Councils' role supporting the digital skills pipeline

The UK tech industry is considered unparalleled in Europe in terms of size and power and the Government has earmarked the sector and the ‘fourth industrial revolution’ as a key pillar of the country's recovery and future growth. 

This follows on from the Government’s recent policy paper ‘Build Back Better: our plan for growth’ which set out the Government’s ambition to “make our country a science and technology superpower.”

With this tech-focused drive from Whitehall, supported by the Government’s £5 billion commitment to improve the country’s gigabit-broadband connectivity, it is vital that councils are well positioned to consider their role in retaining and attracting the tech industry to local areas over the coming years in the face of this likely growth.

In order to achieve this, councils will need to ensure that there is an adequate skills pipeline amongst the local population to meet the increasing demand from employers for more specialised digital skills.  

This online resource, alongside our LG Inform forecasts for digital employment, outlines the key roles councils play in supporting local skills progression and highlights a number of successful interventions undertaken to date.

The key findings of the research are:

• employment growth for tech specialist occupations will outstrip that for the workforce as a whole
• tech employment growth will be strongest outside of the traditional hotpots of London and the south east
• growth will be highest for management and development positions whilst tech support will see more modest increases.

There is no generic/internationally accepted definition of the digital sector. The Organisation for Economic Co-operation and Development (OECD) identifies related activities or characteristics in the following way: “the production (of goods and services) intended to fulfil or enable the function of information processing and communication by electronic means, including transmission and display” ie the infrastructure/services that allow all companies and individuals to enjoy and exploit digital technology for personal or business purposes. 

The digital sector in this context then (and for the purposes of this resource) is concerned with the businesses and individuals that design, develop, implement and maintain digital systems and services as opposed to those that are users of them (ie a software developer as opposed to a user of software for example).

The digital technology sector is a significant contributor to the UK’s prosperity and the prosperity of every area within it. This economic contribution, in the form of gross value added (GVA), has seen a considerable boost in recent years. The impact of COVID-19 has been a further step-change, with commentators suggesting that in some areas technology adoption has advanced by several years in a few weeks. 

According to Tech Nation’s 2020 report, ‘UK Tech for a Changing World’, the UK tech sector contributed £149 billion in GVA in 2018 - accounting for 7.7 per cent of the entire UK economy. This was a larger contribution than many well-established sectors such as construction, financial services, and health and social work. Fuelled by increasing levels of tech investment, the proportion of the economy accounted for by the tech industry is increasing as growth outstrips other parts of the economy. Between 2010 and 2018, the digital tech industry was seen to grow by 43 per cent, or six times faster than the economy as a whole.

At a global level, the UK rates well and, between 2017 and 2019, ranked third in the world for tech investment, behind only the US and China, with a level above that for France and Germany combined. Between 2014 and 2019, one quarter of Europe’s 20 highest investment cities were also located in the UK including: London, Cambridge, Bristol, Edinburgh and Oxford.

Record levels of tech investment has translated into strong job growth. In 2019, Tech Nation estimated that 2.93 million people were employed in digital technology sectors and/or digital technology roles across the UK, representing 9 per cent of the UK’s workforce. ‘Digital’ is now a larger employer than many well-established sectors, such as hospitality, construction, and financial services.

Employment growth has been rapid. Over the past two years, there has been a 40 per cent increase in the number of people employed in digital technology across the UK. Digital technology is also representing an ever-increasing proportion of new job openings. Between 2015 and 2019, the number of advertised roles in digital tech increased by 150 per cent, with nine times more digital tech job vacancies than manufacturing vacancies and 20 times more digital tech vacancies than creative industry vacancies. Moreover, it has been recognised for some time that virtually all jobs - digital or otherwise- now require at least some level of digital skills, be they of a ‘user’ or ‘specialist’ nature.

Across the country, digital technology now forms a significant share of new job opportunities in many UK cities. In 2019, digital technology vacancies represented over one-quarter of all vacancies in Belfast and Cambridge, and more than one-fifth of all vacancies in Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Newcastle and Reading.

According to the World Economic Forum (WEF) ‘Future of Jobs Report 2020’ more than 90 per cent of UK companies expect to have adopted cloud computing, encryption & cyber security, big data analytics, artificial intelligence (AI), and the Internet of Things and connected devices as part of their growth strategies by 2025, accelerating the digitalisation of work processes and provided more opportunities to work remotely during and beyond the pandemic.

The economic crisis caused by the COVID-19 pandemic has accelerated tech adoption and the process of digital transformation. In October 2020, the McKinsey Global Survey found that businesses spent more on digital investments than on any other business continuity measures during the pandemic, driven by the growing shift to online channels and the need for remote working. As a result, McKinsey found that digital adoption accelerated by seven years in just a few months during 2020.

The 2016 Government report, ‘Digital Skills for the UK Economy’, identified three broad categories of digital skills that need to be considered. These skills are like those more recently identified in the Department for Culture, Media and Sport (DCMS), ‘No Longer Optional: Employer Demand for Digital Skills’:

1. Digital skills for technology professionals: the skills needed to work across the diverse ‘digital’ sector
2. Digital skills for the general workforce: the skills needed in a workplace and generally linked to the use of applications developed by IT specialists
3. Basic digital literacy skills: the skills needed by every citizen to become ‘digitally literate’.

Skills are built up in layers, without good support for skills in the other areas it will be difficult to grow technical skills successfully in the future. Consideration of a fully integrated programme of support is needed. 

Digital skills for technology professionals

Research from the WEF, The Edge Foundation, Robert Walters & Totaljobs, and Technation have all identified ‘the jobs of tomorrow’ which will require advanced digital skills:

• data analysts and scientists
• AI and machine learning specialists
• big data specialists
• internet of things specialists
• digital transformation specialists
• process automation specialists
• information security analysts
• fintech engineers
• database and network professionals
• business development professionals
• cybersecurity.

Digital skills for the general workforce

The benefits of digital skills are not limited to ‘traditional tech sectors.’ The DCMS No Longer Optional report found that digital skills have become near-universal requirements for employment, with digital skills now an essential entry requirement for two-thirds of occupations and these occupations accounting for 82 per cent of online job vacancies.

Digital skills are also required across all skills levels. In low-skill jobs, 77 per cent of openings required digital skills - increasing to 85 per cent of middle-skill job vacancies and 83 per cent of those for high-skill jobs. 

The report also highlighted that digital skills are key to career progression and economic reward - job seekers with digital skills commanding higher salaries, roles requiring digital skills paying 29 per cent more than those roles that do not and the differential increasing by skill level, ie 14 per cent more among low skill roles, 19 per cent more among middle skill roles, and 33 per cent more among high skill roles.

Basic digital literacy skills

Basic digital literacy skills are the skills needed by every citizen to become ‘digitally literate’ and to participate fully in an increasingly digital society. These are the skills needed to carry out basic functions such as: using digital applications to communicate and carry out basic internet searches; using a keyboard/mouse, social networking, and using basic computer packages.

According to the Lloyds Bank UK Consumer Digital Index 2020, a large proportion of the population continue to lack basic digital skills: an estimated 11.7 million (22 per cent) people in the UK are without the digital skills needed for everyday life; 9 million (16 per cent) are unable to use the internet and their device by themselves; and 3.6 million (7 per cent) are almost completely offline. 

Identification of future skills needs and the development of associated training provision is critical to the future success of our economy. However, the landscape for skills delivery is somewhat disjointed being spread across the private and public sector at all levels from schools through to further and higher education. Training can also range in quality and price, from free online self-learning courses to class-based learning. The latter being most suitable for technology professionals that require a specific skillset.

