The number of new technology firms in the UK has dropped following a period of sustained growth, according to new research from tax and consulting firm RSM UK.

In the second quarter of this year, the number of new technology incorporations fell 11 per cent 12,318 from 13,082 in the first quarter of the year.

The decline follows a “record-breaking” year in 2023, when 51,017 technology firms were founded, the highest number in five years.

London accounted for the highest number of incorporations at 6,170 in the second quarter of 2024. However, this fell 16 per cent from the first quarter of the year and represented a decline of one per cent compared to the same period of last year.

Ben Bilsland, partner and head of technology at RSM UK, said that the “tide may be turning” on technology growth in the UK and urged the government to support the UK tech sector so that it could keep up with US companies such as Amazon and Google.

“Whilst on one hand the new government is grappling with a £22 billion budget shortfall, on the other, it can’t afford to take a strong tech sector, that contributes around £150 billion a year to the UK economy for granted,” he added. “With that in mind, and with high interest rates and sticky inflation continuing to present economic challenges, we would encourage government to do all it can to maintain growth in the sector.”

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