5 ms·

UK tech industry valued at $1T, becoming third country to hit milestone

35 points by csomar 4y ago

manxman 4y ago
Is this something to be proud of at the peak of "the everything bubble"?
- jstx1 4y ago
  For most asset classes the peak was late 2021.
jphoward 4y ago
"almost five times larger than France and Sweden" - the UK population is almost 7 times that of Sweden, so that's quite flattering. But what are the reasons for France's relatively small tech industry?
- Bayart 4y ago
  Less access to capital, engineers still considered glorified blue-collars.
  - mytailorisrich 4y ago
    In France "engineers" are considered the top of the pile, they have a higher status than in the UK, not least because they traditionally stem from "Grandes Ecoles". Edit: interesting that the person I'm replying to wrote "considered glorified blue collar", which I interpret as status, and that those who are replying to me focus on pay. In the UK a plumber (blue collar) or train driver can make more than a software engineer who is university educated and enjoys a higher status, for instance. Salaries in tech/software are not that different in UK and France. Perhaps London salaries in hot startups are outliers. I don't think there is a difference in the way devs/programmers are considered on either side of the channel. The key is not that but rather the company/industry. A tech company will consider them a key resource, an old industrial company maybe not...
    - goethes_kind 4y ago
      I think he means programmers.
    - weddpros 4y ago
      "engineers" are considered the top of the pile: as long as they're not talking salaries... I switched to not working for french companies for that very reason. Engineer, loads of experience, low salary compared to the UK or US. I know you could put a price on the "french social privilege", but I didn't benefit from it the least bit (no kids, working) so I was better off without it.
    - baazaa 4y ago
      Even talking about mechanical engineers, they're paid poorly. The average is like $40-50k USD atm. There's a reason inequality is lower in these countries than the US, because high-skilled workers are paid much less.
    - Bayart 4y ago
      > In France "engineers" are considered the top of the pile, they have a higher status than in the UK, not least because they traditionally stem from "Grandes Ecoles". Very few people come from the Grandes Écoles, that's the point of them. There are far more engineering schools than that. And even then they don't necessarily have exceedingly high status and pay. In France status means being management/exec. You're technical ? Well, get fucked, you're from a lower caste.
      - mytailorisrich 4y ago
        Hence why I wrote 'traditionally' but even being an engineer from an engineering school is high status in France. You seem to conflate your experience and generally the pecking order in a company with something specifically French whereas it's not.
      - yamrzou 4y ago
        > In France status means being management/exec. You're technical ? Well, get fucked, you're from a lower caste. That was my impression as well, working as an engineer in France. Is it different in the UK or other European countries?
- buro9 4y ago
  Workers rights are a disincentive to SV funding, as well as expansion by existing companies (at least until the company is already huge). Cost of starting up and taxation (as you have a lot of risks, why increase them by increasing costs so early). I don't agree with these (if everyone had rights like France it would be a non-issue) but that's what I've seen in discussions about opening offices in France, hiring in France, setting up in France. Edit: Sigh, downvotes... but perhaps people don't realise that things like unions are essentially mandatory in France when the employer has more than 50 employees: https://en.wikipedia.org/wiki/Works_council#France https://en.wikipedia.org/wiki/Works_council#France or that the standard corp tax is one of the highest in Europe https://taxfoundation.org/corporate-tax-rates-europe-2022/ https://taxfoundation.org/corporate-tax-rates-europe-2022/ . It's not that high tax rates alone will be a disincentive - it isn't, Germany is higher - but combine high tax rates with a lot of employee rights and now try to imagine the modern SV startup that leverages gaps in legislation thriving in this... it doesn't.