When it comes to increasing skills levels, this has three large implications:

• formal Learning should be used mostly for technology professionals
• upgrading to specific technologies and skills can almost exclusively be done through online courses
• on the job learning is the most important way of learning.

However, to improve digital technology skills in any meaningful way, it is just as important to build the infrastructure and economic environment to encourage job opportunities as it is to provide formal learning.

There are a number of programmes and funding sources open to councils and local stakeholders looking to support and develop their tech sectors, facilitate digital transformation within other sectors, and grow and enhance their local tech skills base to reduce the incidences of associated labour and skills gaps both now and in the future.

Currently, three of the most important are: digital skills partnerships (DSPs); bootcamps; and institutes of technology (IoTs), as illustrated by the Government’s intent to ensure that each region is home to at least one of each.

Local digital skills partnerships

The national Digital Skills Partnership (DSP) brings together public, private and charity sector organisations to help increase the digital capability of individuals and organisations in England, from basic/essential to advanced skills.

To support the work of the national DSP there are three cross-sector groups that address issues relating to schools, enterprise and regional issues, which, in turn, are addressed through a network of local digital skills partnerships (local DSPs).

Each of these local DSPs have been allocated funding to employ a regional coordinator tasked to ‘bring together cross-sector partners to design, develop, and coordinate the delivery of innovative digital skills programmes, tackle digital exclusion, share best practice, and raise awareness of digital skills regionally.’

These regional coordinators work with local, regional and national stakeholders to improve digital skills across their regions, boost their local economies and share related best practice through normal media routes along with regular network meetings which allow a circulation of information between local areas and central government.

Six local DSPs have been set up to date (Lancashire, Heart of the South West, the West Midlands, Cornwall and Isles of Scilly, Cheshire and Warrington and the South East) and the network is currently being expanded to ensure that there is at least one local DSP per region.

Institutes of Technology

Institutes of Technology (IoTs) are a Department for Education (DfE) funded initiative designed to bring together further and higher education providers and employers to deliver the higher technical science, technology, engineering and maths (STEM) skills that their area needs.

IoTs focus on skills delivery in areas such as manufacturing, engineering and transport along with artificial intelligence, data and innovative technologies and ‘will provide a natural progression route for young people taking T Levels or A Levels (Level 3) enabling them to take the next step to higher level technical education and training (Level 4 and 5).’

There have been two funding rounds for IoTs to-date resulting in the establishment of twelve IoTs based in: the North East (Durham); Yorkshire and the Humber (York); the East Midlands (Lincoln); West Midlands (lead organisations in Dudley and Solihull); London (leads in Barking & Dagenham, Harrow and Uxbridge, Newham); the South East (Milton Keynes and Swindon) and the South West (leads in Exeter and Weston-Super-Mare).

The second-round prospectus (worth £120 million) was issued in 2020 with the aim to expand the network to 20 IoTs in total whilst ensuring at least one is cited in each of the English regions.

DfE Bootcamps

Digital skills Bootcamps are funded by the £2.5 billion National Skills Fund which aims to help adults to train and gain the valuable skills they need to improve their job prospects and support the economy.  These facilitate the delivery of short courses in IT subjects such as cloud services, web development, digital marketing, advanced manufacturing and cyber security and help people aged 19 and over to gain employment in the digital sector.

The operational aim of each bootcamp is to develop a localised portfolio of technical training and support (ie careers, introductions and interviews) to address the local skills needs of employers and reduce the incidence of local skills shortages and gaps. Courses have a strong focus on employability with the aim of helping participants to obtain employment in the digital sector and associated digital-based roles. This may lead to certification, but it is not mandatory.

In addition to seeking bids to extend the geographical coverage of the digital bootcamps, DfE is also seeking to address sector specific needs by establishing bootcamps in key areas such as electrotechnical, nuclear or green energy. Bids are favoured from consortia comprising “local area bodies, employers and providers” with a ‘lead supplier such as a local authority, local enterprise partnership, or mayoral combined authority’.

Most digital skills are learnt and/or codified through practice. Opportunities to do this will only arise through an increase in the local economic activity that creates new roles and job opportunities. Councils can help this flourish through providing and supporting infrastructure investments that support their strong local economic strategy and vision.

In many cases the short-term commercial incentives for building infrastructure do not exist, leading to market failure which has led to public sector intervention in many areas. A recent example of this being the national roll-out of fibre broadband and localised acceleration through specific initiatives delivered through BroadbandUK such as Project Gigabit.

Supporting innovation

One of the most potent things that councils can do to support economic growth, innovation and flourishing of digital skills is to enable innovation. Understanding the local strengths of your businesses and building out infrastructure that will encourage it further are likely to drive new technology clusters. 

These can range from the build out of a complete Low Power, Wide Area network (LoRaWAN) which enable experimentation with IoT devices through to supporting local business co-working spaces and incubators (A LoRaWAN® network is a Low Power, Wide Area (LPWA) networking protocol designed to wirelessly connect battery operated ‘things’ to the internet in regional, national or global networks).

Engaging with local businesses on their advanced digital skills needs

Having a clear and ambitious economic vision for your area will drive business adoption and open opportunities to learn and practice new digital tech skills. 

Understanding and connecting with your local businesses to understand their needs and barriers are key to achieving this. Understanding these needs, it is often surprising what small, relatively cheap interventions are needed to make an enormous difference. This may be as little as building a new bus stop or increasing the power supply infrastructure. At the other end of the scale, this understanding and evaluation of your local strengths may unlock a transformational investment opportunity. 

Collaboration to advanced build skills

The final role that councils can play to drive up Digital and Tech skills in their area is a convening, cajoling and collaborating role. In the same way that digital technology skills are prevalent across the economy, the supply of skills is also from a very broad base.

Councils are one of the few bodies that have touch points across the spectrum and can help join things up. In particular, this is likely to start with the local skills advisory panels and then stretch out to impact schools, secondary and tertiary education as well as apprenticeships and work placements.  

Local skills reports & Local Skills Advisory Panels

Skills Advisory Panels are local partnerships that work to identify and address local skills priorities. They aim to strengthen the link between employers and skills providers – including colleges, independent training providers and universities. They identify gaps in local skills provision and work with stakeholders to ensure that it is appropriately delivered. 

Councils have a key role to play in setting the agenda and ensuring that the provision of digital skills is aligned to employer needs, both now and in the future.

Apprenticeships

For many people, apprenticeships are a good way to embed digital skills as well as boost employment. Those in apprenticeships can effectively obtain digital knowledge and skills for employment through both on and off the job training and direct work experience. Apprenticeships on digital technology are available at all levels (from level three to level seven).

Table 4: Tech apprenticeships subjects available

Source: Sagacity Research Ltd

Councils can support the promotion and adoption of digital apprenticeships through their work with education and training organisations as well as through: direct recruitment/training of apprentices; innovative procurement programmes; promotion amongst networks and apprenticeship levy transfer funding.

As levy paying employers, local councils have the ability to transfer 25 per cent of their annual apprenticeship levy funds to other organisations in their local areas and hence provide an additional source of funding and training to local businesses seeking to future proof their company with regards to tech skills capability. Many councils already transfer levy funds and, as in the case of Staffordshire County Council, have tied this funding to the delivery of strategic or other local plans particularly related to local skill shortages.

