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The recent Mayoral Tech Manifesto sets out proposals to continue London's development as a digital city, and has highlighted a talent shortage as its number one concern.

Though current immigration regulation is less of a concern for those businesses surveyed, the manifesto doesn't directly tackle the issue of the UK's possible exit from the EU (a central government affair).

Has the Brexit debate as yet ignored the ramifications for tech, an increasingly important industry in the capital?

Let's look at a bunch of stats to start, and if you want to benchmark your own digital knowledge against industry peers then take our Digital Skills Index.

The value of tech & digital to the economy 

The Manifesto, produced by techUK, Tech London Advocates and the Centre for London, states that 382,000 people are employed in the technology and information sectors in London.

According to a study by South Mountain Economics in 2014, this sector has been responsible for 30% of the capital’s job growth since 2009.

The recent Tech Nation report from Tech City recognised 1.56m digital tech economy jobs in the UK, alongside 58,000 digital tech businesses.

Tech jobs, according to the same report, grew 11.2% between 2011 and 2014; the rest of the workforce grew by just 4%. 

Skills shortage as a major challenge

The following chart from the Manifesto shows results from a digital survey of Tech London Advocates, conducted during December 2015 and January 2016. There were 304 participants.

As you can see, more than 43% thought that a talent shortage was the biggest challenge to the sector. Trailing in second at only 18% was 'access to funding'.

survey of challenges to tech sector

Other surveys corroborate this finding.

  • techUK study in 2014 found that 93% of tech firms believe their business is negatively affected by the skills gap.
  • Econsultancy's study into Effective Leadership in the Digital Age found 40% of respondents were concerned that recruiting staff with suitable skills was a significant barrier to digital progress.
  • The aforementioned Tech Nation study reported that access to talent is the biggest frustration for UK tech companies, identified by 43% of respondents, with finance second at 39%.  

How to meet this demand for talent? 

One more stat for you from the Manifesto. Research from O2 suggests the UK will need to fill 766,000 new digital jobs by 2020, and train 2.3m digitally skilled workers.

So, how could this be done?

1. Apprenticeships

The Government's Apprenticeship Levy will seek to raise £3bn, starting in 2017 by taxing businesses above a certain size.

However, though this significant investment sounds promising, the Mayoral Manifesto points out that with few tech apprenticeships already in place, the investment may not be best utilised.

There are only 0.4 apprentices taken on per 100 tech employees in London, currently, according to a London Assembly study (table shown below).

It's not just money needed to produce new talented apprentices, the industry has to be ready to produce them, and London's tech sector may not be there yet.


2. Immigration

A series of practical policies are again advocated by the Manifesto.

  • No Tier 2 visa cap (Tier 2 is for skilled jobs coming from outside the European Economic Area).
  • Third-party sponsorship visas to be promoted, funded by tech accelerators and venture capitalists.
  • The reinstatement of post-study work visas, which were abolished in 2012.

The 2014 Labour Force survey showed that roughly half of those that immigrated to the UK in the year to September 2014 came from outside the EU (292,000 from a total of 624,000).

Some 251,000 people moved to Britain under the EU’s looser free movement rules.

While I don't have any stats about how many of these offered skills to London's tech economy, anecdotally I would suggest the impact has been significant, given the status of London as Europe's tech capital.

Do tech businesses want the UK to stay in the EU?

The Mayoral Manifesto does include some stats that support the UK remaining in the EU.

  • 'A 2015 survey of techUK members found that 71% favour staying in a reformed European Union, with a further 17% saying they would stay in regardless of further reforms.'
  • '78% believe the UK would lose influence on the issues that impact their business if it were to leave the EU.'
  • 'Similarly, 86% of Tech London Advocates surveyed last year said they believed the UK should remain in the EU.'

Though the Manifesto claims that a digital London will rely on close links with Europe, it stops short of backing the 'In' campaign.

Partly this is because the authoring bodies are politically independent, but mostly it's because the focus of the report is getting the right backing from the next London Mayor, not lobbying for any national outcomes.

Personally, I think combining the views of tech businesses on talent in the industry, it's hard not to envision a truly digital London as one that accepts skilled international immigrants but also EU nationals looking to build on existing digital skills.

Ultimately, this may create more jobs for British nationals by boosting London's digital tech economy.

mayoral tech manifesto

What else does the Manifesto recommend to bolster London as a digital city? 

Without going into too much detail (you can download the Manifesto here), there are five other key areas.

1. Regulation

To enable innovation such as self-driving cars and the Internet of Things. Regulation must ensure privacy, protection of labour market and innovation. 

2. Cyber security

Continuing work such as that done by the London Digital Security Centre, supporting SMEs with cyber security.

3. Infrastructure

Improving connectivity, available office space and rail and air transport.

4. Investment

Though VC funding records were smashed in early 2016 in London, and funding could be argued to be an effect just as much as a cause, City Hall needs to encourage continued investment, such as the Enterprise Investment Scheme and the Seed Enterprise Investment Scheme.

5. Trade

Beyond fintech, other parts of the London tech economy (medtech to cybertech, retailtech to greentech and more), need to be promoted on trade missions abroad. This would bring better funding and long term growth.


...apologies for a rather winding post with the key points from this salient report. If you work for a London-based business in tech, let us know your thoughts below.

Update 05/03/2016 by the author

Around the time we published this article, Tech London Advocates released the results of a new poll, directly asking 3,000 senior members of the London tech scene their opinion on Brexit.

The result was overwhelmingly against leaving the EU (87%). Only 3% declared they wanted to leave, with the remaining 10% as yet undecided.

81% of respondents also thought Brexit would make it harder to employe people from EU countries.

So, that rather puts that to bed.

Ben Davis

Published 4 March, 2016 by Ben Davis @ Econsultancy

Ben Davis is a senior writer at Econsultancy. He lives in Manchester, England. You can contact him at ben.davis@econsultancy.com, follow at @herrhuld or connect via LinkedIn.

852 more posts from this author

Comments (3)


Nick Miller, director at HMA International

This is a pretty irrelevant post

1. UK companies hardly recruit at all from EU countries - less than 4% of jobs from UK are advertised or placed abroad. Most of which are for the NHS or lower level jobs
2. Brexit will not affect free movement of labour
3. Tech city can now approve skills visas from any country in the world for tech workers.

We did our own research on 100 tech companies. None admitted to skills shortages.

8 months ago

Ben Davis

Ben Davis, Senior Writer at EconsultancyStaff

Hi Nick. Let us know if you publish your research. Would be good to see as a comparison.

8 months ago

Pete Austin

Pete Austin, CINO at Fresh Relevance

Of course, Brexit would make it somethat harder to employ people from EU countries" but this will be balanced by Brexit making it much easier to employ new people from non-EU countries.

I would expect talent shortages to reduce overall, as the discrimination in UK employment law are removed, between new workers from Europe vs the rest of the world.

8 months ago

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