The UK TMT sector is one of the fastest growing parts of the economy, annually contributing £125bn (a total 8% of UK GDP) as well as maintaining 1.3m jobs.
Investment in the sector has once again increased in 2015 to nearly £2Bn – showing an increase in activity and confidence. More interestingly, lending to the sector has also risen significantly which on the face of it is excellent news, however, one of the main reasons for this may be the increase in M&A Activity between larger businesses in the sector.
For example, BT’s takeover of EE (which has been provisionally cleared by the Competition and Markets Authority) is set to create a communications giant covering fixed-line phones, broadband, mobile and TV. The takeover more than trebles BT’s retail customers adding the 10 million it already had to EE’s 24.5 million direct mobile subscribers.
Social video platform Unruly Media’s recent acquisition by News Corp for £114m was another interesting example of how larger, more traditional media outlets are continuing to acquire smaller, new-digital tech businesses to ensure they don’t get left behind. Unruly specialises in distributing and tracking video ads across social media and has worked with brands including Dove, T-Mobile, Evian and Renault. News Corp said the company will work across all of their online properties, including its newspapers around the world, Fox Sports in Australia and HarperCollins.
Strength in the provinces
Throughout the year there has been continuous growth in the sector as it spans the whole country – not just the tech stronghold of London. There is a thriving contingency of businesses in centres such as Manchester, Bristol, Thames Valley, Cambridge and Scotland where we have fast growing hubs of technology businesses. This is great for the industry and the economy in offering wider choice and opportunity for businesses.
Looking forward
Another notable trend in the industry is the rise of FinTechs in London, which is presenting itself as a global FinTech hub. Literally hundreds of new businesses have been established in London tackling the FinTech sector and many are gaining acceptance and momentum across the sector with large scale adoption in high street banks.
Looking to 2016, disruptive technologies will continue to dominate the agenda with Cybersecurity in particular a huge issue for businesses – and the UK as a whole. George Osborne announced the government’s plans to double investment in online security to £1.9bn following the Paris attacks in November.
The emergence and general acceptance of cryptocurrency and, in particular, the underlying distributed ledger (blockchain) technology will be fascinating and one to watch.
More and more we will see new technologies that allow small companies to act like big enterprises with big data, cloud and affordable CRM being made available through a number of pay-as-you-go services. Big companies in turn will need to act more like smaller companies to keep up with innovations and technology.
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