British private equity and venture capital firm IW Capital Ltd has released its top 16 high-growth industries to watch in 2016, and the UK’s leaps in technological innovation are at the forefront of future growth.

“These industries are innovative, fast-growing and populated by a collection of innovative Small and Medium Enterprises (SMEs) and start-ups,” the report states. “Most significantly, these industries offer significant tax efficient investment opportunities that qualify under current Enterprise Investment Scheme (EIS) regulations. The future of Britain’s economic growth will be fuelled by these industries, and reinforces its global reputation as a nation that fosters innovation.”

The UK’s digital industries are growing 32 per cent faster than the rest of the economy, according to the 2016 Tech Nation report. Its booming fintech (financial technology) sector was marked as a leader by IW Capital, with the UK now outstripping Silicon Valley for fintech investment. App and software development is another major driver, growing by 17 per cent in 2015. App development is predicted to be worth £31bn to the British economy by 2025. Unsurprisingly, in line with these developments, the UK’s cyber-security sector has also seen major growth, thanks to substantial government investment, and is on track to top £2bn in exports this year. Advanced manufacturing, which plays a vital role in developing cost-efficient, knowledge-intensive and environmentally-friendly production across the entire economy is similarly tagged for increasing R&D investment.

Online advances have boosted the growth of both the product-service sharing sector, and the logistics industry. Online shopping has driven demand, with 67 per cent of logistics firms expecting an increase in profits in 2016. Internet-specific companies are also expected to be behind a large proportion of the 3.2 per cent growth in the media industry over the next five years.

Biotechnology is also seen as a major knowledge centre and target for investment, thanks to a combination of innovative use of new technologies and heavy investment in R&D. In 2014 alone, biotech IPOs brought the UK £408 million, an eightfold increase from the year before. “Britain is carving out a name for itself as a world leader behind the US in biotechnology, outperforming the rest of the Europe for the past five years,” the report states.

Tourism, which contributed more than £60bn to the British economy in 2015, and hospitality are also expected to be major areas of growth in coming years, with hospitality SMEs anticipating their operations will grow by 99 per cent in the next five years. Fashion and sport are also expected to benefit from new technology innovations, with property, professional services and recruitment rounding out the top 16 high-growth industries to watch.

The findings align closely with London’s recent campaign branding itself ‘Capital of Cutting-Edge’. The campaign focused on the capital city’s world-leading expertise in the technology, finance, life sciences and creative industries in a bid to attract major conferences, talent, and investment.

Tracy Halliwell MBE, Director of Business Tourism and Major Events at London & Partners, said: “London is at the forefront of rapidly innovating and converging financial, tech, life sciences and creative industries, making it a cutting-edge business event destination.”

(via IW Capital)