However, European Startups also found that the top 10% of companies represent 80% of value but created less than 50% of jobs. 73% of European tech jobs are generated by 4,900+ startups, meaning that younger companies appear to be more resilient and agile hirers in the chaotic world of COVID-19.

Why is this important?

Despite a saving grace in the extension of the Job Retention Scheme, unemployment, redundancy, and general financial insecurity are feared by many as we enter a renewed period of economic uncertainty. News that the tech market continues to grow, and rapidly at that, is a positive sign.

Young companies are creating jobs at a rate of 10% year on year, ahead of the construction, real estate, and information and communications sectors

Startups are generating more opportunities than their big-tech competitors in terms of active job prospects. Ultimately this means they are more likely to secure top talent, scaling their business as well as their product/ service reach. By 2025 it is estimated that startups will have created 3.2M jobs in Europe, up from 2M in 2020 and 1.5% in 2016.

The continued European-wide investment toward startup companies paints an optimistic picture in terms of the tech jobs market. European Venture capital seems relatively unaffected by the onset of the pandemic, remaining at €10.2B in Q3 of 2020 in contrast to the height of €11.2B in Q2 of 2019.

Whilst the UK has a decreased its Venture Capital Investment by 11% compared to 2019, the UK is the third most decisive country by COVID-19 response, behind France and Germany. The UK is offering £1.25B for Co-investing and direct loans through the British Business Bank, Innovation UK Fund and Enterprise Investment Scheme which means that £0.5M is available per 2,700+ startups (with less than €1M funding).

Furthermore, there are now 205 European unicorns, a rise of 40 since 2018. What’s important to note is that the founders of these businesses, as well as early employees, have fuelled the next generation of tech companies, thus sparking a “snowball effect” within the industry and creating increased relative growth.

Examples include Skype in fuelling Transferwise, Atomico, Passion Capital, Starship Technologies. And, GoCardless in fuelling Nested, Monzo, Starling, and Duffel.

The emphasis on supporting the Tech industry from a government perspective and increased investment appears to have had an impact; Consultancy firm KPMG’s quarterly survey recorded “sharp” growth within the UK Tech sector which saw a strong bounce-back during Q3 of 2020.

These figures are more in line with the figures recorded pre-lockdown and show the sharpest growth the country has seen since Q1 2019. The headline index reached 53.3 in Q3 in comparison to just 31.8 in Q2 (50.0 being the benchmark between growth and decline).

The Tech sector has proven to be resilient, even heralded as a saviour of certain industries, which in the move to digital solutions, workarounds and alternatives, has enabled the continuation of business which would have ordinarily suffered as a result of lockdown restrictions.

As we move into a second national lockdown, what lessons can be learnt from our previous experiences? And, will we continue to see upward trends in growth within the Tech sector during the last quarter of 2020?

After analysing the data, we are confident that Tech startups will play a critical role in supporting the economy, remaining a key provider of job opportunities within a market that rewards innovative solutions, flexibility, and entrepreneurship.