  - seibelj 4y ago
    France is the last country in the West I would hire in. A decent place to conduct business but the worst place to hire labor.
    - CoastalCoder 4y ago
      Could you elaborate? I know very little about this aspect of French commerce / work.
      - seibelj 4y ago
        Very difficult to fire a FTE. Imagine you take a risk on someone and they don't work out. It's extremely expensive and time consuming to exit that poor performer. This isn't even mentioning the huge bureaucratic state that is tuned towards large enterprises and not small business - be prepared for arbitrary and conflicting regulations and taxes once the proper government agencies learn of your existence.
        4y ago
- matesz 4y ago
  Does language barrier matter here?
- mytailorisrich 4y ago
  Article also says twice the size of Germany's and than valuation was 'only' 450 billion in 2018. So my guess is that this is because London is both a major financial centre and a fintech hub.
- gsatic 4y ago
  More english speakers than french speakers in the world?
- mrtksn 4y ago
  It's not just France but Europe in general doesn't have much foot into high growth businesses that are colloquially called "Tech". UK is a superpower in Europe in that regard, always was and will continue to be. The reasons are a never ending debate, everyone(including me) likes to explain it from their own world view. If you are libertarian you will probably say because it's the big government, high taxes, workers rights, unions etc. but I personally don't like these explanations because they fail to explain why the distribution is not homogeneous within those legislative regions. So in reality, it's not that US and UK dominate the "tech" but it's SV and London. For whatever reason it is, you cannot do some tricks and have SV in Detroit and London in the Balkans.
  - timthorn 4y ago
    But it isn't just London - the UK has substantial tech clusters in Manchester, Leeds, Bristol, Cambridge etc. I'd posit that the BBC Computer Literacy Project, Acorn and Sinclair were central to seeding the right skills base in enough of the population to build a sustainable industry.
    - mrtksn 4y ago
      Of course, so does Europe has tech clusters but all the difference comes from the concentrated one and the continental Europe doesn't have one. Europe does have a lot of tech companies and startups, especially EU is a rich place with a lot of innovation and high tech business happening. What EU lacks is unicorns.
  - hnhg 4y ago
    I cannot take seriously the comparison between SV and London. Their tech cultures aren't even remotely the same, and never will be.
    - mrtksn 4y ago
      What comparison?
      - 4y ago
- deleted 4y ago
  [deleted]
stevenhuang 4y ago
What a horrendous site to open on mobile.
reillyse 4y ago
This might be my little Irish brain firing off, but why is the picture in the article of Ireland and Britain? To the ignorant it would appear from the picture that Ireland is part of the UK. I can only assume that whoever picked the image didn’t realize that Ireland is not in the UK which is strange for a website called Uktech news.
- martin-adams 4y ago
  Interestingly, I’ve seen a map of the UK where Southern Ireland had been completely deleted making the actual geography look different to reality. My thought at the time was that would be more confusing for my kids as they learn about countries, especially as my mum is Irish. I agree with everything you say, it needs a better visualisation.
- switch007 4y ago
  - dang 4y ago
    Please don't break the site guidelines like this. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- deaddodo 4y ago
  It’s surprising how many people outside of the British and Irish isles still think the Republic is constituent to the UK. As if it never moved passed it’s Free State period. Anecdotally: I’ve met Germans, Canadians, Australians, Americans, etc that were surprised to learn it’s completely sovereign.
- dan-robertson 4y ago
  I think it’s likely they just didn’t care. It looks a bit weird to delete the Republic of Ireland from the map. What would the equivalent for France/Germany look like? I would guess not a squarish blob-shaped country outline and a satellite-style image of the country likely would be too ambiguous. Probably a stylised flag image.