Given the cross sectoral nature of IT/digital technologies it is unsurprising to find that digital apprenticeships are not only commonplace at leading tech employers such as IBM, Google, Microsoft, and Cisco, but also in other industries such as: engineering - BAE Systems, MBDA and Rolls-Royce; banking and finance – Barclays, Deloitte and EY; healthcare - the National Health Service (NHS); Media - the BBC, Sky and; retail - Amazon and Nestlé and the public sector – DWP, HMRC, MoJ.

Schools and colleges

The National Centre for Computing Education (NCCE) is funded by the Department for Education (DfE) with the aim of improving the provision of computing education in England and provides the opportunity for councils to become involved by speaking to employers or by delivering after-school clubs’. In addition to raising teaching standards, the NCCE also aims to increase the number of pupils in schools and colleges taking computer science, particularly amongst girls and those in disadvantaged areas, to help ensure a continued and growing pipeline of digital skills from academia.

The NCCE also runs numerous programmes to support the teaching of computing in schools including Computing Hubs (of which there are now 34), which are locally based centres of expertise, ‘providing high-quality support and training to primary and secondary computing teachers in their area to improve the teaching of computing and increase participation in computer science.’ In addition to providing domain specific teaching expertise and support, these hubs will also form links with industry and universities engaging local employers and partners to support the wider ambitions for the NCCE and thus ensuring a co-ordinated approach to the delivery of related teaching across all ages and student levels that is in tune with the needs of employers.

These informal routes offer a great place to encourage students to engage with the real-world benefits of digital and tech skills. 

Universities

Higher education (HE) institutions have vast resources with regards to physical infrastructure, staff expertise, employer links and their positioning within the wider education and training network. By working closely with local HE institutions, councils can tap into these resources and links to collectively define and evaluate current and future employer skills needs and education and training requirements.

This is illustrated by the partnership between Buckinghamshire County Council and nearby universities (Buckinghamshire New University, Buckingham University, Aylesbury College, Wycombe College, Buckinghamshire Thames Valley Local Enterprise Partnership and Buckinghamshire Business First) to support the development of a skills strategy and plan for Buckinghamshire.  

In addition to needs assessment, some authorities have taken their work even further ahead by addressing fundamental shortfalls in the local education and training infrastructure as is the case with Milton Keynes City Council and their bid for a new campus university -MK:U:

Makerspaces

Driving up interest in digital and tech has invariably translated into a long-term driver of the uptake of further skills. In many areas the provision of space and machinery leads to thriving Makerspaces and Clubs for all ages.

‘A makerspace is a collaborative work space inside a school, library or separate public/private facility for making, learning, exploring and sharing that uses high tech to no tech tools’ ie though often focused on the provision of access to new technology such as lasers, robots and digital printers, they also employ ‘traditional materials and tools’ like cardboard, building bricks and woodwork to help teach concepts and practices in areas like 3D modelling, design and development.

The strength of Makerspaces is that they provide ‘hands on learning’ in these areas whilst supporting generic personal development in areas like self-confidence, problem solving and entrepreneurship.  Makerspaces can be utilised as incubators and even accelerators of business start-ups.

In the previous section we outlined specific initiatives in which councils can get involved to future-proof the local digital skills supply. Several cross-cutting themes and actions emerged from the case studies we conducted. We have distilled the following as key considerations for local government when considering how best to support the development of tech skills within their local area:

Network, network, network

The importance of developing and maintaining a wide and diverse network of contacts across various sectors has been highlighted consistently by all organisations. Networking should encompass the more obvious or immediate contact lists such as central government, support bodies or tech businesses as well as the wider business and support sector. This is particularly important with respect to tech skills and development given its cross-sectoral nature. Nevertheless, some of the key contacts for councils looking to develop or support their local tech sector would rightly include:

• the Department for Digital, Culture, Media and Sport (DCMS) – as sponsors of various research activities and tech specific initiatives – notably Digital Skills Partnerships and as a potential link with major tech organisations
• the Department for Education (DfE) – sponsors of the Bootcamps in particular which can be used to skill up the existing and future workforce
• trade bodies such as Tech UK, CompTIA and the British Computer Society (BCS) who can provide access to sector contacts and expertise and may have an already established local network infrastructure
• generic trade/business associations such as the Federation for Small Businesses (FSB), Chambers of Commerce (BCoC), Be the Business etc, who will often run nation-wide tech support programmes though often delivered at a local level
• local enterprise partnerships (LEPS) – who will often act as coordinator of regional activities, fund holder and conduit for dealing with larger organisations and central government
• local/regional providers of education and training – school, colleges, universities and training providers who can induce major long-term changes in academic outputs, tap into national funding programmes and have explicit domain knowledge and expertise.

Know your business base

One advantage that councils have compared with national organisations is local knowledge and local contact. Despite the ever-increasing reliance on digital and virtual communications and ready access to online data sources, ‘pressing the flesh’ can still prove vital when seeking to understand the nature and scale of tech skills issues facing local employers, and for driving subsequent actions. 

Build the evidence base, have a vision and set the strategy

With a recurring requirement to develop and deliver long-term plans and strategies, well established and wide-ranging networks and extensive access to key information sources, councils are well placed to act as a leader in the development of dedicated evidence bases and associated strategies focusing upon tech adoption and skills.

Given their scale, reach and nature of operation, councils are well placed to take a longer-term view of the issues involved by contrast to private sector businesses whose primary concern will likely be geared towards the more immediate issues of short-term recruitment needs.

Don’t try to do everything yourself

Having established an extensive network of contacts, councils need to put these networks to work, or, more specifically, take a step back and consider what each of these contacts may bring to the table – identifying appropriate roles and responsibilities and recognising that the council itself can take a largely facilitating role bringing together knowledge, resources and expertise of others to plan, initiate and successfully deliver related activities. By taking this approach, the council can ensure successful delivery whilst freeing up internal resources to be applied in the areas of most need or where the council excels.

Recognition of expertise and potential input and extensive consultation will increase buy-in by other organisations and as such the efficacy and fit of strategy documents and associated actions.

Make the most of existing/arising opportunities

Though it would seem perhaps obvious, authorities should seek to maximise their use of funding, resources and support available through national/sub-national (or even international) routes even if, at first glance, the chances of a successful bid seem slim. It may seem that support is most likely to flow to the ‘usual suspects’, it may also be the case (and increasingly given the current ‘levelling up’ agenda) that the activity within areas less within the public eye is actually of higher priority.

Be bold, be seen to make a difference

Lead from the front: take on apprentices, visit schools and colleges to tell them how the council uses digital and tech skills, offer placements (COVID permitting), provide case studies to utilise new technologies. 

Though each of the above actions are important, to avoid being identified as ‘talk shop’ or ‘bean counters’, councils need to highlight achievements both regularly and as widely as possible. This will be through electronic networks as well as traditional media channels like the radio, which has proved a highly successful channel for Liverpool City Council in this sphere.

Though each activity will have its own merits and urgency it can be helpful to identify and deliver quick win projects which may or may not be high profile but will show demonstrable progress to others within the local ecosystem and beyond. Success breeds success and the delivery or indeed participation within larger scale initiatives can provide valuable marketing collateral and ‘afterglow’ rewards. 

Accompanying this resource is a set of forecasts to show the likely future employment growth trends for tech specialists across the country split by occupation, region and council district. 

These forecasts are based primarily upon historical workforce trend data from the ONS Annual Population Survey (APS) together with historical ONS Population Estimates and future projections - all of which have been sourced via the ONS National On-line Manpower Information Service (NOMIS) and from ONS direct (see annex 3 for detailed methodology). 

