UK cyber security sector revenue up 12% to £13 billion while the UK economy was flatlining

1. Significant growth in the number of cyber security firms

The UK has seen a substantial increase in the number of active cyber security firms, reflecting the sector's fast expansion. This growth indicates a robust and reliable industry landscape, catering to an increasing concern for cyber security.

 

2. Diverse range of products and services

UK cyber security firms offer a broad spectrum of products and services. Information Risk Assessment & Management and Cyber Professional Services are among the most commonly provided offerings, each accounting for 80% of registered cyber firms. This diversity underscores the sector's capability to address various security challenges.​

 

3. Regional distribution of firms

While London remains a central hub, with 38% of firms, there is a notable distribution across other regions:​

• 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%​

This distribution highlights the sector's nationwide presence and the growing importance of cyber security nationwide.

 

4. Economic contributions

The cyber security sector has made significant economic contributions.

• Revenue: Large firms generate £9.3 billion, accounting for 70% of the total revenue. Medium-sized firms have increased their share from 16% to 21%, now contributing £2.8 billion.​
• Employment: The sector has seen a notable increase in employment.

 

5. Investment trends

Investment in the cyber security sector has experienced fluctuations:​

• 2024 Investment levels: While challenging compared to previous years, the investment landscape mirrors 2018/19 levels, suggesting a return to normality rather than a decline in investor confidence.​
• Regional investment: Notably, 49% of investments were raised outside London and the South East, marking an increase from previous years and indicating a broader geographic appeal.​

 

6. International acquisitions

The sector has attracted international attention, particularly from US investors. This trend highlights the quality and attractiveness of UK cyber security firms, though it raises considerations about maintaining sovereign capabilities in critical technology areas.​

 

7. Government initiatives and support

The UK government has implemented several initiatives to reinforce the sector:​

• Public procurement: Government spending on cyber security contracts increased from £262 million in 2019 to £931 million in 2024, enhancing public sector engagement with innovative start-ups.​
• Support programmes: Initiatives like the Cyber Runway programme have been launched to support the growth of cyber security firms, reflecting a commitment to nurturing the sector.​

 

8. Emerging market trends

The report identifies several emerging trends:​

• Artificial Intelligence (AI): There is a growing focus on cyber security for AI systems, with 66 firms active in this niche, highlighting the sector's adaptability to technological advancements.​
• Supply chain security: Emphasis on securing supply chains has increased, reflecting a proactive approach to comprehensive security.​

 

9. Challenges and opportunities

Despite growth, the sector faces challenges:​

• Skills gap: There is a recognised need to address the shortage of cyber security professionals to sustain growth and innovation.​47% Cyber Security businesses reported a lack of candidates with right the cyber security skills is holding them back.
• Global competition: UK firms must navigate a competitive global market, emphasising the need for continuous innovation and quality to maintain a leading position.​

 

10. Future outlook

The sector is poised for continued growth, driven by increasing demand for cyber security solutions and supportive government policies. However, addressing challenges such as the skills gap and ensuring equitable growth across regions will be crucial for sustaining this momentum.​

In conclusion, the UK Cyber Security Sectoral Analysis 2025 report paints an optimistic picture of a thriving sector that significantly contributes to the economy. With strategic investments, supportive policies, and a focus on innovation, the UK is well-positioned to enhance its cyber security landscape, ensuring resilience and protection in an increasingly digital world.