fxtentacle 4y ago
My impression is that the UK government is in dire need of good news, so I felt sceptical reading this. I'd expect Ireland to rank higher because all the large US companies have their EU offices there. At least on paper for tax purposes. Also, a lot of banks moved from the UK to Germany as a result of Brexit. My guess is those weren't counted as tech. In general, it appears to me that this report is crucially dependent on a very narrow and unexpected definition of what qualifies as a tech company. Looking at market cap rankings, they probably had to include Shell and BP to compensate for the likes of Bayer, Biontech, BMW in Germany. But is big petrol still tech? Also: "The total market capitalization of German companies listed on the Frankfurt Stock exchange reached 1.67 trillion euros at the end of June 2022." so they had to exclude some companies.. And that's just one stock exchange.
- sph 4y ago
  > I'd expect Ireland to rank higher because all the large US companies have their EU offices there. At least on paper for tax purposes. Aren't US companies incorporated in Ireland and Luxembourg basically paying no taxes? "Amazon had sales income of €44bn in Europe in 2020 but paid no corporation tax": https://www.theguardian.com/technology/2021/may/04/amazon-sales-income-europe-corporation-tax-luxembourg https://www.theguardian.com/technology/2021/may/04/amazon-sa...
  - fxtentacle 4y ago
    Yes. That's why I would expect Ireland to have more valuable tech companies than the UK.
  - nly 4y ago
    The same is true of London to a degree. London is dominated by private finance and trading firms, and many of those employing techies will be making a paper loss as far as HMRC is concerned, while their overseas arms make all the profit in 0% corporation tax jurisdictions.
- mytailorisrich 4y ago
  I wouldn't say that a lot of banks left the UK... "they moved the minimum they had to (not necessarily to Germany) in order to meet regulations and be able to continue operating in the EU" seems a more accurate summary. London is still the European financial centre and a hot hub for fintech.
jmfayard 4y ago
The article could also have been called > UK financial industry is huge Which I guess would not have surprised or interested as much people. Now before the financial crisis, we were already told that the financial sector was oversized because it was doing so much sophisticated innovation. When the shit hitted the fan everybody realized that all this crazy innovation extracted much more value than it contributed to the world. My question is: have we evidence that this has fundamentally changed because you label some financial companies as "Tech"?
_Microft 4y ago
After reading the submission title I tried to think of a UK tech company and honestly couldn’t come up with even a single name…
- unfunco 4y ago
  Arm?
  - onion2k 4y ago
    Not strictly a UK company any more.
    - throwawaylinux 4y ago
      Can you think of a US technology company?
- onion2k 4y ago
  UK tech companies tend to be B2B service companies rather B2C or product companies like the big name US tech companies, with the notable exception of Sage Group who are essentially the UK version of Intuit (but not quite so awful.) That doesn't really mean anything though. You can't get any useful information from asking "do these companies market themselves in ways that would make me hear about them?"
  - _Microft 4y ago
    This certainly explains why I couldn't remember any, thanks a lot!
thqworeiuo234 4y ago
Must be all that sweet "hard-earned" money from third-world countries coming into the Oligarchy of the City. Not surprising, since much of blood-sucked out of countries like India in the past went straight here.
timthorn 4y ago
The report referenced by (but not linked from) the article is this one: https://technation.io/a-decade-of-uk-tech/ https://technation.io/a-decade-of-uk-tech/
throwaway4good 4y ago
How much of this is due to the "depth" of the UK financial markets? I can see in Denmark that a lot of succesful tech startups end up IPOing in the US or UK. For example Just Eat or Unity.
- dan-robertson 4y ago
  This is also somewhat of an issue in the U.K. with lots of companies being sold to US firms like Google. Being acquired often feels much better than going public.

