Lack of funding and talent ‘preventing UK tech industry growth’
Only 50% of UK business leaders feel appropriate funding is accessible and only one third has any appetite for borrowing when compared to three months ago, according to the quarterly Enterprise Index by Smith & Williamson.
The investment management, accountancy and tax group’s research suggests the desire and ability to scale up a business is dampened within the UK.
“The UK is excellent at creating and developing tech start-ups but there is a feeling in the market now that we need to concentrate more on scaling up businesses,” said Nick Travis, a partner in investment management at Smith & Williamson.
“There is a big difference between the UK and US in the funding of new ventures, particularly amongst high growth areas such as virtual reality, augmented reality, internet of things, education technology and tech to assist the elderly. Venture capitals in the US generally seem to think a lot bigger and invest a lot more money. Start-ups, particularly tech ventures, are far more able to scale in the US than the UK,” he added.
The Smith & Williamson Enterprise Index decreased four points in the last quarter to 111.4, its lowest for 12 months. It appears to have been impacted by Brexit worries and concerns over the state of the UK and global economy, as expectations for growth fell by 9%.
Lack of talent
Over 66% of respondents said the lack of science, technology, engineering and Maths (STEM) skills among students was hindering the scaling-up of British businesses.
Fergus Caheny, a partner in investment management at Smith & Williamson, said, as a result, businesses must work on upskilling their existing workforce and training new recruits.
“We are increasingly hearing of talent moving to countries such as the US where the marketplace is perceived to be more attractive. It would be highly beneficial if action was taken to retain and encourage highly-skilled individuals to remain in the UK,” said Caheny.