The UK’s fastest growth industries

31 May 2018

In his Spring Statement, Chancellor Philip Hammond said the UK economy will grow faster this year than previously forecast.

He revised the growth forecast for 2018 upwards from 1.4% to 1.5%, although both the 1.5% growth forecast for 2021 and £1.6% for 2022 were revised down slightly by 0.1%[i].

While no one can be sure exactly what Brexit will mean for UK businesses, the prospects for certain industries – particularly those in IT and technology – are looking very healthy indeed…

Fintech

Fintech is a word you’ll be hearing a lot in the coming months and years. Short for financial technology, it’s set to dominate the UK economy beyond 2018.

UK-based Fintech firms are expecting a whopping 88% growth over the next three years [ii], a survey by the London Stock Exchange shows. The Government’s ambition is for the UK to lead the world in developing Fintech.

With the finance industry still facing challenges in the aftermath of the economic crisis of 2008 as well as the uncertainties over Brexit, demand for technical expertise in finance is high.

Many established banks aren’t well equipped to deal with the digital revolution – just look at what happened recently when TSB tried to upgrade its system. Some customers were unable to use online and mobile banking services for days.

Digital marketing and advertising

The advertising industry continues to go from strength to strength. Although it went through a period of instability with the arrival of the digital revolution, it’s now adapted to this change very successfully.

It has enjoyed eight successive years of growth [iii], and that trend looks set to continue. According to a report by media research company Group M, the sector is expected to grow by 4.8% in 2018, taking total investment to £19.8 billion[iv]. One sub-division heading for big things is audio-visual content creation. This £1.3 billion business grew by 28% in 2016 and by 14% in the first half of 2017.

The growth in content marketing is also set to continue beyond 2018 – companies rely on SEO, blogs, social media and email marketing to raise their profile.

Biotechnology

Biotech is making big strides in fields such as medicine, agriculture and industry. As technology improves, biotech has huge potential for growth. Ultimately, it could make people’s lives better by finding treatments for conditions like dementia and cancer, and feeding the world by improving the yield of crops.

The UK’s biotech industry is flourishing. In 2017, British-based biotech firms raised a total of £1.2 billion through investment, with £515 million coming from venture capital funding, £234 million raised in initial public offerings (IPOs) and £452 million raised in follow-on funding[v].

Virtual reality

With Britain a prominent player in the global gaming and digital entertainment industries, UK-based companies are at the forefront of VR’s move to the mainstream.

But VR isn’t just for gamers – it’s becoming increasingly popular in the world of work too. Its potential is limitless – it can complement fire and police training procedures, test safety measures, provide therapy for hospital patients and be a powerful tool in digital marketing as customers immerse themselves in new products and services.

The virtual and augmented reality market is expected to be worth 162 billion US dollars (£120 billion) globally by 2020[vi], and UK firms can capitalise on that.

Here, the majority of VAR/AR companies are based in London, but studios are popping up all over the country. Most are focused on producing content, but some are developing the technology that enables further VR experiences to be built and enhanced.

Businesses that rely heavily on technology will need to make sure they have the right insurance in place to protect them against cyber-attacks and data breaches.

Find out more about our Cyber Cover product here.

 

[i] https://www.independent.co.uk/news/business/news/spring-statement-2018-uk-growth-gdp-revised-2021-2022-philip-hammond-a8253596.html

[ii] http://www.cityam.com/282644/britains-fintech-firms-expecting-growth-rocket-over-next

[iii] https://www.adassoc.org.uk/advertising-association-warc-expenditure-report/expenditure-report-q3-2017-uk-adspend-sees-record-2017/

[iv] https://www.groupm.com/news/groupm-uk-advertising-will-grow-ps198b-2018-increasing-48

[v] https://www.bioindustry.org/news-listing/new-report-reveals-uk-has-the-strongest-rd-pipeline-in-europe-and-the-uk-sector-is-maturing.html

[vi] http://uk.businessinsider.com/virtual-and-augmented-reality-markets-will-reach-162-billion-by-2020-2016-8

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