35 points by csomar 4y ago

manxman 4y ago

Is this something to be proud of at the peak of "the everything bubble"?

jstx1 4y ago
For most asset classes the peak was late 2021.

jphoward 4y ago

"almost five times larger than France and Sweden" - the UK population is almost 7 times that of Sweden, so that's quite flattering. But what are the reasons for France's relatively small tech industry?

Bayart 4y ago
Less access to capital, engineers still considered glorified blue-collars.
- mytailorisrich 4y ago
  In France "engineers" are considered the top of the pile, they have a higher status than in the UK, not least because they traditionally stem from "Grandes Ecoles". Edit: interesting that the person I'm replying to wrote "considered glorified blue collar", which I interpret as status, and that those who are replying to me focus on pay. In the UK a plumber (blue collar) or train driver can make more than a software engineer who is university educated and enjoys a higher status, for instance. Salaries in tech/software are not that different in UK and France. Perhaps London salaries in hot startups are outliers. I don't think there is a difference in the way devs/programmers are considered on either side of the channel. The key is not that but rather the company/industry. A tech company will consider them a key resource, an old industrial company maybe not...
  - goethes_kind 4y ago
    I think he means programmers.
  - weddpros 4y ago
    "engineers" are considered the top of the pile: as long as they're not talking salaries... I switched to not working for french companies for that very reason. Engineer, loads of experience, low salary compared to the UK or US. I know you could put a price on the "french social privilege", but I didn't benefit from it the least bit (no kids, working) so I was better off without it.
  - baazaa 4y ago
    Even talking about mechanical engineers, they're paid poorly. The average is like $40-50k USD atm. There's a reason inequality is lower in these countries than the US, because high-skilled workers are paid much less.
  - Bayart 4y ago
    > In France "engineers" are considered the top of the pile, they have a higher status than in the UK, not least because they traditionally stem from "Grandes Ecoles". Very few people come from the Grandes Écoles, that's the point of them. There are far more engineering schools than that. And even then they don't necessarily have exceedingly high status and pay. In France status means being management/exec. You're technical ? Well, get fucked, you're from a lower caste.
    - mytailorisrich 4y ago
      Hence why I wrote 'traditionally' but even being an engineer from an engineering school is high status in France. You seem to conflate your experience and generally the pecking order in a company with something specifically French whereas it's not.
    - yamrzou 4y ago
      > In France status means being management/exec. You're technical ? Well, get fucked, you're from a lower caste. That was my impression as well, working as an engineer in France. Is it different in the UK or other European countries?
buro9 4y ago
Workers rights are a disincentive to SV funding, as well as expansion by existing companies (at least until the company is already huge). Cost of starting up and taxation (as you have a lot of risks, why increase them by increasing costs so early). I don't agree with these (if everyone had rights like France it would be a non-issue) but that's what I've seen in discussions about opening offices in France, hiring in France, setting up in France. Edit: Sigh, downvotes... but perhaps people don't realise that things like unions are essentially mandatory in France when the employer has more than 50 employees: https://en.wikipedia.org/wiki/Works_council#France https://en.wikipedia.org/wiki/Works_council#France or that the standard corp tax is one of the highest in Europe https://taxfoundation.org/corporate-tax-rates-europe-2022/ https://taxfoundation.org/corporate-tax-rates-europe-2022/ . It's not that high tax rates alone will be a disincentive - it isn't, Germany is higher - but combine high tax rates with a lot of employee rights and now try to imagine the modern SV startup that leverages gaps in legislation thriving in this... it doesn't.
- seibelj 4y ago
  France is the last country in the West I would hire in. A decent place to conduct business but the worst place to hire labor.
  - CoastalCoder 4y ago
    Could you elaborate? I know very little about this aspect of French commerce / work.
    - seibelj 4y ago
      Very difficult to fire a FTE. Imagine you take a risk on someone and they don't work out. It's extremely expensive and time consuming to exit that poor performer. This isn't even mentioning the huge bureaucratic state that is tuned towards large enterprises and not small business - be prepared for arbitrary and conflicting regulations and taxes once the proper government agencies learn of your existence.
      - 4y ago
matesz 4y ago
Does language barrier matter here?
mytailorisrich 4y ago
Article also says twice the size of Germany's and than valuation was 'only' 450 billion in 2018. So my guess is that this is because London is both a major financial centre and a fintech hub.
gsatic 4y ago
More english speakers than french speakers in the world?
mrtksn 4y ago
It's not just France but Europe in general doesn't have much foot into high growth businesses that are colloquially called "Tech". UK is a superpower in Europe in that regard, always was and will continue to be. The reasons are a never ending debate, everyone(including me) likes to explain it from their own world view. If you are libertarian you will probably say because it's the big government, high taxes, workers rights, unions etc. but I personally don't like these explanations because they fail to explain why the distribution is not homogeneous within those legislative regions. So in reality, it's not that US and UK dominate the "tech" but it's SV and London. For whatever reason it is, you cannot do some tricks and have SV in Detroit and London in the Balkans.
- timthorn 4y ago
  But it isn't just London - the UK has substantial tech clusters in Manchester, Leeds, Bristol, Cambridge etc. I'd posit that the BBC Computer Literacy Project, Acorn and Sinclair were central to seeding the right skills base in enough of the population to build a sustainable industry.
  - mrtksn 4y ago
    Of course, so does Europe has tech clusters but all the difference comes from the concentrated one and the continental Europe doesn't have one. Europe does have a lot of tech companies and startups, especially EU is a rich place with a lot of innovation and high tech business happening. What EU lacks is unicorns.
- hnhg 4y ago
  I cannot take seriously the comparison between SV and London. Their tech cultures aren't even remotely the same, and never will be.
  - mrtksn 4y ago
    What comparison?
    - 4y ago
deleted 4y ago
[deleted]

stevenhuang 4y ago

What a horrendous site to open on mobile.

reillyse 4y ago

This might be my little Irish brain firing off, but why is the picture in the article of Ireland and Britain? To the ignorant it would appear from the picture that Ireland is part of the UK. I can only assume that whoever picked the image didn’t realize that Ireland is not in the UK which is strange for a website called Uktech news.

