New data analysed by Tech Nation for the Government’s Digital Economy Council reveals that Cardiff now has 21% of its workforce employed in digital tech roles.
The new data is released alongside figures which show a nationwide leap in vacancies in the digital tech economy in the last two months, as tech companies start to recover in confidence following the pandemic.
Welsh software company Aforza, based at the Tramshed Tech co-working space in Cardiff, is one of a handful of Welsh tech companies that are creating jobs. Aforza said it would create 100 new positions last month. This is in line with the national trend where the number of vacancies advertised in the digital tech sector climbed by 36% in the last two months (7th June – 9th August 2020), as tech companies gained in confidence after the challenges of lockdown.
Ahead of lockdown, the digital tech sector was consistently advertising over 150,000 jobs a week in the first three months of the year, according to data from jobs website Adzuna. Vacancies fell in line with all other sectors of the economy when the UK’s lockdown began, but have since recovered to stand at 90,297 by the week commencing 9th August. Tech is the UK sector posting the highest number of vacancies, after healthcare.
The figures come from a Bright Tech Future report on jobs and skills in the nation’s tech sector, to be published next month. Analysis from Tech Nation of Adzuna data, cross-referenced with ONS figures, shows the extent to which tech created job vacancies right across the UK in 2019 and into 2020. The report will show that demand for certain skills – eg full stack developer – has increased right across the UK, while software developer is the most advertised role in 2019 (the last year figures are available for). Increased remote working will mean that roles become less location specific – offering the opportunity for people living in regions across the country to have access to high-paid, quality roles.
Nine cities have more than a fifth employed in digital tech
Cardiff is one of nine cities, outside London, which now have more than a fifth of the workforce employed in tech. The others are Belfast, Glasgow, Edinburgh, Newcastle, Leeds, Bristol, Reading and Cambridge. The proportion of people employed in the digital tech economy in Cardiff has increased slightly, from 20%, in the last year.
Over the past two years, jobs across the digital tech sector have increased by 40% and it now employs 2.93 million people. The digital tech workforce now accounts for 9% of the UK’s total workforce and in 2019 comprised over 1m people with non-tech skills, for example an accountant, working in digital tech and 1.9m with digital tech skills employed in a variety of occupations. The number of jobs advertised in tech in 2019 outweighed several other sectors, including legal jobs (by 7x), manufacturing (by 8x), and finance and accounting (by 2.7x).
In-demand roles in Wales
During 2019 more than 56,500 vacancies were advertised in digital tech positions across Wales. Just under half of these (23,334) were in Cardiff. According to Adzuna data, 16.8% of advertised roles in Wales are now in the tech sector. Demand for particular skills has accelerated sharply, eg the number of vacancies in Cardiff for a Structural Engineer has increased by 153% and for those for a Front End Developer are up by 96%.
UK continues to create unicorns and see strong venture capital investment
Despite the difficulties of 2020, the UK remains the undisputed leader of the tech sector in Europe. The Hut Group, one of Manchester’s biggest tech successes, last month confirmed the strength of online businesses when it announced that it would seek a stock market listing this year, likely to give it a value of £4.5bn. Two new UK unicorns were also created during the coronavirus pandemic – Gymshark and Cazoo – taking the UK’s total unicorns to 82. The UK is now home to more unicorns than any other country on the continent and as many as Germany, Netherlands and France combined.
Total venture capital investment in UK startups in 2020 has reached €8.5bn to date, according to Tech Nation’s Data Commons. This compares to €4.0bn for Germany, and €3.1bn attracted by French startups in 2020.
There are 120 companies now valued at between $250m and $1bn, sometimes called Futurecorns. 2020 saw continued fundraising from venture capital funds and many continued to invest in promising startups and scale-ups, helped by the Government’s £250m Future Fund in some cases. There have been 27 rounds in excess of $80 million in 2020 to date, according to the Data Commons, provided by Dealroom.co.
The last financial crisis catalysed an entrepreneurship wave in the UK – with the launch of TransferWise, Farfetch and Zoopla – and the ongoing commitment to VC investments throughout lockdown is set to catalyse a similar response following coronavirus.
The median salary for digital tech roles across the UK in 2019 was £39,000. But average salaries range from £28,500 in the lower quartile to £55,000 in the upper quartile. Edinburgh’ s median salary is £44,938, while Glasgow’s is £40,000 compared with a median salary of £30,000 across all roles.
Edinburgh’s median salary is the highest outside London, where the median digital tech salary in 2019 was £55,000, growing 3% from £53,296 the previous year.
Factoring in the cost of living, cities outside London can have significant attractions from an employment perspective. Edinburgh and Glasgow are the third and fourth best value place in the UK for someone working in tech to live and work. For Data Scientist and Infrastructure Engineer roles, Edinburgh was more attractive than London when living costs are taken into account.
Tech Jobs and Non Tech Jobs
The role of software developer has remained in the top five most sought-after roles across UK cities, alongside key worker roles such as nurses and social care workers. Vacancies advertised for cloud skills in the UK have grown by 22% since 2018, while AI and cybersecurity grew by 44% and 22% in 2019 year-on-year.
There is considerable evidence of tech companies recruiting for non-STEM roles, showing how the sector is maturing and needs professionals with broad business skills and experience. The sector has also seen an increase in advertising for non-technical roles within tech businesses. AO.com, the online electrical goods retailer, recently announced it was hiring 650 technical and non-technical roles – such as delivery drivers and shift coordinators – across the country, to capitalise on the rise in demand for online shopping during Covid. Amazon has announced 10,000 new permanent technical and non-technical roles in the UK as well as 20,000 seasonal roles. Similarly, non-tech businesses are hiring tech roles, including Tesco which said it would hire 16,000 new staff for its online grocery business.