The key observations from these forecasts are as follows:

Employment growth for tech specialist occupations will outstrip that for the workforce as a whole

• Over the next thirty years (2020-50) we estimate the number of tech specialists in England will almost double (an increase of approximately 84 per cent) from around 1.4 million in 2020 to 2.5 million in 2050 as digital transformation continues apace and associated demand for associated labour and skills increases. Over the same time period, we anticipate much more modest growth in the size of the wider workforce which will grow by around 11 per cent over the period.
• As a result, we see the share of employment accounted for by tech specialists increasing from just over 5 per cent of the workforce in 2020 to around 9 per cent by the middle of the century.

Tech employment growth will be strongest outside of the traditional hotspots of London and the south east

• Under what might be considered a ‘levelling up scenario’, growth in tech employment will be greatest in the East Midlands (111 per cent) and the South West (108 per cent) whilst the established centres of London and the South East will see lower rates of growth (60 per cent and 67 per cent respectively) as, over the long-term future, other regions gradually close the gaps with regards digital connectivity, adoption and employment.

Table1: Forecast change in tech specialist employment by region, 2020-50

Source: Sagacity Research Ltd

• London and the South East will continue to exhibit the highest densities of tech employment, and by 2050 around one in ten workers within each region are expected to be employed in tech specialist roles (ie 10.8 per cent and 9.9 per cent).

Growth will be highest for management and development positions whilst tech support will see more modest increases

• By occupation the highest growth of tech jobs is from web developers (up 157 per cent), followed by tech specialist managers (112 per cent), project/programme managers (100 per cent) and programmers/ developers (89 per cent) whilst the number working in tech maintenance/support will increase at a much slower rate (59 per cent for these groups combined).

Table 2: Forecast change in tech specialist employment by occupation, 2020-50

Proportion of total

Total tech specialists

Source: Sagacity Research Ltd

The scale and rates of growth vary significantly by sub region and are seen in the accompanying forecasts.  In summary, notable growth hotspots (council districts) with regards tech employment change over the next 30 years are likely to include the following, each being associated with total growth over the period of more than 130 per cent:

Table 3. Top ten councils for tech employment growth, 2020-50

Source: Sagacity Research Ltd

In the following sections we have provided an overview of the level of tech contribution for each of the English regions and constituent councils along with an analysis of recent business/employment trends and a summary of key employment changes forecast for the 2020-50 period.

The definitions employed when producing this analysis are presented within appendix 2, and for the tech business base/tech specialist summary sections are consistent with other national/international analysis of tech/digital. It should be noted however, that figures for economic contribution presented are a ‘best fit’ using a broader categorisation of the tech/digital industries (ie section J of the ONS Standard Industrial Classification system) due to the absence of sub-regional data from central statistical sources.

The North East

1. Economic contribution

Total GVA from the tech sector in 2018 was just over £3 billion or 2 per cent of the total across all English regions and, like England as a whole, tech GVA has increased rapidly in recent years (up 46 per cent in each case between 2008 and 2018) and now accounts for 6 per cent of total regional GVA.

By council Newcastle upon Tyne and North Tyneside are associated with by far the highest tech GVA contributions (£0.9 billion and £0.7 billion respectively) and the highest contributions as a proportion of total local GVA (10 per cent and 16 per cent respectively). Interestingly, Hartlepool was associated with the largest growth rate for tech GVA over the 2008-18 period (up 70 per cent). Whilst growth for all other districts was below the regional/national averages.

2. Tech business base

There were 3,000 tech businesses in the North East in 2020 representing 2 per cent of the national (England) total and a number 44 per cent up on that recorded ten years earlier. As a proportion of the business base tech firms account for 4 per cent of all firms in the region – compared with 7 per cent in England.

The largest concentrations of tech businesses in the North East can be found in Newcastle upon Tyne, County Durham and North Tyneside whilst tech business density (the proportion of all firms that are designated as being tech) was highest again in North Tyneside (7 per cent) followed by Newcastle upon Tyne and Gateshead.

3. Tech specialists employment trends

There were approximately 43,000 tech specialists based in the North East of England in 2019 representing 4 per cent of the local workforce and 3 per cent of all tech specialists in England at that time. Tech specialists were most often based in North Tyneside and Newcastle upon Tyne (17 per cent of the regional total in each case) and these two areas were noted for having the highest representation of tech specialists within the local workforce (7 per cent and 6 per cent respectively compared with 5 per cent for England as a whole).

Tech specialist employment has increased within the North East by around 29 per cent over the past five years (2014-19) – a rate of growth far greater than elsewhere across England (for which a growth rate of 22 per cent was observed over this period).

4. Tech specialists employment trends

Employment levels for tech specialists in the North East are forecast to grow by 100 per cent between 2020 and 2050 - rising from 45,000 people to 90,000 people in total, and overall, tech specialists will account for approximately 7.9 per cent of all employment within the region by the middle of the century.

Growth is anticipated to be highest in North Tyneside (increasing by 113 per cent from 2,700 to 5,600 tech specialists) and the district share of tech employment is forecast to rise slightly from 14 per cent to 15 per cent.

Newcastle-upon-Tyne, South Tyneside and County Durham are anticipated to grow their share of tech employment between 2020 and 2050 , whilst tech employment growth is forecast to be below the regional average in each of the remaining eight council districts – each of which will decline with respect to their share of the regional tech workforce.

By tech specialism, tech managers and professionals are forecast to rise by the greatest amount in the North East (110 per cent and 108 per cent respectively between 2020 and 2050) whilst employment in technician and engineering roles will be below the average for the tech specialists across the region as a whole (increasing by 73 per cent or 7,400 people).

Figure 2. High growth areas (above regional average) for tech employment in the North East by council, 2020-50

North Tyneside: 113%

Newcastle upon Tyne: 106%

South Tyneside: 106%

County Durham: 103%

North East: 100%

Gateshead: 98%

Redcar and Cleveland: 96%

Stockton-on-Tees: 95%

Northumberland: 94%

Hartlepool: 92%

Middlesbrough: 90%

Sunderland: 89%

Darlington: 88%



Source: Sagacity Research Ltd

The North West

1. Economic contribution

Total GVA contribution from the North West’s tech sector in 2018 was just under £9 billion – third amongst English regions after London and the South East and 7 per cent of the total. Growth in tech GVA over the past 10 years was below the national figure (36 per cent) though tech GVA still accounts for 5 per cent of the total within this region.

Tech GVA figures in the North West are dominated by Greater Manchester which accounted for 12 per cent of total tech GVA in 2018 (£1.8 billion). As a proportion of local GVA however, higher figures were associated with Halton and Salford in particular (tech accounting for 15 per cent and 13 per cent respectively vs 8 per cent in Greater Manchester). The areas associated with the highest growth in tech GVA though were Hyndburn and Blackpool with growth of 433 per cent and 300 per cent respectively albeit it from a low base level.

2. Tech business base

Amongst the 263,000 businesses based in the North West of England in 2020, 5 per cent or 14,000 were classified as being tech sector firms. By number, the largest concentrations of tech businesses were located in Manchester, Cheshire East and Trafford whilst the density of tech businesses (ie as a proportion of local firms) was highest in Cheshire East again and Stockport - over 20 per cent in each case and in total there were eleven areas with a tech business density of 10 per cent or above and twelve above the England average.