martin-adams 4y ago
Interestingly, I’ve seen a map of the UK where Southern Ireland had been completely deleted making the actual geography look different to reality. My thought at the time was that would be more confusing for my kids as they learn about countries, especially as my mum is Irish. I agree with everything you say, it needs a better visualisation.
switch007 4y ago
- dang 4y ago
  Please don't break the site guidelines like this. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
deaddodo 4y ago
It’s surprising how many people outside of the British and Irish isles still think the Republic is constituent to the UK. As if it never moved passed it’s Free State period. Anecdotally: I’ve met Germans, Canadians, Australians, Americans, etc that were surprised to learn it’s completely sovereign.
dan-robertson 4y ago
I think it’s likely they just didn’t care. It looks a bit weird to delete the Republic of Ireland from the map. What would the equivalent for France/Germany look like? I would guess not a squarish blob-shaped country outline and a satellite-style image of the country likely would be too ambiguous. Probably a stylised flag image.

fxtentacle 4y ago

My impression is that the UK government is in dire need of good news, so I felt sceptical reading this. I'd expect Ireland to rank higher because all the large US companies have their EU offices there. At least on paper for tax purposes. Also, a lot of banks moved from the UK to Germany as a result of Brexit. My guess is those weren't counted as tech. In general, it appears to me that this report is crucially dependent on a very narrow and unexpected definition of what qualifies as a tech company. Looking at market cap rankings, they probably had to include Shell and BP to compensate for the likes of Bayer, Biontech, BMW in Germany. But is big petrol still tech? Also: "The total market capitalization of German companies listed on the Frankfurt Stock exchange reached 1.67 trillion euros at the end of June 2022." so they had to exclude some companies.. And that's just one stock exchange.

sph 4y ago
> I'd expect Ireland to rank higher because all the large US companies have their EU offices there. At least on paper for tax purposes. Aren't US companies incorporated in Ireland and Luxembourg basically paying no taxes? "Amazon had sales income of €44bn in Europe in 2020 but paid no corporation tax": https://www.theguardian.com/technology/2021/may/04/amazon-sales-income-europe-corporation-tax-luxembourg https://www.theguardian.com/technology/2021/may/04/amazon-sa...
- fxtentacle 4y ago
  Yes. That's why I would expect Ireland to have more valuable tech companies than the UK.
- nly 4y ago
  The same is true of London to a degree. London is dominated by private finance and trading firms, and many of those employing techies will be making a paper loss as far as HMRC is concerned, while their overseas arms make all the profit in 0% corporation tax jurisdictions.
mytailorisrich 4y ago
I wouldn't say that a lot of banks left the UK... "they moved the minimum they had to (not necessarily to Germany) in order to meet regulations and be able to continue operating in the EU" seems a more accurate summary. London is still the European financial centre and a hot hub for fintech.

jmfayard 4y ago

The article could also have been called > UK financial industry is huge Which I guess would not have surprised or interested as much people. Now before the financial crisis, we were already told that the financial sector was oversized because it was doing so much sophisticated innovation. When the shit hitted the fan everybody realized that all this crazy innovation extracted much more value than it contributed to the world. My question is: have we evidence that this has fundamentally changed because you label some financial companies as "Tech"?

_Microft 4y ago

After reading the submission title I tried to think of a UK tech company and honestly couldn’t come up with even a single name…

unfunco 4y ago
Arm?
- onion2k 4y ago
  Not strictly a UK company any more.
  - throwawaylinux 4y ago
    Can you think of a US technology company?
onion2k 4y ago
UK tech companies tend to be B2B service companies rather B2C or product companies like the big name US tech companies, with the notable exception of Sage Group who are essentially the UK version of Intuit (but not quite so awful.) That doesn't really mean anything though. You can't get any useful information from asking "do these companies market themselves in ways that would make me hear about them?"
- _Microft 4y ago
  This certainly explains why I couldn't remember any, thanks a lot!

thqworeiuo234 4y ago

Must be all that sweet "hard-earned" money from third-world countries coming into the Oligarchy of the City. Not surprising, since much of blood-sucked out of countries like India in the past went straight here.

timthorn 4y ago

The report referenced by (but not linked from) the article is this one: https://technation.io/a-decade-of-uk-tech/ https://technation.io/a-decade-of-uk-tech/

throwaway4good 4y ago

How much of this is due to the "depth" of the UK financial markets? I can see in Denmark that a lot of succesful tech startups end up IPOing in the US or UK. For example Just Eat or Unity.

dan-robertson 4y ago
This is also somewhat of an issue in the U.K. with lots of companies being sold to US firms like Google. Being acquired often feels much better than going public.