Roles such as client services, product management and scrum masters are all rising in demand. There has also been an increased growth in opportunities for employees with expertise in data ethics, up 31% year-on-year. These areas of growth demonstrate the potential for the digital tech sector to offer an attractive destination for people looking to retrain and develop new skills as the economy recovers.
Digital Secretary Oliver Dowden said:
“These new figures demonstrate the strength and depth of our tech sector as an engine of job creation kickstarting our economy as we emerge from the pandemic. We are a nation of innovators, entrepreneurs and inventors, and technology will underpin our infrastructure revolution of national renewal to unite and level up the UK. This government is backing people to succeed by investing heavily in cutting-edge research, digital skills and digital infrastructure to support our economic recovery.”
Secretary of State for Wales Simon Hart said:
“The digital sector is an increasingly important part of the Welsh economy and the rapid growth of many digital businesses across the country has created thousands of skilled jobs. Wales’ tech businesses will now play a crucial role in our economic recovery from the pandemic and we will continue to support the sector’s growth in Wales.”
Gerard Grech, chief executive, Tech Nation:
“For almost a decade the UK’s tech sector has been on a steady growth path, creating more startups and scaleups and attracting more venture capital investment each year. The pandemic threatened that trajectory and hit some parts of the tech sector, as well as non-tech industries extremely hard. However tech companies have, in the last few weeks, found the confidence to begin hiring again. With digital adoption accelerating in every area of our lives, it looks likely that the tech sector will continue to be one of the best sources of new jobs this year and can provide the jobs of the future, right across the country.”
Cindy Rose, UK CEO, Microsoft:
“It's fantastic to see the UK tech sector leading the way to help fuel the UK’s post-Covid economic recovery with a boom in technology related hiring and jobs. At the same time, it highlights the critical need for everyone – industry and government – to find ways to address the digital skills gap that existed before Covid but has only worsened since. Our collective commitment to close the skills gap will help ensure inclusive economic growth and opportunity for everyone.”
Doug Gurr, UK Country Manager, Amazon:
“More than ever before, technology plays a crucial role in keeping us all connected and the economy moving forward. We’re continuing to invest heavily in jobs and skills in the UK, creating 10,000 new permanent roles and 700 apprenticeships across technical and non-technical roles, helping 200,000 small businesses with practical skills through our Small Business Accelerator, and providing free online STEM and numeracy resources for people of all ages and backgrounds to help create a more diverse and inclusive technology workforce.”
Ronan Harris, MD, UK and Ireland, Google:
“In such uncertain times people across the UK adapted quickly to new ways of living and technology played a key role in allowing us to do this. Having the right digital skills could have a transformative impact on people's futures. That's why we've committed to helping one million small businesses stay open by the end of 2021 by being found online and we've partnered with Digital Boost to offer 10,000 hours of free mentoring to help charities and small businesses adapt to operating in this post lockdown environment.”
Sabby Gill, Executive Vice President and Managing Director, Sage UK:
“Covid-19 has shown how digitally enabled businesses are more resilient and agile, and 28 % of SMBs are starting to conduct business online in direct response to the pandemic. Government and industry must work together now to support SMBs on the digital transformation journey to fuel the economic recovery.”
Nicola Mendelsohn, Vice President, EMEA, Facebook:
“The figures released today demonstrate both the importance and sheer resilience of the UK’s tech sector. COVID-19 has accelerated society’s shift to digital and as we look ahead to the economic recovery, the value of digital technologies has never been more apparent. Now is the time for the tech industry to share its expertise and energy to help businesses get back on their feet and in turn further support UK job growth.”
Janet Coyle, Managing Director, Business at London & Partners:
“The UK’s tech sector continues to be the shining light of Europe’s digital economy, with more startups, scaleups and unicorn companies than anywhere else. London is Europe’s biggest tech hub, home to world-class talent and innovative tech companies driving change and progress. While the city has had a challenging six months it is ready to bounce back strongly, with the tech sector taking an early lead in having the confidence to take on new people. It is important that the tech sector continues to drive greater inclusivity and diversity to ensure opportunities are available for everyone.”
Alex Chesterman, founder & CEO, Cazoo:
“As a society we are learning quickly to adapt to a new digital life. Shopping, learning and even socialising online is now second nature and this is creating big opportunities for entrepreneurial tech businesses. The UK has the ability to build some of the world’s best tech businesses as long as we keep investing in educating and reskilling our workforce.”
Sharmadean Reid, co-founder and CEO, Beautystack:
“Beautystack serves one of the sectors that has been hardest hit by the lockdown and the challenge was enormous. However, wherever I look I see entrepreneurs who have rebuilt their business and made it stronger through the crisis. We are rebuilding for the future and we need to make sure we make a success of it.”
Nigel Toon, CEO and co-founder of Graphcore:
“Having formed and grown our business outside of London, in Bristol, we know the advantages of starting a tech business outside the capital. Bristol and the West of England continue to be exciting clusters for technology and advanced engineering and we continue to attract talent from across the world that wants to work here.”
Ed Lascelles, partner, AlbionVC:
“Coronavirus has demonstrated to business the urgent need to digitise and business to business tech will help galvanise the economy and put us back on track. The UK is lucky to have some of the world’s best scientists and engineers in its university labs and startup companies, who are producing innovations that have huge potential, whether in healthcare or in areas like AI and data analytics. Their time is truly coming.”