INTELLIGENT TECHNOLOGY: UK TECH

New research from the Barclays Business Prosperity Index reveals the majority of UK-based tech companies consider their home market as a more favourable destination for growth than other core international hubs.

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 wider confidence in the economic outlook. More than three quarters( 76 %) of tech firms report that 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.

Tech firms call for support to address remaining barriers

Barclays’ anonymised client data comparing Q1 2024 and Q1 2025 also indicates strong investment intentions:

• Cash inflows into technology businesses rose by 1.7 %, while overall cash balances in current accounts declined by 9.6 %

• However, the tech sector had the highest increase in savings account balances, up 21.5 %, suggesting tech businesses are holding onto cash ready to deploy to support their investment plans

• Meanwhile overdraft usage fell by 26.2 %, despite borrowing remaining relatively flat over the same timeframe

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.

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.

Helena Sans, Head of Technology, Media & Telecoms & Innovation Banking at Barclays UK Corporate Bank, 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 – including access to funding, attracting global investors and building a stronger appetite for risk.”

Sheetal Shinh, Head of Innovation Banking at Barclays Business Banking said:“ Access to finance is a key issue for tech businesses looking to scale. At Barclays, we’ re backing these ambitions through our £ 22 billion Business Prosperity Fund and tailored support for early-stage innovators.” p

www. intelligentcio. com INTELLIGENTCIO EUROPE 31