UK’s cyber sector’s contribution to economy reaches new heights
Government publishes new Cyber Security Sectoral Analysis 2025 report.
Yesterday, the Department for Science, Innovation and Technology (DSIT) released its latest report containing information about the UK cyber security sector, including the number of businesses, the sector’s contribution to the UK economy, the number of people employed and the products and services offered by these firms.
The report was published alongside the Secretary of State, Peter Kyle MP’s, speech delivered at techUK’s annual Tech Policy Conference - where he outlined the potential of technology as a force for good in working people’s lives and declared that there is ‘no route to long-term growth and no solution to our productivity problem, without innovation’. techUK believes that innovation in cyber security is crucial, not just when it comes to protecting our critical national infrastructure and public service, but in enabling the opportunities presented by emerging technologies. Therefore, as cyber security’s role becomes more and more central, the growth of the UK’s vibrant cyber sector continues to be of importance.
The analysis, undertaken by Ipsos and Perspective Economics, builds upon the previous Cyber Security Sectoral Analysis published in May 2024 that provides a recent estimate of the size and scale of the UK’s cyber security industry. A methodological approach (consistent with previous reports) is taken to analyse the sector's performance, which includes desk research; initial data collection and gap analysis; a cyber security sectoral survey; qualitative consultations with investors in the cyber security sector; data blending; and data analysis and reporting. Data sources underpinning the sectoral analysis included the Cyber Exchange.
Key findings from the report
The news is positive, with the UK cyber sector continuing to be a high performer. The top take aways are:
The UK cyber security sector generated revenue of £13.2 billion, up 12% since last year.
There are 74 new cyber security firms, bringing the total to 2,165, up 3.5% from 2,091 last year.
The sector employs 67,300 people (full time equivalents), up 11% since last year, an increase of around 6,600 jobs.
The total gross value added (GVA) for the sector has reached c. £7.8 billion, an increase of 21% since last year.
GVA per employee has increased from £106,300 to £116,200, an increase of 8%.
In terms of investment, £206 million was raised across 59 deals within dedicated cyber security firms in 2024.
A useful snapshot of the cyber security sector
In addition to the key findings noted above, the report includes information about the size of the UK’s cyber security firms (with 56% micro, 18% small, 16% medium and 10% large) with the data highlighting an increase in the number of medium-sized firms, likely driven through a combination of organic growth and increased merger and acquisition activity. The report also explores the percentage of ‘dedicated’ providers of cyber security services (68%), compared to the percentage of firms that provide cyber security as one product or service among others – ‘diversified’ (38%); and takes a high-level look at the products and services being offered by the sector – setting out taxonomy categories, of which Information Risk Assessment & Management and Cyber Professional Services had the greatest number of registered cyber firms offering (80% respectively).
The report notes that just under half (45%) of cyber security firms are based outside of London and the South East regions, breaking down the percentage of offices across 12 regions, with no significant proportional changes at the regional level suggested:
London – 38%
South East - 17%
North West – 8%
South West – 8%
East of England – 7%
Scotland – 6%
West Midlands – 5%
Yorkshire & The Humber – 4%
East Midlands – 3%
Wales – 2%
North East – 2%
Northern Ireland – 2%
In terms of total cyber security revenue by size of firm, the earning power of large firms is clear with the report estimating that £9.3 billion, or 70%, of all UK cyber security revenue is earned by them. Meanwhile, medium firm revenues had increased their revenue share in relative and absolute terms from 16% to 21% (£1.9 billion to £2.8bn); small firms have continued to see a slight reduction in revenues over the same period (£862m to £790m) which is likely down to market consolidation with mergers; and micro firms have increased revenue levels (from £262m to £394m).
The report also looks at investment in the UK cyber security sector, focusing on investment activity within the full year of 2024 (1st January – 31st December), and typically explores investment raised by dedicated cyber security firms. The investment timeline demonstrates that 2024 has remained challenging for cyber security investment compared to previous years. However, it is noted that the UK cyber security investment landscape is broadly similar to 2018/19 levels, which may reflect a ‘return to normal’, rather than a significant loss of investor confidence or engagement; furthermore, there is investment activity in the UK market beyond Venture Capital – for example, mergers, acquisitions, loan and equity funding.
And there is an optimistic picture from a regional perspective with 49% of the investment raised across the ten regions outside of London and South East. This is a higher proportion than seen in 2023 (35%), 2022 (25%), and much higher than the 9% in 2021.
Also of note, the data gathered highlights a range of international acquisitions of UK cyber security firms, particularly by US investors, demonstrates the quality and attractiveness of the UK cyber sector and the report states that this raises important considerations for long-term market development, such as the need to support early-stage firms at the start of the growth pipeline and the delivery of infrastructure to help UK firms scale domestically and secure capital. Furthermore, it recognises the importance of this given the strategic nature of cyber security capability and the need to maintain sovereign capacity in key technology areas – and the consequent need for policy to help strengthen domestic growth pathways while maintaining the benefits of attracting international investment, collaboration, and market access.
Matt Evans, techUK’s COO and Director of Markets commented:
“This year’s Cyber Security Sectoral Analysis report provides a welcome boost in confidence for the future growth of the UK’s cyber security industry – indeed, it’s fantastic to see the evidence of this thriving sector as it achieves significant growth in revenue, productivity and employment.
