UK tech firms are confident they will grow by an average of 11% this year, four times faster than the country’s GDP forecast of 2.6%, a survey from Barclays’ technology, media and telecoms teams has found.
The Barclays’ Fast Growth Tech survey found 58% of CEOs and business owners were expecting to see growth of up to 10% in 2015, with 185 predicting growth of between 10% and 20%, and 9% predicting growth of over 20%.
Those questioned were also positive about the prospects of growth in 2016, with the average firm predicting a further 15% growth next year. Some 16% of respondents expected growth to top 20% in 2016.
Sean Duffy, managing director and head of Barclays’ technology, media and telecoms team, said these growth predictions revealed the optimism and drive of the UK’s world-leading tech sector.
“The fact that many firms are expecting further growth in 2016 shows that this trend isn’t transient and the UK is a real launch pad for innovative tech businesses,” he said.
“Investors are seeing the UK as an international talent magnet and a platform to grow or launch their business for a number of compelling reasons, including the culture, light-touch regulation, supportive government policies and access to finance,” added Duffy.
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Some 79% of respondents cited “strong leadership” as the key factor to their growth in 2014, with marketing and advertising, in addition to strong leadership, seen as crucial to sustaining or accelerating growth over the next 12 months. Three-quarters agreed that developing and protecting IP is crucial to the success of the business.
The most pressing concerns for business leaders in 2015 were revealed as increased competition (29%) and the ability to attract and retain talent (25%).
“Strong leadership rang out loud and clear as being critical for growth, and this is particularly important in the first few years of a business’s life,” said Duffy. “It’s also even more relevant for fast-growth businesses, which experience unique stressors and demands on their cash flow, requiring their leaders to make many major decisions at speed to keep pace.
“It takes an extremely strong and dynamic individual to have a clear vision and the energy to lead their workforce to success in this type of supercharged environment.”
Almost half (46%) of all UK tech business surveyed admitted that the government provides sufficient support in enabling growth. This figure increased to 55% for small firms.
The biggest financial challenges cited for 2015 were increased costs (21%) and managing cash flow (19%).
The research questioned companies saw growth last year of up to 10%, between 10% and 20%, and over 20%.