The UK Location Market Survey 2020

On Monday the Exec Summary of ConsultingWhere’s Location Market Study landed in my inbox as a reward for my tiny contribution to the study. ConsultingWhere have been producing these studies for 12 years (2008, 2012, 2017 and 2020) and they also have produced foresight reports for the AGI, so they know quite a lot about the UK market. Unlike most sector studies this one is produced by real experts in the domain who have the reach to talk to many of the leading figures in our sector and the understanding to interpret and identify trends.

The report provides an estimate of the size of the UK Location products and services market both from supply and demand sides, it covers revenue, employment, fast growth companies, sectoral changes and key trends. So what are the key takeaways from the executive summary (I am looking forward to reading the full report)?

  • The UK market is defined as “Any endeavour where substantive use is made of location information to the benefit of citizens, good governance and commerce.” based on the AGI definition.
  • Scientific change is bring geo into the mainstream, particular emphasis is placed on the reduced cost of building and launching satellites for earth observation and the challenges of processing the massive streams of data that they produce. Note is also made of the greater capacity of the next generation of UAV’s with larger payloads and longer flying times (effectively near earth satellites).
  • There is of course also mention of AI and the impact of smart phones, although I feel we have been talking about these for longer and their impact is already understood.

So how big is the UK Location Market?

“Our analysis of these organisations has led us to assess the UK market size in the calendar year 2019 at £2,080 Million (+/- 5%). This represents a Compound Annual Growth Rate of 12% against the previous analysis in mid-2017.

Dominance of the supply-side market by a small number of large players continues. The top ten companies, in terms of attributable turnover, account for 45% of the market and the top 50 account for 68%.”

UK Location Market Study, ConsultingWhere

That’s a lot bigger than I thought, what is particularly interesting to me is that some of the 40 companies just outside the top 10 who represent 23% or £480m of the market should have enormous potential to grow (HINT to these 40 companies : you should talk to me about growth strategies for your geospatial business).

This is a buoyant market despite its dependence on the UK public sector, with most of the growth coming in the private sector.

“The largest commercial organisations have all shown sustained growth since our last survey in 2017, of over 10% CAGR.”

UK Location Market Study, ConsultingWhere

The big 4 public sector providers of Location products (Ordnance Survey, HM Land Registry, UK Hydrographic Office and Registers of Scotland) represent over 15% of the market but they have only shown growth of 2.75% pa.

An interesting new element of this survey is the assessment of the number of people working in the industry and the number of people using the products and services.

“Our estimate is that approximately 12,000 Full Time Equivalent (FTE) staff are employed in the supply of location products and services by the organisations covered by the survey. In addition, there are between 60,000 and 80,000 Full Time Equivalent (FTE) staff employed in the UK using the location products and services in the business, public and third sector.”

UK Location Market Study, ConsultingWhere

The study includes an assessment of the growth prospects for the main sectors where location products and services are used. Somewhat predictably Government is flat to declining, while Defence & Intelligence is seen as a growth opportunity, as are Telco, Energy, and Financial Services. Perhaps more surprising (or at least bucking recent trends) Design & Construction, Environment and Agriculture, Forestry and Fishing are predicted to have good growth. Inevitably Retail is seen as a declining sector which is hardly surprising given the growth of online retail.

“Our overall view on the future growth of the market over the next three years is that it is likely to continue to show a strong upward trend but this has to be tempered by caution over the global economic outlook and also the strength of the UK economy post-Brexit.”

UK Location Market Study, ConsultingWhere

It feels like a good time to be working in the Location sector.

You can download the Executive Summary of the Location Market Survey here

If you want to jump right in and get hold of the full report covering 900 companies, 20 vertical sectors with over 50 charts and 1,000 hours of analysis then ask ConsultingWhere.

Andy Coote, who heads up ConsultingWhere, is an old mate of mine and we caught up for a brief chat about the survey.

SF: “I’m curious about the top 10 vs top 50 suppliers, are there any surprises there? Can you share an excerpt?”

AC: “This is part of the value of buying the report. Suffice to say the usual suspects such as Google, Garmin, Hexagon and Esri (UK) are all in the top 10 but there are certainly some interesting new entrants in Top 50.”

SF: “The People stats are impressive and really useful, how did you generate them?”

AC: “This was an interesting exercise and “triangulated” as economists say, from a number of independent sources, both UK and global studies.”

SF: “Are you including all of the HMLR turnover in your calls? That might be a bit misleading. I guess separating out geospatial turnover can be difficult for many organisations except those that are solely geospatial?”

AC: “No, not all of the revenues included in calculating GI numbers, nor with RoS. From annual reports you can make a number of inferences, combined with some judicious enquiries, we arrived at a percentage GI estimate and that’s what’s included in the report.”

SF: “How do you derive UK revenues of multinationals like Google and Hexagon?”

AC: “Annual reports and investor calls research are quite revealing.  Also, some interesting “off the record” remarks from those who would have been at insider meetings.”

SF: “The sector growth table is interesting, how does it compare to a few years ago? It seems that Central Govt and Defence are always going to be the biggest sectors and the Finance and Insurance is always about to experience big growth (I agree) Health remains the “if only” sector but some of us have been saying that for nearly 2 decades!”

AC: “Yes, these two sectors have always been large – this reflects to some extent overall Government spending.  There’s a great article on Defence and intelligence in main report – it is very informative by pointing to reviews and summarising stuff reported in publicly available materials that only the cognoscenti could interpret. The other sectors are from the opinion survey, which we got a good response on. The standard deviation was small enough on those highlighted to give us some confidence that they are representative. However, there is IMHO a huge question mark over UK economic performance going forward and trade war between China and US still has a long way to run.”

SF: “Great work Andy (and your team), I remember sitting with you in my office at MapInfo, talking about the first survey back in 2007/8, quite a journey for us and the industry since then. What do you see as the challenges for the future?”

AC: “The journey the industry has come on is quite remarkable in many ways. 

However, there are some big challenges ahead, for example we observed the importance of having a proper debate on location privacy in the 2010 AGI Foresight report. Now Apple advertising is leading on location data being something that should be private – watch this

How will this play out? what’s going to be the effect on selling of anonymised (by what rules?) mobile phone data and social media data products? I think this will be big for our sector in the next few years.”

SF: Thanks Andy, I look forward to seeing how this plays out and what impact it will have on the Location Market in your next survey in 3 or 4 years.