The UK is a global centre for socially responsible technology innovation, according to new analysis from Tech Nation.
Research compiled by the UK network for ambitious digital tech entrepreneurs found that ‘tech for social good’ companies were worth £2.3 billion in 2018, with a turnover of £732 million – larger than the amount generated by the manufacture of consumer electronics in the UK (£634 million).
For-profit ‘tech for social good’ companies have raised over £1 billion in venture capital funding to date. Many of these are successfully pursuing both financial and social returns, using sustainable models that create employment and economic growth, as well as an array of positive societal impacts.
For example DeepMind, the London-based artificial intelligence company bought by Google in 2014, has stated ambitions to tackle some of the world’s thorniest social and political problems, from healthcare to climate change.
Other successful for-profit tech for good businesses include Bulb, a green, renewable electricity supplier; Sweatcoin, which encourages exercise by paying users according to the number of steps they take; and Elder, a service that helps people find and manage live-in care.
Nearly half (45 per cent) of the 490 companies identified are at an early stage in their journey and have raised only seed funding. These young dynamic businesses are making contributions in areas including EdTech (10.3 per cent of total companies), FinTech (9.2 per cent) and artificial intelligence (8 per cent).
The report also emphasised the importance of social impact investors that value both social and financial return, such as Bethnal Green Ventures and Big Society Capital. To date, profit-seeking tech-for-good businesses in the UK have collectively raised £1.09 billion in venture capital.
Tech Nation’s research arrives as the global spotlight is intensifying on the social impact of disruptive technologies, and as consumers are becoming increasingly concerned about the ethical credentials of digital products and services.
In the UK, the Department for Digital, Culture, Media and Sport has partnered with the Social Tech Trust to kickstart a fund of up to £30 million to provide access to finance and position the UK as a global leader in socially transformative tech. A further £1 million will be available to incentivise organisations to use tech to help tackle loneliness and bring communities together.
“At a time of uncertainty and flux, the UK is poised to lead the world in applying technology for strategic social ends,” said Sarah Wood, co-founder and chair of Unruly, and board member at Tech Nation.
“Our nation’s social safety net, coupled with a lively non-profit sector and bustling tech ecosystem, allow for a concentration of energy and talent that’s second-to-none.
“We have all the foundational pillars we need to be the global hub for tech-for-good; now we need to keep up the momentum and make sure we nurture these businesses as they expand their horizons beyond our shores.”
Today (24th April) Digital Secretary Jeremy Wright (pictured below) will host firms in the sector at a roundtable at Downing Street. Successful British start-ups due to attend include crowdfunding platform BEAM, financial inclusion company GivingStreets and cancer support organisation Live Better With.
“I’m pleased to see the UK’s ‘tech for social good’ sector is not only having a positive societal impact but is also making a significant contribution to the economy,” Wright said.
“We are working hard to support those in the field by improving charities’ digital skills, boosting access to finance for social tech ventures and backing an awards scheme to celebrate up-and-coming entrepreneurs.
“I look forward to meeting some of the sector’s leading minds today to discuss how we can make sure the UK is a global leader in this area.”
Meanwhile, the not-for-profit segment of social tech is also enjoying exponential growth: over half of the organisations currently registered with Companies House (53 per cent) were incorporated after 2014, and 2017 was the highest year on record for registrations.
However, for-profit social tech companies have seen particular challenges, with the number of incorporations having dropped since 2016. The high percentage of early-stage start-ups in the area highlights the need for policymakers and investors to support companies as they scale and grow – particularly given social tech firms will struggle to match the superstar salaries offered by more established tech giants.
The Tech for Social Good report is supported by Berenberg and BT.