Member Article

The UK tech sector: a health check

It’s technology week on Bdaily. Here, Nick Hungerford, CEO and co-founder of investment managers Nutmeg, shares his perspective on the UK technology industry landscape.

The Radio Times is currently holding a vote on the 50 greatest British inventions – inspired by the BBC’s series, The Genius of Invention. There are two striking themes in the list. One, the British invented pretty much everything, from the tin can to the chocolate bar to the tyre to the television. And two, most of these innovations took place a very long time ago. Faraday’s electric motor? 1821. Macintosh’s waterproof material? 1823. Cement? A year later. Stephenson’s railway? The year after that. The only invention of any note in the second half of the 20th century was the ATM, in 1967.

One glaring omission in this list is the internet – inspired by the work of Tim Berners-Lee, a Brit, and exploited much better by pretty much everyone else. When people today think of tech firms, they tend to imagine the balmy climate and laid-back atmosphere of California. They don’t, as a rule, think of an office next to a homeless shelter in Vauxhall, south London.

And yet when, in 2010, I founded Nutmeg, the first online discretionary investment manager capable of offering diversified portfolios to individuals of almost any level of wealth, I quickly decided that the UK was the perfect place to build a FinTech business. Quite apart from the emotional ties – I grew up in England and worked in the City for almost a decade before studying for an MBA at Stanford Business School – I agree with Jimmy Wales, the founder of Wikipedia, who said in an interview in 2011 that there is no better place for an internet start-up than London.

The tech industry in the UK is a great deal more established than many think. In Cambridge some 1,400 hi-tech businesses employ more than 53,000 people and turn over more than £13 billion a year. London, too, has many of the ingredients for similar rapid expansion. Exciting new companies such as Hailo, the taxi app, are joining established players such as Facebook and Google. Kickstarter, the crowdsourced funding platform, launched here in October. And from a specific FinTech perspective, the capital is the perfect home to a young, concentrated, tech-savy, finance-savy population who are crying out for someone to improve the stuffy, opaque world of investing.

This is not, of course, to say that there isn’t room for significant improvement in the UK tech scene. There is more that the government can do, from cutting red tape to introducing more tax incentives. A think tank report last June looked at Tech City and identified a shortage of skills; a lack of connectivity and mentoring; and prohibitive rental prices. A shockingly low 17 per cent of tech jobs are held by women.

Most of all though, it is up to individuals – and teams of individuals – to rediscover the spirit of Faraday and Stephenson. Proper companies need to solve proper problems, not invent another five-minute-wonder app. “Why isn’t Mark Zuckerberg British?” asked Boris Johnson in his Telegraph column last year. Hopefully, the next one will be.

This was posted in Bdaily's Members' News section by Nick Hungerford .