Why London isn’t the only hotspot in the UK tech sector

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London remains the dominant city in the U.K.’s vast technology sector, but other cities surrounding the London area and beyond are experiencing considerable growth, says a new report from KPMG, a global professional services company.

According to the company’s latest Tech Monitor/UK, British tech companies remain vibrant and optimistic as one new tech enterprise is created every four hours, which has been the trend for the past five years.

This figure is based on the net gain of roughly 45,000 tech firms in that same time frame, which represents a 31 percent increase. Moreover, the report found that the UK tech sector has produced more jobs at a faster and higher rate than the rest of the UK economy.

Tech staff numbers grew in the third quarter of 2015, and businesses continue to be optimistic about next year. What should be noted, however, is the fact that third quarter growth softened as it was the weakest in more than two years.

When looking at the locations for tech hubs, London is still No. 1 for enterprises, but other places surrounding or nearby London are making gains, too. In fact, of the 15 fastest-growing local authorities in the UK, more than half of them were London boroughs.

For instance, KPMG states that Reading is “the number one tech cluster in the UK” as more than one-fifth (21.7 percent) of its businesses are situated in the technology sectors. It should be noted, however, that this statistic doesn’t necessarily mean Reading has a great number of tech companies than other cities but rather a larger proportion of tech companies.

Other cities on this list include Workingham, Slough, Hounslow and Milton Keynes. Also, cities with the fastest increase in the tech sphere include Warwick (28 percent), Hackney (25 percent) and Rotherham (21 percent).

KPMG states that cities can benefit from the significant gains in tech enterprises in various ways, such as a university in the area, lower property prices or infrastructure investments from either the private sector or public sector.

World’s Leading Tech Cities

This past summer, Compass released its 2015 edition of the Startup Genome Project that offered a look at the ranking for the world’s 20 leading startup cities. London ranked No. 6., and Toronto was just behind Silicon Valley, New York City, Los Angeles, Boston and Tel Aviv.

UK is also home to some of the best and brightest B2B startups as well. A report released by IDG Connect earlier this year listed the top 20 pre-IPO firms in B2B tech, and a large chunk of them were founded in the UK.

An example of just one B2B enterprise is Anaplan, a British software tech startup that’s located in York, hovering near England’s North Country. Anaplan has raised more than $150 million from a plethora of well-known brands, like HP, McAfee, Pandora and Expedia.

Observers may concede that much like New York and Silicon Valley, it can be rather expensive for a startup to operate in London. However, akin to New York and Silicon Valley, if you want to garner the pulse of the industry then you have to go where everyone else is. And in the UK, that happens to be London.

Photo via Flickr, Creative Commons

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Andrew Moran

Andrew Moran is a full-time professional writer and journalist, who covers the areas of business, economics and personal finance. He has contributed to Benzinga, Capital Liberty News, Career Addict, Money Morning and PFHub.