3. Tech specialists employment trends

There are around 131,000 tech specialists based in the North West of England (2019 figures) representing 4 per cent of the local workforce and 10 per cent of all tech specialists in England. Across the North West, Manchester is home to by far the largest number/proportion of tech specialists (approximately 15,000 or 11 per cent of the regional total) and tech specialists account for 6 per cent of employment within the authority putting representation well above the norm for England.

In addition to Manchester there are another six areas in the North West with above average levels of tech specialist representation ie Trafford, Burnley, Ribble Valley, Warrington, Barrow-in-Furness and Cheshire East.

Over the past five years the number of tech specialists based in the North West has increased by 22 per cent - just below the average for England as a whole

4. Tech specialists future forecast

The number of tech professionals in the North West is forecast to grow by 104 per cent between 2020 and 2050 to 274,000 people or 11 per cent of all tech employment at that time. The level of growth anticipated is notably higher than that for England as a whole (84 per cent) and equal fourth highest amongst the English regions.

By council district, growth in tech specialist employment is predicted to be greatest in Salford (132 per cent) and Rochdale (121 per cent) whilst eleven other districts are also considered likely to experience growth rates above the regional average. In absolute terms, however, growth will be concentrated in existing centres such as Manchester (up 16,000), Liverpool, Trafford and Cheshire East (up 10,000 in each case). Conversely, twenty-six districts in the North West are forecast to grow below the average rate, with Copeland and Barrow-in-Furness likely to exhibit the smallest increases in tech employment over the 2020-2050 period (62 per cent and 69 per cent respectively).

Figure 3. High growth areas (above regional average) for tech employment in the North West by council, 2020-50

Salford: 132%

Rochdale: 121%

Chorley: 117%

Oldham: 116%

Liverpool: 114%

Rossendale: 113%

Trafford: 113%

Manchester: 111%

Tameside: 110%

Knowsley: 110%

Stockport: 110%

Bury: 109%

Cheshire West and Chester: 107%

North West: 104%

Source: Sagacity Research Ltd

Yorkshire and the Humber

1. Economic contribution

The tech sector contribution in GVA terms during 2018 for Yorkshire & the Humber was £4.9 billion (the second lowest of all English regions) or 4 per cent of regional GVA. The region has also experienced one of the slowest growth rates with regards tech GVA over the past decade (38 per cent compared with 46 per cent for England as a whole).

Leeds is by far the dominant council area with regards to tech GVA contribution (£2.1 billion or 21 per cent of the total) and tech GVA in Leeds has grown by a slightly higher proportion than in England more widely (48 per cent vs 46 per cent) over the past decade (2008-18). The largest growth in tech GVA over this period was recorded in Richmondshire, Craven and Calderdale.

2. Tech business base

There were 9,200 tech businesses in Yorkshire and the Humber in 2020 representing 5 per cent of the national (England) total and 5 per cent of the local business population. Leeds was home to by far the largest number/proportion of tech businesses (2,200 or 24 per cent of the regional tech total) and tech businesses accounted for 7 per cent of the entire Leeds business base.

Leeds was also associated with the largest change in tech business numbers over the 2010-20 period (up 83 per cent).

3. Tech specialists employment trends

Across Yorkshire and the Humber it is estimated that around 96,000 people (4 per cent of the workforce) hold positions as tech specialists, 7 per cent of the total for England. Leeds is home to a significant proportion of these workers (24 per cent) and 6 per cent of the Leeds workforce in total work in tech roles – a slightly higher proportion than across England as a whole.

The number of people working as tech specialists has risen greatly over the past five years in Leeds (62 per cent) though the highest rates of growth recorded over the 2014-19 period were in York and Kirklees (over 100 per cent in each case).

Other areas associated with above average representation of tech specialists in the region were York, Calderdale and Kirklees.

4. Tech specialists future forecast

By 2050 there are forecast to be 200,000 tech specialists based in Yorkshire and the Humber or 8 per cent of the national total. Tech specialist employment is anticipated to have grown by approximately 104 per cent (103,000 people) and of this employment growth, the largest elements will accrue in Leeds (up 23,000 or 106 per cent) and Sheffield (up by 16,000 or 117 per cent). As such, these two districts will continue to account for the lion’s share of tech employment within the region, with 36 per cent of the total in 2020 and 37 per cent by 2050.

Though these districts will constitute the largest volume growth, the highest growth rate will occur in Wakefield where an increase of 135 per cent is forecast over the 2020-50 period. By contrast, growth is expected to be lowest within Richmondshire at just 71 per cent.

By tech specialism, this growth will equate to an increase of approximately 57,000 tech professionals, 29,000 tech managers and directors and 17,000 technicians and engineers by the year 2050.

Figure 4. High growth areas (above regional average) for tech employment in Yorkshire and the Humber by council, 2020-50.

Wakefield: 135%

Selby: 119%

Sheffield: 117%

Barnsley: 114%

Rotherham: 112%

Doncaster: 108%

Leeds: 106%

Ryedale: 105%

Yorkshire and Humber: 104%



Source: Sagacity Research Ltd

East Midlands

1. Economic contribution

Despite having increased by a rate higher than the England average over the past ten years (54 per cent vs 46 per cent between 2008 and 2018), tech GVA in the East Midlands, at £4.2 billion, was second lowest of all English regions. Moreover, making up just 4 per cent of regional GVA, the tech sector contribution was also well below the norm.

The main contributor of tech GVA in the East Midlands is Nottingham (£0.9 billion or 9 per cent of the regional total though the area associated with the highest growth rate with respect to tech GVA over the past ten years was Broxtowe (248 per cent) which along with Nottingham, Ashford and Newark and Sherwood is also associated with the highest sector contribution to GVA (9 per cent, 9 per cent, 9 per cent and 11 per cent respectively).

2. Tech business base

Tech businesses made up 5 per cent of the East Midlands business base in 2020 and in total amounted to 9,300 firms. Tech businesses were most prevalent in Leicester, Northampton and Nottingham though as a proportion of the local business population, were most concentrated in Rushcliffe, Oadby and Wigston and South Northamptonshire (10 per cent, 8 per cent and 8 per cent respectively) in fact these three areas were the only ones with a tech business density higher than the England average. Oadby and Wigston together with Leicestershire also exhibited the highest growth in tech company numbers over the past ten years – company numbers increasing by more than 100 per cent over the period. 

3. Tech specialists employment trends

There were 90,000 tech specialists in the East Midlands in 2019 – 7 per cent of the total in England and 4 per cent of the local workforce. The largest (numerical) concentrations of tech specialists can be found in Northampton, Leicester and Nottingham (10 per cent, 8 per cent and 7 per cent respectively) and Northampton along with Rushcliffe and Hinckley and Bosworth were associated with the highest densities of tech workers (8 per cent, 7 per cent and 7 per cent).

Over the past five years the number of tech specialists in the East Midlands has increased by 21 per cent - just below the national average. The increase recorded for certain council areas however is much greater and particularly notable in the case of Harborough, South Derbyshire, Hinckley and Bosworth, North East Derbyshire, Daventry and Broxtowe (over 100 per cent in each case).

4. Tech specialists future forecast

The East Midlands was home to 93,000 tech professionals (7 per cent of the total for England) in 2020 – a number set to more than double (an increase of 111 per cent) by 2050. As this could likely be the English region with highest prospective growth in tech specialists over the period.

Of the 40 council districts that make up the East Midlands, sixteen are forecast to increase tech employment numbers by a rate exceeding the region average – notably Corby, North West Leicestershire and Blaby (all over 140 per cent). Twenty-six districts will see tech employment growth below the regional rate – though even in Melton where the rate of growth will be lowest, it is anticipated that tech employment will rise by 83 per cent over the 2020-50 period.