While the figures paint a largely positive picture, it’s important to remember that this must be measured against the backdrop of an increasing and ever-evolving threat landscape, geopolitical tensions and the need for continued and appropriate cyber workforce development. It is, therefore, crucial to maintain and further nurture the growth of the cyber security sector in order to meet those challenges and to enable the growth and resilience of the rest of the digital economy, as well as critical businesses and services. techUK looks forward to supporting this effort, including through the important work of the Cyber Growth Partnership.”
Alongside the Cyber Security Sectoral Analysis 2025, DSIT also published an AI and software cyber security market analysis, to support government’s ongoing efforts to secure digital technologies, specifically software and AI, through identifying companies which offer crucial and relevant services.
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Jill Broom
Head of Cyber Resilience, techUK
Jill Broom
Head of Cyber Resilience, techUK
Jill leads the techUK Cyber Security programme, having originally joined techUK in October 2020 as a Programme Manager for the Cyber and Central Government programmes. She is responsible for managing techUK's work across the cyber security ecosystem, bringing industry together with key stakeholders across the public and private sectors. Jill also provides the industry secretariat for the Cyber Growth Partnership, the industry and government conduit for supporting the growth of the sector. A key focus of her work is to strengthen the public–private partnership across cyber to support further development of UK cyber security and resilience policy.
Before joining techUK, Jill worked as a Senior Caseworker for an MP, advocating for local communities, businesses and individuals, so she is particularly committed to techUK’s vision of harnessing the power of technology to improve people’s lives. Jill is also an experienced editorial professional and has delivered copyediting and writing services for public-body and SME clients as well as publishers.
Annie is the Programme Manager for Cyber Resilience at techUK. She first joined as the Programme Manager for Cyber Security and Central Government in September 2023.
In her role, Annie supports the Cyber Security SME Forum, engaging regularly with key government and industry stakeholders to advance the growth and development of SMEs in the cyber sector. Annie also coordinates events, engages with policy makers and represents techUK at a number of cyber security events.
Before joining techUK, Annie was an Account Manager at a specialist healthcare agency, where she provided public affairs support to a wide range of medical technology clients. She also gained experience as an intern in both an MP’s constituency office and with the Association of Independent Professionals and the Self-Employed. Annie holds a degree in International Relations from Nottingham Trent University.
Programme Marketing Assistant for Public Sector Markets, techUK
Tracy Modha
Programme Marketing Assistant for Public Sector Markets, techUK
Tracy supports the marketing of several areas at techUK, including Cyber Exchange, Central Government, Cyber Resilience, Defence, Education, Health and Social Care, Justice and Emergency Services, Local Public Services, Nations and Regions and National Security.
Tracy joined techUK in March 2022, having worked in the education sector for 19 years, covering administration, research project support, IT support and event/training support. My most outstanding achievement has been running three very successful international conferences and over 300 training courses booked all over the globe!
Tracy has a great interest in tech. Gaming and computing have been a big part of her life, and now electric cars are an exciting look at the future. She has warmed to Alexa, even though it can sometimes be sassy!
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Jill leads the techUK Cyber Security programme, having originally joined techUK in October 2020 as a Programme Manager for the Cyber and Central Government programmes. She is responsible for managing techUK's work across the cyber security ecosystem, bringing industry together with key stakeholders across the public and private sectors. Jill also provides the industry secretariat for the Cyber Growth Partnership, the industry and government conduit for supporting the growth of the sector. A key focus of her work is to strengthen the public–private partnership across cyber to support further development of UK cyber security and resilience policy.
Before joining techUK, Jill worked as a Senior Caseworker for an MP, advocating for local communities, businesses and individuals, so she is particularly committed to techUK’s vision of harnessing the power of technology to improve people’s lives. Jill is also an experienced editorial professional and has delivered copyediting and writing services for public-body and SME clients as well as publishers.
Annie is the Programme Manager for Cyber Resilience at techUK. She first joined as the Programme Manager for Cyber Security and Central Government in September 2023.
In her role, Annie supports the Cyber Security SME Forum, engaging regularly with key government and industry stakeholders to advance the growth and development of SMEs in the cyber sector. Annie also coordinates events, engages with policy makers and represents techUK at a number of cyber security events.
Before joining techUK, Annie was an Account Manager at a specialist healthcare agency, where she provided public affairs support to a wide range of medical technology clients. She also gained experience as an intern in both an MP’s constituency office and with the Association of Independent Professionals and the Self-Employed. Annie holds a degree in International Relations from Nottingham Trent University.
Programme Marketing Assistant for Public Sector Markets, techUK
Tracy supports the marketing of several areas at techUK, including Cyber Exchange, Central Government, Cyber Resilience, Defence, Education, Health and Social Care, Justice and Emergency Services, Local Public Services, Nations and Regions and National Security.
Tracy joined techUK in March 2022, having worked in the education sector for 19 years, covering administration, research project support, IT support and event/training support. My most outstanding achievement has been running three very successful international conferences and over 300 training courses booked all over the globe!
Tracy has a great interest in tech. Gaming and computing have been a big part of her life, and now electric cars are an exciting look at the future. She has warmed to Alexa, even though it can sometimes be sassy!
