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A total of £27bn of IT spending has been put on hold by 1.7 million businesses in the UK, because they don’t know what Brexit will bring.
With two months to go to the day the UK is set to leave the European Union, nobody yet knows how the UK will leave.
Research, of 500 people, was carried out by Opinium at the behest of internet service provider Beaming, and the survey found 31% of businesses in the UK – which equates to about 1.7 million – have helped back IT initiatives because of uncertainty around Brexit.
It also revealed about half (53%) of small to medium-sized enterprises (SMEs) and over three-quarters of large businesses have put at least one IT project on hold.
Technology companies are the most likely to have put IT projects on hold, according to the survey, with 80% reporting this. In financial services, 68% have put IT projects on hold, while 64% of educational organisations, 60% of construction companies and 57% of manufacturers have done the same.
“Regardless of the rights and wrongs of Brexit, it has become clear the political stalemate in Westminster is creating uncertainty and affecting investment,” said Sonia Blizzard, managing director of Beaming.
“Whatever happens, businesses need to communicate and ensure systems are resilient, and we are seeing spending to improve essentials such as connectivity and cyber security.”
IT suppliers are baring the brunt of the pause in investment.
UK-based predictive maintenance software maker Senseye is typical of a company growing experiencing a slowdown due to enterprises pausing spending.
The company, which has received venture capital funding, has grown from 30 to 50 people over the past year, and signed contracts with several large manufacturers around the world.
But the adoption of its technologies in the UK has been affected by Brexit, said Simon Kampa, CEO at Senseye. “Although the returns that can be achieved using our technology are proven, adoption in the UK has undoubtedly been affected by Brexit.
“We’re talking to several major manufacturers that would like to trial Senseye, but are unwilling to commit to new innovation projects without more certainty around their European supply chains and export outlook.”
It is not just the customers of IT suppliers that are holding back investment in the UK, but also investors in the companies. Recent figures from London & Partners about tech investment in London, the UK’s biggest tech hub, found it dropped 28%, some £700m, in past year, compared with the previous year.