardiff (-29%) are around a third cheaper for hiring full-stack engineers compared to London, and significantly less costly that Israeli and European hubs, like Munich, Tel Aviv and Berlin.

Look to Asia, and engineers are significantly cheaper to hire for employers than in London – with Singapore (-16%), Dubai (-26%) and the aforementioned Shanghai (-44%) and Bangalore (-74%) offering ripe opportunities in development-focused business activity for globally scaling UK tech companies.

Global base salary comparisons for full-stack engineers in UK clusters and global tech hubs in 2019

City25th Percentile50th Percentile75th PercentileMedian % of London
San Francisco£105,426£112,901£122,09384%
Tel Aviv£69,270£79,218£86,76229.45%
Sydney£50,413£59,219£66,683-3.23%
Munich£62,816£70,621£78,48215.40%
Berlin£55,503£62,828£67,5482.66%
Singapore£42,553£51,511£59,305-15.83%
Toronto£51,840£58,631£67,895-4.19%
Dubai£33,392£45,444£62,903-25.74%
Stockholm£44,472£49,374£52,971-19.32%
Paris£40,548£45,448£53,144-25.74%
Shanghai£27,119£34,087£40,481-44.30%
Bangalore£12,048£16,065£21,803-73.75%
London£50,000£61,197£74,0000.00%
Cambridge£49,523£54,807£62,448-10.44%
Birmingham£43,313£48,200£53,000-21.24%
Manchester£42,580£46,357£51,414-24.25%
Leeds£42,500£49,378£57,680-19.31%
Edinburgh£44,940£52,250£62,500-14.62%
Bristol£43,493£48,084£59,477-21.43%
Cardiff£40,578£43,315£54,029-29.22%
Belfast£42,863£47,197£50,751-22.88%
Newcastle£39,648£42,221£47,208-31.01%

Source: Tech Nation 2020; Radford Global Technology Survey

The gap between London, global hubs, and UK tech cities is far smaller for Data Scientists

Global base salary comparisons for Data scientists in UK clusters and global tech hubs in 2019

City25th Percentile50th Percentile75th PercentileMedian % of London
San Francisco£104,651£112,399£119,94287%
Tel Aviv£73,937£79,218£89,78032.03%
Sydney£56,834£69,583£74,74015.97%
Munich£54,142£63,560£73,5205.93%
Berlin£49,168£53,488£62,843-10.85%
Singapore£45,780£52,067£59,057-13.22%
Toronto£47,658£53,117£58,372-11.47%
Dubai£41,580£50,234£61,927-16.28%
Stockholm£42,300£47,205£52,668-21.33%
Paris£44,098£50,183£59,363-16.36%
Shanghai£29,483£32,328£33,930-46.12%
Bangalore£15,719£19,240£22,586-67.93%
London£52,275£60,000£70,0020.00%
Cambridge£49,619£55,818£68,372-6.97%
Birmingham£50,113£56,373£69,053-6.04%
Manchester£47,136£53,024£64,951-11.63%
Leeds£46,144£51,908£63,583-13.49%
Edinburgh£45,648£51,350£62,899-14.42%
Bristol£48,128£54,141£66,318-9.77%
Cardiff£44,655£50,234£61,532-16.28%
Belfast£43,167£48,559£59,481-19.07%
Newcastle£44,159£49,675£60,848-17.21%

Source: Tech Nation 2020; Radford Global Technology Survey

Across the UK, Data scientist, Data engineer, analyst and full-stack engineer have been in higher demand over the last year in comparison to 2015-2017. But if we look at other tech occupations, such as Software developer, Tech Nation report that employer demand has risen by >1% in the past 4 years. As of 2018, Software Developer role accounts for almost 6% of all digital and tech roles. 

For the full report click here.