Three quarters (74%) of tech entrepreneurs and business leaders are forecasting growth in 2017 according to recent research by Smith & Williamson, the accountancy, investment management and tax group.
Those within the tech industry were close to 20 per cent more hopeful for their own growth prospects when compared to the wider entrepreneurial and small business sector. Only 56% of all entrepreneurs and business leaders surveyed were anticipating growth in 2017.
“Despite uncertainty in the UK, and wider economy, there are a lot of things going for tech companies as we move in to 2017,” said Sancho Simmonds, partner and scale-up lead at Smith & Williamson.
“There is a wealth of expertise available, a developed economy, a collaborative environment, a friendly tax regime and a relatively accessible supply of funding. Indeed, over half of our respondents felt that access to funding was improving.”
The transition of crowdfunding in to a mainstream funding option in recent years coupled with the development of BGF Ventures (a tech specific fund established by the British Growth Fund) has opened up doors for tech businesses in the UK.
“Tech companies are increasingly happy to use the innovative funding options available to them. This has forced the more traditional lenders; banks and angel investors, to become more tech savvy. Where lenders may have once seen unknown risk, there are now experts who are able to understand the industry and the potential lendee’s place within it. These developments have been hugely beneficial to tech start-ups and scale-ups.”
“Research and development tax credits have also entered mainstream consciousness. Government backed initiatives have really helped to encourage development in certain sectors, tech being one. Now they need to look at how this push can be best expanded in to other areas.”
Only 16% of tech respondents felt that a weaker sterling would encourage them to seek new opportunities in export markets and 45% of respondents felt that their business would thrive, irrespective of access to the EU single market.
“Many tech businesses are under the impression that they are insulated from the wider cyclical nature of the economy. There is a belief that if the tech firm is innovative it is likely to be a success whatever is happening. Whilst to some extent this may be the case, we would always encourage businesses to be aware of the impact the world around could have and factor that in to any business planning.”
Only 42% of the tech firms believed there was adequate education or training within the employment pool.
“There are worries over the ability of firms to attract and retain high quality, skilled talent. The EU referendum vote has left uncertainty within the market which is still yet to be addressed. In the short term this hasn’t caused a problem but there are on-going fears that, in the medium and long term, this issue could really start impacting how tech businesses operate.”