Alongside Markit, KPMG has compiled a comprehensive report into the tech industry, giving an overview of market performance and insights on trends and outlooks for the future
For the first time, the quarterly report has a section on UK tech startups and their success rates, which contains some very encouraging information. The results of the most recent edition of Tech Monitor have alluded to the fact that the tech sector and the wider UK private sector are moving at very different speeds.
Tech defied the apparent slowdown of the wider UK economy towards the end of 2014, opening the widest performance gap between tech and the rest of the private sector since late 2008.
Job creation and new businesses in technology also exceeded benchmarks across the UK substantially in the final quarter of 2014, with companies citing ‘a new product launches’ as the cause of this.
Tech Monitor UK is based on results of survey carried out by Markit in order to determine the thoughts of a specially selected panel of tech sector executives, providing a unique assessment of the sector’s economic performance.
Responses from executives on this panel are then moulded into figures to represent growth or speed of growth of a variety of indicators.
For example, profitability rose at the second fastest rate since 2007, to 55.8 in Q4 2014 from 52.4 in Q3 (with 50 representing no change).
As well as profitability, job creation also rose in the final quarter of the year. Technology Sector Head at KPMG, Tudor Aw commented: “In a world where economies are facing ‘jobless recoveries’, it is fantastic to see the UK Tech Sector combine its increase in business activity with strong job creation. This period of sustained Tech sector job creation now stretches to 5 years.”
Coupled with this, is the evident increase in survival rates of tech startups in the UK, especially when compared with the average UK company. KPMG estimate that UK tech sector companies have a two-year survival rate of approximately 80% since the financial crisis, compared with the 74% average.
The report was published earlier this month and you can download it here.