The majority of UK-based tech companies consider their home market as a more favourable destination for growth than other core international hubs, although both there is still work to be done to break down the remaining roadblocks, including access to funding, attracting global investors, and building a stronger appetite for risk.
So says the latest Barclays Business Prosperity Index, which quizzed 500 technology business leaders and reveals that the UK’s strong market opportunities and customer base, access to a skilled and diverse talent pool, and faster-growing consumer take-up of technology were the three key differentiators cited compared to other markets.
Interest in the technology sector continues to surge, with half of tech businesses (50%) planning at least a 20% increase in AI investment over the next 12 months and 95% reporting increasing demand from clients for AI products and services.
This is supported by a wider confidence in the economic outlook. More than three quarters (76%) of tech firms report the UK macroeconomic climate is giving their business a boost and a similar share (75%) believe the political landscape will help support growth over the next three years.
More broadly, tech firms are committed to ongoing investment in their business. Seven in ten (70%) expect to commit more capital this year compared to last and by an average increase of 8.9%.
The sector also remains highly outward-facing, with 95% of tech leaders surveyed stating they engaged in exports during the period.
Despite plans for growth, some barriers to sourcing funding and investment remain. The most pressing challenges were cited as high costs associated with the fundraising process (40%); excessive regulatory requirements and compliance costs (36%); and limited Government funding and grants (33%), resulting in hurdles for companies looking to scale and innovate in the UK.
To ensure the UK retains its position as one of the global leaders in technology innovation, 72% of companies in the sector believe that Government backing is crucial to support their long-term business growth.
Drilling further down into the detail, 44% of respondents are calling for specialised funding programmes for the tech sector and 37% believe the Government should provide more robust support for businesses looking to attract international investors.
An additional 36% would like to see enhanced tax incentives for equity investments to help stimulate greater private investment and innovation, alongside a further 36% calling for Government grants for start-ups and small businesses.
Head of technology, media, and telecoms and innovation banking at Barclays UK Corporate Bank Helena Sans said: “There’s a clear sense that the UK is holding its own on the global tech stage, with founders and leaders increasingly seeing the UK as one of the best places in the world to grow and scale.
“To keep up this momentum, we’ve got to break down the remaining roadblocks.
Barclays Business Banking head of innovation banking Sheetal Shinh added: “Access to finance is a key issue for tech businesses looking to scale.
“Whether it’s helping founders navigate their first funding round or connecting them to specialist advice, Barclays Innovation Banking teams are here to unlock growth at every stage of the journey.”
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