The UK economy, worth around £2.1 trillion, is already 3.6 percent bigger than France’s yet will be 16 percent bigger by 2036 says the new annual survey from the Centre for Economics and Business Research (CEBR).
The findings come in the independent business forecasting think tank’s annual World Economic League Table, which examines the economic growth of 193 countries.
Douglas McWilliams, deputy chairman of CEBR, said:
“Tech is the dynamic factor in economic growth and Britain is investing more in this area than France and Germany put together.
“Between half and three-quarters of UK economic growth has come from the tech sector.”
The World Economic League Table shows the UK currently has the world’s fifth-largest economy with a gross domestic product of around £36,357 per head of population.
Karl Thompson, an economist at the CEBR added:
“We are expecting that tech will be the big winner over the coming years.
“We have identified nine sectors of tech where the skill requirements are likely to increase by more than 100 percent by 2031, led by Artificial Intelligence, virtual and augmented reality, robotics and medical tech, all of which are likely to need an increase in demand of more than 300 percent.”
In 2021, UK tech captured more than a third of investment into Europe.
The £29.4 billion raised by UK startups and scale-ups was double the figure raised in Germany (£14.7 billion) and almost three times that raised by France companies (£9.7 billion).
UK tech investment accounted for a third of the total £89.5 billion that flowed into the European tech ecosystem this year.
The majority of the money coming into UK tech is from the US, with 37% of all funding coming from the States, up from 31.5% last year, with the majority of it going into fintech and health tech companies.
Over 28% of UK venture funding came from domestic capital. Competition for deals among VC funds is heating up as more US venture funds launch offices in the UK, including Bessemer Venture Partners, General Catalyst, Lightspeed Venture Partners and Sequoia Capital.
More funding means more unicorns (companies valued at more than $1 billion), with 29 British unicorns created this year including the e-commerce platform Depop, car selling platform Motorway, insurance disrupter Marshmallow, and the challenger bank Starling Bank. This takes the UK’s total unicorn figure to 115 meaning 25% of the UK’s total unicorns were created in 2021 alone.
The UK has more unicorns than France (31) and Germany (56) combined.
The CEBR report says:
“The UK Government hopes to harness its new position outside the EU to increase competitiveness and promote financial services and new economy exports to the whole world. More broadly, ensuring that post-Brexit immigration rules can meet the demands of the economy for both ‘skilled’ and ‘unskilled’ workers will be pivotal for the economy’s long-run performance. This is especially important for the UK’s ‘Flat White Economy’, the merger of digital and tech where the UK is the clear European leader but where it can only keep its lead if it retains access to a skilled and creative labour force.”
India, after overtaking France and the UK in 2019 in the World Economic League Table, has now fallen back behind the UK again in 2020 and 2021.
The Asian giant is expected to regain 6th position from France in 2022, before overtaking the UK in 2023. India is then expected to make good progress towards becoming the world’s third-largest economy in 2031, the think tank says.
The fastest-growing economies in this year’s World Economic League Table predictions are those of Vietnam, heading from 41st place in 2021 to 20th place in 2036; Bangladesh heading from 42nd to 24th and the Philippines from 37th to 25th.
Indonesia, the fourth most highly populated country in the world, is also set for record growth by 2036.
Click here for the full World Economic League Table.