UK tech growth lagging

However UK business spend on tech is above EU average

The UK technology sector grew by a paltry 0.84 per cent in 2010, compared with annual global growth of 3.3 per cent.

According to analyst firm IDATE's latest DigiWorld Yearbook, the UK is falling behind the likes of France and Germany, which saw growth rates of about two per cent last year.

Despite its lacklustre growth, the UK's tech sector is still one of Europe's biggest in terms of sales, with an average revenue per capita of £1,800.

This compares with average revenue per capita of £1,086 in Spain and £1,721 in Germany.

Business spend in the UK is the main contributor representing 45 per cent of total spend, compared with with a 38 per cent average in the rest of Europe.

"We can see from this year's figures that growth in the UK is moderate and underperforming compared with European and global peers," said Yves Gassot, CEO, IDATE.

"However, we shouldn't underestimate the resilience of the UK technology market and it is encouraging to see that business spending on technology was robust during 2010," he added.

The DigiWorld Yearbook also notes that although the internet sector as a whole – including access, software and content – currently accounts for eight per cent of the ICT services market in Europe and the US, this has potential to increase to 20 per cent in the medium term.

Total spend on digital technology and services reached £2,429bn in 2010.