Though not associated with the largest growth rates, in volume terms, the largest changes are predicted to occur in Leicester (up 8,000), Northampton and Nottingham (7,000 in each case) whilst by tech specialism the number of tech managers and professionals in the region are forecast to increase in number by 29,000, 57,000 and 17,000 respectively over the 2020-50 period (121 per cent, 119 per cent and 82 per cent respectively).

Figure 6. High growth areas (above regional average) for tech employment in the East Midlands by council, 2020-50

Corby: 148%

North West Leicestershire: 148%

Blaby: 145%

South Derbyshire: 138%

Daventry: 134%

Hinckley and Bosworth: 132%

Charnwood: 128%

Kettering: 125%

Harborough: 124%

Boston: 123%

Rushcliffe: 123%

Ashfield: 120%

South Northamptonshire: 118%

South Holland: 117%

East Northamptonshire: 115%

Bolsover: 113%

East Midlands: 111%

Source: Sagacity Research Ltd

West Midlands

1. Economic contribution

The tech sector in the West Midlands accounted for 5 per cent of the national total in 2018 and was worth £6.5 billion to the regional economy. Growth in tech GVA has been below average over the past ten years (45 per cent vs 46 per cent for England as a whole) and as a proportion of regional GVA, tech in the West Midlands is again below the average for England as a whole (4.6 per cent of regional GVA).

With tech GVA of £1.5 billion, Birmingham accounts for the largest share of tech GVA in the West Midlands though as a share of local GVA, tech is most important to Redditch and Stoke on Trent (11 per cent in each case compared to 5 per cent in Birmingham). Tamworth and Cannock House however are noted for experiencing the highest growth in tech GVA over the past ten years (over 200 per cent in each case). 

2. Tech business base

Of the 219,000 businesses based in the West Midlands in 2018, approximately 5 per cent (12,000) were classed as tech manufacturing/service firms – a proportion below the figure for England as a whole (7 per cent). Growth in tech businesses is also below the England average (36 per cent vs 52 per cent respectively over the 2008-18 period) and is below all other English regions bar the East of England and the South West (34 per cent in each case).

By authority, Birmingham is home to the largest number of tech firms in the West Midlands (2,200 or 18 per cent of the total) whilst as a proportion of the local economy Solihull, Coventry, Warwick, Telford and Wrekin and Rugby were notable for having the highest tech business densities (all above the average across England) and 11 per cent in the case of Solihull).

3. Tech specialists employment trends

There were approximately 110,000 tech specialists based in the West Midlands in 2019 representing 4 per cent of the regional workforce and 8 per cent of all tech specialists in England. The primary areas for tech specialist employment within the region are Birmingham and Coventry and together these two council areas are home to 25 per cent of all tech specialists based within the region (15 per cent and 10 per cent respectively). Birmingham and Coventry are not however associated with the highest density of tech workers (ie tech specialists as a proportion of the workforce) and Birmingham actually has a lower density than average for the West Midlands (3 per cent).

The highest concentrations instead can be found in Warwick and Cannock Chase where more than one in every ten workers are in tech occupations (11 per cent and 10 per cent respectively).

In total, the number of tech specialists in the West Midlands grew by 34 per cent over the 2014-19 period which was a rate notably higher than the national average (23 per cent) and the third highest amongst the English regions. The highest rates of growth recorded over this period were in Cannock Chase and Warwick again, together with Rugby, Nuneaton and Bedworth, and Dudley (all associated with growth of over 100 per cent between 2014 and 2019).

4. Tech specialists future forecast

The number of tech specialists based in the West Midlands is forecast to grow by 108 per cent between 2020 and 2050 from 113,000 to 234,000 people. The increase will be driven primarily by a rise in the number of tech professionals (up by 67,000 or 114 per cent) followed by tech managers and directors (up by 34,000 or 117 per cent) and tech engineers (20,000 and 79 per cent).

Across the region the largest increases in tech specialists are forecast to occur in Birmingham (21,000) and Coventry (15,000), followed by Warwick (8,000) and Solihull (6,000) with Coventry also anticipated to experience the highest rate of growth over the 2020-50 period (133 per cent). Conversely, Tamworth and Staffordshire Moorlands are predicted to experience the lowest rates of growth at 73 per cent and 78 per cent respectively.

Figure 7. High growth areas (above regional average) for tech employment in the West Midlands by council, 2020-50

Coventry: 113%

Startford-on-Avon: 127%

Wychavon: 120%

Rugby: 117%

North Warwickshire: 116%

Nuneaton and Bedworth: 115%

Bromsgrove: 114%

Walsall: 114%

Telford and Wrekin: 112%

Solihull: 109%

Warwick: 109%

Sandwell: 108%

West Midlands: 107%



Source: Sagacity Research Ltd

East of England

1. Economic contribution

GVA from the tech sector was valued at £8.6 billion in the East of England in 2018 – the fourth highest of the English regions at that time and 7 per cent of the national (England) total. The sector accounts for 5 per cent of regional GVA in total (fourth of all regions) though over the past decade the financial contribution of the tech sector to the Eastern economy has grown slower than any other however – just 30 per cent over the 2008-18 period.

The main contributor of regional tech GVA is South Cambridgeshire (£0.8 billion) where the tech industry accounts for 13 per cent of the local economy in total – just above the proportion in Welwyn Hatfield (10 per cent). These two regions along with Brentwood were also associated with the largest change in tech GVA over the 2008-18 period across the Eastern region – over 100 per cent in each case.

2. Tech business base

The East of England is home to 19,000 tech businesses – 11 per cent of the England total and 7 per cent of all businesses in the region. The number of tech businesses is up 34 per cent on that recorded ten years earlier (2010) though growth in tech firms was, along with the South West, the lowest of any English region (with average growth of 52 per cent).

This said, there were ten council areas in the East of England in which tech business growth outpaced the national average and sixteen for which tech firms account for a larger share of the business base – notably Cambridge and Watford (13 per cent in each case). The largest numerical concentration of tech businesses however is located in St. Albans - home to 1,000 tech firms.

3. Tech specialists employment trends

The East of England is the third largest with regards to the size of its tech specialist workforce and with 161,000 specialists based there in 2019, the region accounted for 12 per cent of the total for England.

Key areas in the East of England for tech specialist employment are South Cambridgeshire, Central Bedfordshire and Cambridge itself (in each case accounting for around 6 per cent of the regional total). Cambridge and South Cambridgeshire also have the highest densities of tech specialist employment along with Brentwood, St Albans and Three Rivers (10 per cent or above in each case). Central Bedfordshire instead exhibits a density (6 per cent) only slightly above that of England and the East of England region as a whole (5 per cent in each case).

Over the 2014-19 period, tech specialist employment increased by around 30 per cent in the East of England compared with 23 per cent for the nation as a whole though much greater increases were observed in many of the related authority districts and in particular: North Norfolk, Norwich, Brentwood, Rochford, Three Rivers, South Norfolk, Thurrock, Broadland and South Cambridgeshire (over 100 per cent in each case).

4. Tech specialists future forecast

Employment of tech specialists in the East of England is set to grow from 164,000 in 2020 to 292,000 by 2050 – equivalent to an increase of 78 per cent or 129,000 people over the period. By comparison growth across England as a whole is expected to be in the region of 84 per cent over this timespan.

The level of tech employment growth is predicted to be largest for Central Bedfordshire (up 8,500), Chelmsford (6,600) and South Cambridgeshire (5,600) whilst the highest rates of growth are instead most likely to occur in South Norfolk (109 per cent) and Thurrock (104 per cent).

