UK Government Tech Market ‘To Be Worth £20bn By 2025’

The market for government technology in the UK could be worth £20 billion by 2025, creating opportunities for startups and smaller firms, according to a new report.

Rapid advancements in technology, along with the UK’s access to digital talent and capital, mean the country has the opportunity to lead the world in government IT, found newly established investment firm Public.

Growing market

“Government reforms, especially since 2010, have seen the UK lead the world in government digitisation,” wrote Public co-founders Daniel Korski and Alexander de Carvalho in a foreword to the report.

“No other country currently combines size of market with such a ready public acceptance of the digital world.”

The company based its projections on renewals of large IT contracts, a shift toward procurement from smaller businesses, investment into emerging technologies and the rise of companies whose services will “generally permate society”.

It estimated the world government IT market at $400 billion (£308bn) by 2025.

Public said many government departments have been prompted to improve their procurement processes in an effort to bring in a better quality of supplier, and estimated sales cycles at between two and 18 months.

“Our evidence suggests that it is possible to shorten government sales cycles to as little as three months depending on the size of contract and procuring governmental entity,” the report found.

It said key factors aiding successful bidders include compliance, the route they take to the market and their sense of mission.

Brexit opportunities and challenges

Exit from the EU could drive the adoption of new technologies if it spurs a reconsideration of government systems, Public speculated.

“If Brexit leads to a larger rethink of governmental systems, from rural payments to customs arrangements and identification, then it must inevitably drive a significant adoption of new technologies and new suppliers,” which could give UK suppliers a short-term boost, the report argued.

But the process could dampen the government IT market if it limits access to European talent and capital.

“Any impact on the access to skills, whether because of quotas, bureaucratic obstacles or even just the tone of public discourse, will be detrimental to the UK’s GovTech market,” Public stated.

As a result UK-based government IT firms will need support in their export activities and in their access to overseas talent and investment, the company argued.

GovStart start-ups

Public said it has launched a group of 10 start-ups that are to form the basis of its GovStart programme aimed at digitising public services.

The firms include healthcare platform Ask the Midwife and a machine learning-powered visual identity verification system called Eyn.

The start-ups show that “technology isn’t just about cool hipsters in Shoreditch, but about life-improving support for carers, smarter transport systems and new ways of training young people,” stated Korski, who acts as Public’s chief executive.

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