UK tech sector falls out of top 10 as emerging superpowers take the lead

The UK has fallen behind in the global tech race, now ranking 13th for tech competitiveness and trailing countries such as Ireland, Singapore and Australia.

A new global index has revealed that not a single G7 nation – which includes the UK as one of the world's most industrialised nations – is in the top 10, signalling a concerning trend for Western economies traditionally viewed as leaders in technology.

The Global STEM competitive index, produced by STEM consultancy SThree and the Centre for Economics and Business Research (Cebr), points to several factors that have hindered the UK's tech stature.

Despite London's status as a top European tech hub, the country's overall position has been compromised by significant underinvestment in crucial sectors, as reported by City AM.

The inability to scale domestic startups and a shortage of tech talent are also impeding the UK's technological advancement.

Tech authority and ex-government advisor Dr Sue Black OBE has called on the UK to "double down on fostering a tech positive culture before it is too late."

She advocates for a nurturing entrepreneurial ecosystem that supports the UK in realising its full potential through a "tech-positive culture, championing investment, and providing long term policy stability."

However, there are still positives. The UK ranks sixth in both high-tech exports and computer science university standings, indicating areas of strength within the sector. Universities such as Oxford, Cambridge and Imperial College London are globally renowned for their exceptional tech research contributions.

The global tech scene, once dominated by the UK and its G7 counterparts, now tells a different story.

Singapore, Australia and Ireland have surged ahead, outperforming the UK and other Western countries in crucial areas like education and investment in future tech.

East Asian economies, notably South Korea, Japan and Singapore, are making significant strides in AI and deep tech, leading the way in AI patent filings.

In contrast, the UK's AI sector has been hindered by funding shortfalls and regulatory uncertainty, with top talent and startups increasingly eyeing the US for better opportunities.

This shift has already had a profound impact. The Wall Street sell-off of major US tech giants, which saw the 'magnificent seven' tech titans lose over $1tr in value due to Chinese AI-bot Deepseek, sent shockwaves through global markets.

The ripple effects were felt by European tech companies like Germany's Infineon Technologies and Japan's SoftBank.

The UK's tech sector, often dependent on US investment and partnerships, has also experienced the pinch.

The UK government has expressed its ambition to position Britain as a global leader in tech and AI. Chancellor Rachel Reeves has pledged to support tech startups and boost private investment in innovation.

However, industry experts caution that policy measures alone may not suffice.

SThree's chief executive, Timo Lehne, highlighted the rankings as a "clear warning sign" for the UK and its fellow G7 countries.

"Once the global epicentre for innovation, these countries are now facing stiff competition from emerging tech hubs. The challenge is no longer just maintaining their position, but ensuring they lead the charge in fostering innovation and nurturing the businesses that will drive the future of global technology."