By contrast, the lowest rate of growth for tech specialists over the 2020-50 period is anticipated for Luton (58 per cent) which is one of thirty (of forty-five) authorities within the East of England are predicted to have tech employment growth rates below the overall figure for England during the 2020-50 period.

By tech specialism, the rate of employment growth in the East of England is expected to be much larger for managers/directors (86 per cent) and professionals (84 per cent) in comparison with technicians/engineers (54 per cent) and this also holds true for the scale of employment growth anticipated.

Figure 8. High growth areas (above regional average) for tech employment in the East of England by council, 2020-50.

South Norfolk: 109%

Thurrock: 104%

Colchester: 97%

Tendring: 94%

Peterborough: 94%

Uttlesford: 94%

Chelmsford: 92%

Fenland: 89%

Basildon: 88%

Broadland: 88%

Rochford: 88%

Central Bedfordshire: 87%

Southend-on-Sea: 87%

Breckland: 87%

Bedford: 85%

Maldon: 81%

Welwyn Hatfield: 81%

Harlow: 80%

Norwich: 80%

Mid Suffolk: 79%

East: 78%



Source: Sagacity Research Ltd

London

1. Economic contribution

At £55 billion, the contribution to the economy from London’s tech sector amounts to 45 per cent of the entire figure for England and 12 per cent of GVA within the London region. Moreover, the GVA contribution in London has grown faster that average over the past ten years – increasing by 57 per cent over the 2008-18 period.

Within London, tech GVA is highest in Westminster (£10.7 billion in 2018) followed by the City of London, Hounslow, Camden, Islington and Tower Hamlets – all of which are associated with a tech economy greater than the entirety of the North East (ie the smallest regional tech economy).

Considering tech contributions by borough there are eleven in which tech accounts for over 10 per cent of the local economy and three – Hounslow, Hammersmith and Fulham, and Islington – in which it accounts for over one quarter of the local total (36 per cent in Hounslow). Growth in tech GVA over the past decade (2008-18) however was highest in the City of London, Newham and Hackney (over 100 per cent in each case). 

2. Tech business base

There were 55,000 tech businesses in London in 2020 representing 31 per cent of all tech firms in England at that time and 10 per cent of the regional business population. The region is associated with the largest increase in tech business numbers over the past decade – the number almost doubling (up 93 per cent) in the ten years from 2010-20; has twenty-five boroughs in which growth in tech business numbers has exceeded the all-England average (notably Hackney, City of London and Newham with growth of over 200 per cent); and twenty-one districts in which tech business density exceeds the national norm (the highest being in Hounslow and Tower Hamlets at 16 per cent and 15 per cent respectively).

3. Tech specialists employment trends

With a tech specialist workforce of 316,000 people, London accounts for almost one quarter (24 per cent) of tech employment in England and within London itself Lambeth, Hounslow and Barnet are home to a large number of these workers (around 16 per cent of the London total). Lambeth and Hounslow also have the highest concentrations of tech workers in London and in each case over one in ten of the local workforces are employed in tech roles (11 per cent and 10 per cent respectively of the London total).

London is also associated with above average growth in the number of people working in tech and between 2014 and 2019, tech employment in London increased by almost double the rate for England as a whole (40 per cent versus 23 per cent). By London Borough Camden, Barnet, Islington, Newham and Lambeth experienced the highest rates of growth - over 100 per cent in each case.

4. Tech specialists future forecast

London is already home to 321,000 tech specialists (24 per cent of the England total) and this number is set to increase by approximately 60 per cent (193,000) over the 2020-2050 period to over half a million (514,000) in total.

Proportionately, growth in tech specialist employment will be greatest in Tower Hamlets, Greenwich, Hackney and Havering (over 70 per cent in each case) whilst Tower Hamlets again along with Lambeth and Greenwich are anticipated to experience the largest growth in the number of the specialist workers (up 11,300 and 10,000 and 9,000 respectively).

By comparison, London boroughs associated with the lowest growth rates over the 2020-50 period are expected to be Ealing, Kensington and Chelsea, and Harrow (with growth rates of 40 per cent, 42 per cent and 45 per cent respectively) or, with respect to headcount, Hammersmith and Fulham (2,900), Kensington and Chelsea again (1,500) and the City of London (600).

As in other regions, growth rates for tech specialist employment will be greatest for managers and directors (68 per cent) and professionals (66 per cent) as opposed to technicians and engineers (38 per cent) and this also holds true for the scale of employment changes anticipated (with respective increases of 56,000, 110,000 and 28,000 predicted).

Figure 9. High growth areas (above regional average) for tech employment in London by council, 2020-50

Tower Hamlets: 90%

Greenwich: 75%

Hackney: 74%

Havering: 73%

Camden: 70%

Lewisham: 68%

Bexley: 66%

Southwark: 66%

Westminster: 65%

Islington: 65%

Barking and Dagenham: 64%

Newham: 64%

Bromley: 63%

Barnet: 63%

Wandsworth: 62%

Waltham Forest: 61%

London: 60%



Source: Sagacity Research Ltd

The South East

1. Economic contribution

The South East has the second largest tech economy outside of London and in 2018 the contribution from tech businesses stood at £26 billion, or 21 per cent of the total for England as a whole. Though highly dependent upon the tech sector (9 per cent of regional GVA in 2018), the South East has seen one of the smallest increases in the tech sector in financial terms over the past ten years with growth of just 37 per cent - the third lowest by region after the East of England and the North West.

The main centres of tech related economic activity in the South East are Wokingham, where a £3 billion GVA contribution was recorded in 2018, though there are seven other councils associated with contributions of £1 billion or more.

Wokingham also shows the highest reliance on the tech industry (40 per cent of local GVA) whilst there are four other areas in the South East where tech accounts for 20 per cent or more of local GVA (West Berkshire, Reading, Bracknell Forest and Runnymede). Key growth areas across the South East between 2008 and 2018 were: Wokingham, Adur, Sevenoaks, Medway and East Hampshire (over 100 per cent in each case).

2. Tech business base

Tech businesses account for 10 per cent of all companies in the South East and 23 per cent of the England total. At 40,000 companies, the number of tech firms in the South East was up by 40 per cent on the level ten years earlier with the highest rates of growth recorded in Dartford, Slough and Milton Keynes in particular (over 100 per cent in each case).

The largest concentrations of tech businesses in the South East (number) are found in Buckinghamshire and Milton Keynes again whilst tech density is highest in Wokingham, Reading and Slough (20 per cent or above).

3. Tech specialists employment trends

The South East has the second largest tech specialist workforce after London and in 2019 there were approximately 272,000 people working in tech roles within the region or 20 per cent of the England total. The areas of the South East with the largest concentrations of tech specialists are Buckinghamshire, Wokingham, Milton Keynes and Reading (over 10,000 or 4 per cent of the regional total in each case) whilst the density of tech employment is highest in Wokingham, Reading, East Hampshire, Runnymede, West Berkshire and Bracknell Forest (over 10 per cent in each instance).

Despite a base of such a large number of tech specialists, the number of people in the South East working in tech roles increased by just 6 per cent between 2014 and 2019 making this the second smallest regional increase recorded over the five-year period. Much larger increases were observed amongst the constituent authorities, however, and in particular: Thanet, Tandridge, Wealden, Waverley, Eastbourne, Chichester, Swale, East Hampshire, Runnymede, Test Valley, Arun and Hastings (all over 100 per cent during this period).

