The UK cyber sector has seen rapid growth as AI drives new demand
The UK cyber sector has seen rapid growth as AI drives new demand
Publish Date: 2026-05-15 06:49:00
Source Domain: www.openaccessgovernment.org
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The UK’s cyber security industry is continuing to expand, with new government analysis showing strong growth in company numbers, employment and economic contribution across the sector
The latest sectoral analysis from the Department for Science, Innovation and Technology shows how cybersecurity has become an increasingly important part of the UK economy as businesses and public services face rising digital threats.
According to the report, the UK now has 2,603 active cybersecurity firms, a 20% increase from the previous year.
The sector currently generates £14.7 billion in annual revenue and contributes around £9.1 billion to Gross Value Added. Employment has also risen, with nearly 70,000 people now working in cybersecurity-related roles across the country.
The analysis shows that smaller companies are still a strong part of the industry. Around 58% of firms are classified as micro businesses, while 19% are small enterprises.
The sector also contains a higher proportion of medium and large firms than the wider UK business population, demonstrating the market’s growing maturity.
Researchers found that more than two-thirds of cyber firms are dedicated solely to cybersecurity products and services. Many larger organisations, including consultancies and telecoms providers, are diversifying into cyber security as customer demand grows.
Service-led businesses continue to dominate the sector, with most companies focused on managed services, consulting and threat monitoring. Product development is also increasing, reflecting growing demand for specialist software and security technologies.
AI is becoming a major growth area
Artificial intelligence is becoming one of the biggest influences on the cybersecurity sector. The report shows growing activity among firms focused on securing AI systems as well as businesses using AI tools to identify vulnerabilities and improve threat detection.
The government believes the UK is well placed to benefit from this trend due to its strengths in research, cyber expertise and technology innovation. Programmes supporting start-ups and university spinouts are helping more firms bring new cyber technologies to market.
Investment activity also remains significant. During 2025, dedicated cyber security firms secured £184 million across 47 investment deals, underlining continued investor confidence despite wider economic uncertainty.
The government focuses on cyber resilience
The report shows growing public sector investment in cyber resilience as cyber threats become more sophisticated. Government initiatives, including the Cyber Security and Resilience Bill and the Government Cyber Action Plan, are expected to increase security standards across critical infrastructure and supply chains.
Researchers say demand for cyber services is also being fuelled by broader technological change, including cloud computing, connected devices, and industrial control systems that require stronger protection measures.
The findings suggest the UK cyber security industry remains in a strong growth phase, supported by increasing digital dependence across both the public and private sectors. While the report notes that measuring the sector remains complex due to its fast-changing nature, the overall picture suggests a market expanding in both scale and capability.
