The number of new tech companies being set up in the UK rose by almost 60 per cent in 2017 according to new analysis by RSM.
In total, there were 10,016 software development and programming businesses incorporated in 2017, a 59 per cent increase on the 6,300 companies set up in 2016.
The data from Companies House also revealed growth in tech company incorporations across every region in the UK.
London recorded the highest number of annual incorporations at 4,238, a jump of 76 per cent. This was followed by the South East on 1,296, a 40 per cent rise while the North West recorded 707 new tech firms, 29 per cent up on the previous year.
The figures validate the Chancellor’s recent claim during the Spring Statement speech that a new tech firm is set up in the UK every hour.
Commenting on the figures, David Blacher, head of RSM’s technology, media and telecoms team said: ‘These figures show very clearly that despite the fears of a post-referendum slowdown, the UK tech sector is incredibly vibrant and growing at a remarkable rate.
‘There are a number of reasons for this. The UK’s universities are playing a key role in developing and nurturing exceptional talent. The country - and London particularly - is also continuing to attract the world’s brightest and best.
‘Entrepreneurs are able to gain good access to finance, either through traditional sources of debt at relatively cheap rates, or from venture capitalists and private equity funds.
'The UK’s tax regime is also proving to be an incredibly powerful tool in encouraging tech businesses, who take advantage of legitimate tax saving and incentive programmes. These include the Enterprise Investment Scheme, Research & Development tax credits, video games tax relief and the Patent Box regime.
‘There is undoubtedly the political will to build momentum and generate further growth as part of the government’s overall industrial strategy. However, there are some clouds on the horizon. While many in the sector will be cheered by the news that EU nationals will continue to be able to come and work in the UK during the transition period, the longer term position is as yet unclear.
‘As interest rates starts to rise, we may also see a shift away from venture capital and private equity as investors seek returns from safer investments. For now though, the funding environment is incredibly benign.’
The data analysed by RSM covers four SIC classification codes – publisher of computer games, other software publishing, ready-made interactive leisure and entertainment software development, and business and domestic software development.