IT Outsourcing in the UK

IT outsourcing in the UK is experiencing significant growth. It has become a cornerstone of the nation’s technology landscape. With a robust economy and an increasing reliance on digital solutions, UK businesses are turning to IT outsourcing. It is a strategic way to enhance efficiency, reduce costs, and leverage global talent. As the market for IT outsourcing is projected to expand steadily, the UK’s dynamic tech ecosystem positions the country as a leading destination for IT services. This growth is further fueled by advancements in digital technologies.

The United Kingdom as an Economy

The United Kingdom has a $3.4 trillion GDP (2023) and nearly 70 million residents. It the sixth-largest economy in the world. The country enjoys a high quality of life, and its economy is highly diversified. The main contributors to the UK’s GDP are services, manufacturing, construction, and tourism.

According to the Office for National Statistics (ONS), the services sector is the largest. It accounts for 80% of the country’s gross value added (GVA), similar to GDP. This sector includes industries such as finance, business services, retail, food and beverage, and entertainment. Manufacturing and construction make up 10% and 6% of the economic output, while agriculture contributes about 0.7%. Additionally, tourism is a significant revenue source for the UK, with international visitors spending $34.3 billion on travel and tourism in 2022.¹

The economy of the UK at a glance

	Gross Domestic Product
Annual GDP		USD 3.4 Trillion (2023)
GDP Per Capita		USD 49,464 (2023)
Income Category		High Income (2025)
	People
Population		70 Million (2025)
Literacy Rate		99% (2024)
	IT Sector
IT Services Market Size		USD 112.5 Billion (2025)
IT Outsourcing Market Size		USD 44.5 Billion (2025)
Registered Software Companies		125,000+ (2023)
	Business Environment
Ease of Doing Business		Score: 83.5 | Rank: 8 (2020)
Political Stability Indicator		Percentile Rank: 62.1 (2023)
Corruption Perceptions Index		Score: 71/100 | Rank: 20/180 (2023)

The Software Development and IT Outsourcing in the UK

The IT outsourcing market in the UK is set to grow from USD 112.5 billion in 2025 to USD 156.61 billion by 2030, with a compound annual growth rate (CAGR) of 6.84%. This growth is driven by the following:

• Rise in the adoption of internet-based applications and services
• Increased availability of wireless devices like smartphones and smart gadgets

The SaaS (software-as-a-service) industry in the UK will also experience significant growth between 2020 and 2025. The market value is expected to increase from EUR 7,500 million to EUR 14,500 million by 2025, creating ample opportunities for market expansion.²

IT Outsourcing Market in the UK

IT outsourcing in the UK is set for significant growth. Revenue is expected to reach $44.4 billion by 2025. From 2025 to 2029, the market will grow at a steady annual rate of 9.16%, reaching $63.04 billion by 2029. The average spend per employee in the sector will be $1,270 in 2025, reflecting the substantial investments companies are making in IT outsourcing.³ In 2023, the UK imported ICT-related services worth £15.4 billion from around the world.⁴

Domestic outsourcing is preferred over nearshore or overseas outsourcing. This is due to factors like proximity, shared language, cultural similarities, and minimal time zone differences. For example, Infinity Group, a leading UK IT outsourcing provider, supports over 1,000 UK businesses, including start-ups, SMEs, and large corporations.

Key technology trends in nearshore IT services include the increasing use of 5G technology, IT automation, containerization, serverless computing, and virtual desktop infrastructure. In the coming years, 5G will drive the digital economy, impacting areas like personalized medicine, precision agriculture, smart energy grids, and connected mobility.

The demand for IT outsourcing services in Europe, including the UK, is growing rapidly. This rise is driven by advances in digital technologies, a talent shortage, and the need for cost-effective solutions.⁵

Top Software Development and IT Employers in the UK

We have compiled a list of the top companies that employ the most IT professionals in the United Kingdom. By analyzing publicly available data, we ranked the top firms based on their employee count in the UK. While the focus is on employee numbers, it’s important to note that some highly regarded companies may not appear on this list or rank lower due to having fewer employees.

Software and IT Industry Associations in the UK

The UK’s tech ecosystem thrives thanks to its software developers, IT service providers, and digital innovators, which also support IT outsourcing in the UK. Key trade associations and membership organizations play a central role in this vibrant sector, advocating for businesses and promoting collaboration. Few of the prominent organizations are briefly discussed below.

Business Application Software Developers Association (BASDA)

BASDA is a trade body that advocates for UK business software development organizations. It works through collaboration and representation. It ensures its members’ voices are heard by government officials, policymakers, and industry media at the highest levels.

techUK

techUK is a trade association that brings together individuals, businesses, and organizations to harness the benefits of digital technology. The organization represents over 1,000 members, mostly SMEs across the UK. It promotes innovation and collaboration between businesses, government, and stakeholders. Additionally, techUK helps its members navigate a evolving tech landscape, by providing expertise and insights. Consequently, driving positive outcomes for society, the economy, and the environment.

United Kingdom IT Association (UKITA)

UKITA, is a non-profit membership organization and trade association that represents small and medium enterprises (SMEs) in the UK’s tech sectors. It fosters growth in IT outsourcing across the UK. Founded in 2002, UKITA supports businesses with fewer than 250 employees, which make up over 95% of the sector and employ nearly 75% of its workforce. Run by experienced tech professionals, UKITA advocates for SME growth through digital business technology and maintains strong partnerships with the public sector.

Reputed Institutions for higher education in IT in the UK

Here is a list of the top universities in the United Kingdom for Computer Science, ranked based on their research performance. The rankings are derived from a graph analyzing 72.9 million citations from 2.43 million academic papers produced by 150 UK universities. These publication ratings were adjusted for release dates and factored into final scores.⁷

Please note that the alumni in engineering roles may include other engineering domains other than computer science or software engineering since we have taken the filtered count from their LinkedIn pages.

Conclusion

The UK with a diverse and high-income economy, excels in services, manufacturing, and IT sectors. Its thriving tech ecosystem, backed by respected institutions and trade associations, highlights its leadership in digital advancements. As a result, the UK is a hub for global collaboration and progress.

If you’re looking to outsource in the UK and tap into its thriving IT sector, let us help you connect with the best companies through Enosis Outsourcing. Contact us today to learn more and explore the opportunities the UK has to offer!

References

[1] Home-Office for National Statistics ↩

[2] United Kingdom IT Services Market Size & Share Analysis-Industry Research Report-Growth Trends ↩

[3] IT Outsourcing-United Kingdom | Statista Market Forecast ↩

[4] UK service trade imports by type 2023 | Statista ↩

[5] What is the demand for IT Outsourcing Services on the European market? | CBI ↩

[6] 100+ Best Computer Science universities in UK [Rankings] ↩