UK’s Immersive Tech Economy to top £1bn in 2018

The results from the first Immersive Economy in the UK Report reveal that virtual, augmented and mixed reality technologies are an economic force with 1,000 companies across the UK on target to turnover more than £1 billion in sales by the end of the year.

The convergence of digital tools, devices and platforms has led to exciting new markets and opportunities, including immersive media and the ability to create new experiences for users with augmented or enhanced environments.

The report, commissioned by Immerse UK, also explores the UK’s position as a world leader in immersive technology, quantifying the fast-growing export-focused industry that is rapidly developing around these technologies and the experiences they can deliver.

Key Findings

Immersive is already an economic reality in the UK

There are around 1,000 specialist immersive companies in the UK employing around 4,500 people and generating £660 million in sales, potentially representing as much as 9% of the global market share. If UK specialists grow in line with market forecasts, they stand to generate over £1 billion in sales in 2018. It’s estimated that half a million people work in companies with some participation in the immersive economy.

Immersive is a young, growing, confident and export-intensive sector

Half of immersive specialist businesses in our data were incorporated since 2012, when the ‘immersive boom’ truly began. Six out of 10 immersive specialists grew their turnover in the last 12 months, and 90% were confident about their future prospects. 70% of those we surveyed are exporting immersive-related products and services, with a particular focus on US markets.

Immersive companies provide value in the creative industries and beyond

Although 80% of the companies we surveyed operate in creative and digital markets, two-thirds mentioned other markets, ranging from education and training to architecture, advanced manufacturing and energy. Immersive technology produces a variety of benefits for its adopters, from increased competitiveness through innovative products to improvements in process and more visibility in the market.

Concentrated in London, but there are hotspots across the UK

38% of immersive companies are to be found in London, mirroring the picture across the digital and creative industries. Other locations across the UK have substantial numbers of immersive companies, including Brighton, Bristol, Newcastle, Liverpool, Manchester, Cambridge, Oxford and Edinburgh. Access to infrastructure and technological expertise are important drivers of success everywhere in the UK, while skills shortages are the biggest challenge for the sector.

A young  sector suffering from fragmented technology and skills supply

More than 80% of the companies surveyed identified issues with the technology ecosystem such as lack of device penetration and fragmented standards. More than two-thirds worried about access to skills and 60% of immersive specialists identified access to finance as a barrier. Immersive specialists tended to be stronger and more successful users of finance sources related to technology and startups, such as equity, accelerators and co-working spaces. In contrast, they relied less on loans, possibly due to their reliance on intangible assets and a lack of sectoral expertise among banks.

Rapid expansion in public support for R&D in immersive technologies

253 immersive technology projects worth a total of £160 million were identified in UK Research Councils, Innovate UK and EU Horizon 2020 open datasets. The funding devoted to immersive technology projects was nine times higher in 2016-2017 than in 2009-2010. Three in 10 immersive specialists benefited from tax incentives in the last 12 months, and two in 10 received some sort of national grant.

This report was commissioned from the innovation foundation Nesta by Immerse UK with funding from Innovate UK. Immerse UK is a special interest group for immersive technologies set up in 2016 by Innovate UK’s Knowledge Transfer Network. It brings together 1,700 leading businesses, researchers, activists, thinkers and investors, to position the UK as a global leader in immersive technology.

Download the full Immersive Economy in the UK Report (PDF)

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By |2018-06-27T16:20:53+00:00June 27th, 2018|Creative Technology|0 Comments