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Cyber Security Sectoral Analysis 2024
On Wednesday 16th May, the government published the Cyber Security Sectoral Analysis 2024 providing insights on the size and scale of the UK's cyber security industry. The analysis builds on the 2023 report which was published in April last year.
The Department for Science, Innovation and Technology (DSIT) commissioned Ipsos and Perspectives Economics, with support from glass.ai and the Centre for Secure Information Technologies (CSIT) at Queen's University Belfast, to conduct the review.
This report takes a mythological approach to analyse the sector's performance, using various data sources, including Cyber Exchange - a joint venture between DSIT and techUK that allows cyber security providers to showcase the products and services they provide to market.
The findings reveal that there are 2,091 active cyber security practices in the UK. The vast majority of these are small (24% or micro-sized (55%) businesses, reflecting the broader composition of UK businesses. Over half of these companies (56%) are service providers, 27% are product-focused and 16% are managed service providers (MSPs), with just 1% focused on reselling.
In terms of economic contribution, the UK cyber security sector's annual revenue is estimated at £11,859 million, reflecting an increase of 13% from last year's study. Of this amount, 75% is attributed to large firms, which only make up, 8% of the overall market. In contrast, small firms saw a reduction in revenue from £893 million to £862 million.
The report acknowledges record levels of investment in cyber companies between 2019 and 2021. However, these levels, influenced by broader macroeconomic conditions, saw a decline in 2023, with organisations across all sectors facing challenges in raising investment. In cyber security, there was a decrease of 10% decrease from 2022 figures. This investment was also heavily concentrated in London, with 54% of the share, while other regions such as the South East, North West, East of England, Yorkshire and the Humber and Northern Ireland saw more evenly distributed investments.
The final section of the report reviews recent government investments and support initiatives in the cyber sector. It highlights the work of programmes like the Cyber Exchange, UK Cyber Cluster Collaboration (UKC3), NCSC for Start-ups and the Cyber Runway, which support start ups in raising funds and increasing their profile in the sector.
This section also examines the barriers faced by cyber security businesses in securing talent. The three most common barriers are:
- Competition for candidates within the cyber sector
- Salary demands not affordable
- Candidates lacking technical skills
While the report draws several similar conclusions to previous iterations, its shows that there continue to be a significant number of challenges impacting cyber companies, from large multinationals to SMEs and start-ups.
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Cyber Security Programme
The Cyber Security Programme provides a channel for our industry to engage with commercial and government partners to support growth in this vital sector, which underpins and enables all organisations. The programme brings together industry and government to overcome the joint challenges the sector faces and to pursue key opportunities to ensure the UK remains a leading cyber nation, including on issues such as the developing threat, bridging the skills gap and secure-by-design.
Join techUK's Cyber Security SME Forum
Our new group will keep techUK members updated on the latest news and views from across the Cyber security landscape. The group will also spotlight events and engagement opportunities for members to get involved in.
Original article link: https://www.techuk.org/resource/cyber-security-sectoral-analysis-2024.html
