UK Cybersecurity Economics: Revenue Is Growing Much Faster Than Employment

The most revealing number in Britain's 2026 cybersecurity report may not be the sector's £14.7 billion of revenue. It is the gap between output growth and hiring. Revenue increased 11%, GVA increased 17%, but sector employment rose only 3%.

That pattern suggests a market becoming more productive, more software-heavy, or both. It also cautions against using headcount as the only measure of company scale.

Revenue per worker is rising

The government-backed sector analysis estimates GVA per employee at £131,200, up from £116,200 a year earlier. The GVA-to-turnover ratio also improved from 0.59 to 0.62.

Those are sector estimates rather than audited company metrics, but the direction is significant. Cyber firms appear to be generating more economic value without expanding payroll at the same pace.

Product companies accounted for the employment growth

Product-based firms employed 27,164 FTEs, or 39% of the sector total, and generated most of the net increase in cyber employment. Service and MSSP-related employment remained around 42,400.

That does not make product businesses inherently superior. Services can generate durable recurring revenue and deep customer relationships. It does mean the two models should be assessed with different operating metrics.

The sector is still services-heavy

The report classifies about 72% of firms as mainly involved in service provision, including managed services, while 29% are mainly involved in product development. The categories can overlap because many security companies sell both software and services.

For BBR's company comparison work, the practical solution is to assign a primary business model while recording meaningful secondary activities.

Investment has not kept pace with operating growth

Dedicated UK cyber firms raised £184 million across 47 deals in 2025, down from £206 million across 59 deals in 2024. At the same time, sector revenue and GVA continued to rise.

That divergence is important. Venture funding is one measure of ecosystem activity, but it is not a substitute for customer revenue, profitability or acquisition activity.