4. Tech specialists future forecast

There were 277,000 tech specialists based in the South East of England in 2020 and with 20 per cent of the national total the South East is second after London with respect to tech (specialist) employment levels. By 2050 however, the number of tech specialists in the South East region is expected to have risen by around 67 per cent or 186,000 people to almost half a million (463,000) people.

Across the region the growth rate will be greatest in Dartford in particular (a forecast rise of 112 per cent) whilst the increases in numerical terms will be greatest within Buckinghamshire (up 10,600), Wokingham (8,500), Milton Keynes (7,400) and Reading (7,000). Conversely, Rother and Eastbourne in particular will likely experience the smallest increase in tech specialist employment with increases of well below 1,000 forecast to occur in each case (500 and 600 respectively).

Over the 2020-30 period the number of tech specialists working as managers and directors in the South East is forecast to increase by 75 per cent (54,000 people), tech professionals by 73 per cent (105,000) and technicians and engineers by 44 per cent (28,000 people).

Figure 10. High growth areas (top 10 of 33 above the regional average) for tech employment in the South East by council, 2020-50

Dartford: 112%

Swale: 93%

Ashford: 91%

Dover: 90%

Vale of White Horse: 90%

Maidstone: 90%

Tonbridge and Mailing: 87%

Horsham: 81%

Eastleigh: 80%

Wokingham: 78%

South East: 67%



Source: Sagacity Research Ltd

The South West

1. Economic contribution

The tech sector was worth £6 billion to the South West economy in 2018 (ie 4 per cent of regional GVA and 5 per cent of tech GVA across England as a whole) and has increased by 46 per cent over the past decade (2008-18) – a rate well above that for the South West economy as a whole (31 per cent) but on par with tech sector growth in the whole of England.

Bristol is the largest tech economy in the South West (£0.9 billion GVA in 2018) followed by South Gloucestershire (£0.8 billion) though tech accounts for the largest share of GVA within the South Hams area. Over the past ten years the highest rate of growth in the tech economy was recorded in East Devon and Teignbridge where GVA contribution increased by over 200 per cent in each case whilst growth of over 100 per cent occurred in four other authorities over the period. 

2. Tech business base

There were 14,000 tech businesses in the South West of England in 2020, representing 6 per cent of the local business population and 8 per cent of tech firms in England. The number of tech businesses in the region has increased by 34 per cent over the past ten years which is an increase well below the all-England figure (52 per cent) and the lowest level recorded amongst all the English regions bar the East of England (also 34 per cent). The number of tech firms has however risen faster than the norm in four councils: Gloucester, Tewkesbury, South Gloucestershire and Bristol (between 53 per cent and 79 per cent).

Bristol and Wiltshire are home to the largest number of tech firms (1,600 in each case), whilst tech density is highest in Cheltenham (11 per cent) followed by South Gloucestershire, Tewkesbury and Bristol again (9 per cent in each case).

3. Tech specialists employment trends

The South West is home to 109,000 tech specialists or 8 per cent of the England total whilst internally, Bristol along with Bournemouth, Christchurch and Poole are the main centres of regional tech employment - these two areas accounting for around 25 per cent of the South West total. The highest tech employment density occurs in Swindon where 8 per cent of the local labour force hold tech jobs compared with just 4 per cent within the region as a whole.

Over the past five years the South West recorded the lowest growth in tech specialist numbers of all the English regions - increasing by just 2 per cent over the 2014-19 period or at a rate three times lower than for the workforce as a whole. Much greater increases were apparent within certain council areas however - notably Gloucester and Torbay (over 100 per cent).

4. Tech specialists future forecast

The number of tech specialists in the South West of England is expected to more than double over the 2020-50 period (an increase of 108 per cent) from 112,000 to 233,000 people.

By council area the rate of growth will be highest in South Gloucestershire (141 per cent), Tewksbury (137 per cent) and East Devon (126 per cent) whilst Dorset, South Somerset and Bournemouth, Christchurch and Poole will exhibit the lowest rates of growth over this period (85 per cent, 86 per cent and 87 per cent respectively).

The scale of the increase in tech specialist employment is predicted instead to be greatest in Bristol (up 19,100), South Gloucestershire (up 9,800) and, again, Bournemouth, Christchurch and Poole (9,200). By contrast the areas of West Devon, the Forest of Dean and Torridge will see only minimal increases in tech specialist workers between 2020 and 2050 (500 or less in each case).

By tech specialism, the South West will see growth in managers and directors of around 118 per cent, the highest level of all English regions, as will be the case for tech professionals (116 per cent). The number of technicians and engineers will grow much more slowly (60 per cent) and this will be reflected in the scale of employment growth for these workers (ie an increase of 20,000 compared with 34,000 tech managers and directors and 67,000 professionals).

Figure 11. High growth areas (above the regional average) for tech employment in the South West by council, 2020-50

South Gloucestershire: 141%

Tewkesbury: 137%

East Devon: 126%

Bristol, City of: 123%

North Somerset: 120%

Mid Devon: 119%

Cotswold: 119%

Bath and North East Somerset: 116%

Teignbridge: 116%

Cornwall: 112%

South West: 108%

Source: Sagacity Research Ltd

Overview

The forecasts accompanying the report are trend-based forecasts based on ONS data covering population, employment and occupation and overall have been derived using a top-down approach ie  population → employment → IT professionals → IT occupations but also on a geographical level: England → regions → councils. This approach has meant that the forecasts are all internally consistent and sum to the most robust number eg England Level

All of our input data has been sourced from ONS directly and/or via NOMIS and has been projected forwards using a range of simple mathematical techniques to:

• smooth noise in the inputs
• model COVID-19 recession and recovery
• manage the speed of spread of technological change across geography.

 Though every effort has been taken to ensure the accuracy and validity of the data presented in this report, it should be noted that any forecasts out to 2050, especially those at low levels of geography and in specific industries or occupations have inherently large error margins arising from the fact that the data upon which they are based (in this case ONS Annual Population Survey estimates) are derived from surveys of the population which, at this level, encompass a relatively small number of respondents.

Specific steps

The first phase of the forecasts was to produce estimates for employment in England till 2050 and was undertaken using trend projections of the population by age set against employment by working age with adjustments incorporated to account for the impact of COVID. These adjustments were derived from observations of changes occurring following the 2009 financial crisis.

We then created employment forecasts at regional and sub-regional level and adjusted the share of employment in respective areas by the associated change in share of population for each year of the forecast period.

These forecasts were then used to predict employment levels for IT professionals – again by applying shares of an England level forecast (ie based upon historical trends of IT professional employment as a proportion of the total workforce). For these forecasts we did not model a post-Brexit/COVID-19 slow down and recovery as there is evidence that they have not affected employment levels of IT professionals.

To create employment forecasts at the regional and sub-regional level we adjusted the share of employment in that area by the change in the share of the population in that area each year. In this case, at sub-region level we employed three year weighted averages to help account for large fluctuations in ONS estimates arising through associated sampling errors and we have also applied further Location Quotients- based constraints, assuming that over the long term as in this case, there will be some convergence to the mean, ie areas that lag the natural number of IT professionals you would expect based on the population would slowly catch up and vice versa. In effect this constraint models the spread of technological change out from the areas where it is currently more concentrated.

Lastly, the regional/sub-regional tech employment forecasts were broken down by individual occupational groups which was accomplished by projecting forward occupational shares using a log forecast methodology and applying the resulting distributions to the localised employment projections.