BillionPhotos.com - Fotolia
Technology businesses vital to UK post-Covid economic recovery
Technology firms are set to play a larger role in UK’s post-Covid economy and are being encouraged to expand overseas after a strong year for digital exports
Technology businesses and their digital exports will be vital to the UK’s post-Covid-19 economic recovery, according to government ministers and entrepreneurs, encouraging businesses to look for overseas opportunities at virtual event.
Speaking at industry body Tech Nation’s Unlocking Global Tech event, head of Europe and Eurasia at the World Economic Forum (WEF), Martina Larkin, said the economic recovery from the pandemic so far has been very uneven – “stock markets are going up, but the situation for SMEs [small and medium-sized enterprises] and employment is going down” – and that most European central banks are not expecting their economies to return to pre-coronavirus levels until 2022.
“There are those businesses which don’t have a business plan and haven't really adapted to this new reality, and then there are those that have, but no country will be able to finance all companies that are in trouble at the moment. Countries need to make strategic decisions about which businesses and industries they want to rescue,” she said.
“Overall the recovery needs to focus on transformation – the digital transformation, energy transition, training and skill building, especially for young people. The common message here is that the recovery cannot be a restart, we need to have a sort of Schumpeterian approach. We have to have some creative disruption in our economies, and entrepreneurs and innovation will have a critical role to play in this process.”
In his keynote address, minister for exports at the Department for International Trade (DIT), Graham Stuart, said the government is “determined to help UK firms embrace exciting new opportunities for trade and investment that are emerging across the globe”, adding that “tech is right at the heart of this endeavour.”
Stuart further noted that he would be leading the creation of a new export strategy to support businesses in unlocking their trading potential.
“That will work in tandem with world-leading free-trade agreements that we’re currently negotiating with the US, Japan, Australia and New Zealand,” he said. “We’re determined that all these agreements should contain ambitious, modern digital chapters, and we will pursue leading-edge provisions that cover everything from cross-border data flows to cyber security.”
In his opening remarks, Tech Nation chair Stephen Kelly spoke about the organisations newly published Unlocking global tech report, which found the UK was the fifth largest exporter of digital technology services, at $30.5bn in 2019.
“It’s extremely encouraging to see the UK’s digital exports are expected to grow by a third to 2025 to more than $40bn as British tech startups expand their businesses globally, demonstrating the UK’s global significance when it comes to digital tech,” he said, adding that unprecedented times create unprecedented opportunities.
“From surveys of founders within the Tech Nation community, 80% of companies see global expansion as a priority – the knowledge and experience of what and how are critical for success. There are predictions that digital, technology and creative industries could represent 50% of the UK economy by 2030.”
According to Tom Adeyoola, co-founder of Metail and Extend Ventures, the traditional view of technology enterprises looking to scale globally is to build up a presence in their home country first, before expanding elsewhere market by market. But this no longer needs to be the case when looking to scale, he added.
“The product we made was a software-based product, and the interesting thing for us when we were looking to go global is that, through cloud computing, you can deploy the software product anywhere in the world,” he said.
“That completely changed the game, you could basically deliver services to somebody in India, Australia, all over the globe, by just turning on servers in the relevant AWS [Amazon Web Services] host country”
Adeyoola added, however, that team members in other geographies should still have a grounding in the enterprise’s culture before starting work in these regions.
“It’s very easy to become isolated, so it’s really important for that first hire to try to have somebody who’s already been entrenched and embedded in your UK culture before going to the new region and then hiring,” he said.
On the other hand, Gordon Sanghera, co-founder and CEO of genetic sequencing company Oxford Nanopore, said it was important to hire leadership directly from the geographies in which you are expanding, so as to avoid being “a foreign company in those regions”.
Read more about UK businesses
- With the UK leading venture capital investment in net zero enterprises, Tech Nation have launched a new, government-backed scaleup programme to further develop the sector
- UK digital tech services exports dipped between 2018 and 2019, according to research from Tech Nation. In its latest Unlocking global tech report, the organisation urges UK technology businesses to maintain and build international trading relationships to build back better from Covid-19.
- Small and medium sized-businesses (SMEs) in the UK remain ‘cautiously optimistic’ about third-quarter revenue increases after stronger-than-expected performances in the second quarter, with nearly a third planning to resume technology investment, according to latest Barclaycard Payments SME Barometer.