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Does the UK government want to support tech SMEs in 'Global Britain' or not?
The reluctance of the government to commit to continued support for UK tech SMEs overseas is baffling
One of the best things about working in technology - and it doesn’t matter where you are based in the world - is the excitement of the first quarter of the year. What a start it was to 2019, with the industry descending on Las Vegas for the Consumer Electronics Show (CES) and Barcelona with Mobile World Congress (MWC).
Whether you are a large or small company, they are musts in the calendar. But with exhibition floor space at a premium and much of it bought up by the larger players, they are not the most forgiving places for a small innovative tech company’s limited budget.
To help, the Department for International Trade (DIT) offers Trade Access Programme (TAP) funding to get the smaller players the market exposure they need to really supercharge their businesses. Countries from around the world pump huge amounts of their budgets into national pavilions at these big events because they understand the importance of the exposure these shows bring with them.
This year at CES for example, the French government supported over 325 companies to showcase their wares; the Dutch took 50; Israel took 22 and the Swiss took 30. The UK, with its world-renowned tech sector, was able to support just 16 - making it one of the smallest national pavilions at the show but a major improvement on the past when in 2017, the UK SME presence was described as an “embarrassment” by show organisers.
The tech sector welcomed the response to this criticism when DIT upped the investment in 2018 and again in 2019 and we saw the effect of this in opportunities uncovered and deals made. The same story also unfolded in Barcelona where the UK MWC stand and ministerial presence this year was a match for other countries.
So you might think that we have lost our British modesty and we are all set to compete with the rest of the world to sell cutting-edge tech startups and SMEs. Surely, we all said, as we leave the EU and embrace the “global opportunity” we will invest more and more in programmes to support small British companies at these and other global showcases?
Well, it seems we were wrong.
Instead of planning an increase to build on the success delivered by the DIT team and its industry partners, the UK government is cutting the resources devoted to helping SMEs succeed at CES, MWC and other tech showcases.
The department’s TAP funding for tech SMEs has decreased in the last two years by nearly a quarter and is set to reduce further, leaving industry perplexed. With MWC for example, there were 61 TAP grants for both the main show and also the startup addition 4 Years From Now (4YFN) in 2019. This will be cut to 40 grants for MWC and 4YFN is totally cut from the programme in 2020.
In the wider world, TechUK has been told that it cannot add any further shows to its programme for funding. This means not being able to support shows in places in Asia and the Middle-East which could provide major opportunities in some of the biggest markets in the world.
The government is also making criteria changes, making it more difficult for SMEs to claim the TAP support. Any UK SME that has been exporting for more than 10 years is now not eligible for support and the number of grants a company can claim was reduced from 12 to six in late 2016.
A baffling message
The reluctance from the UK to truly commit and show its might on the world stage and support our world-class SMEs is baffling and the message is clear from industry: Government must commit to do more, rather than less, to support UK SMEs grow their export revenue as we leave the EU and compete on the world stage. And this must be a consistent approach over many years - it's not possible to build a tech brand and establish trusted customer relationships by turning the TAP on and off.
Conflicting messages from government because of the vagaries of Treasury budgeting or changing departmental focus just undermine our efforts and everyone struggles to see how such indecision fits within the wider “Global Britain” agenda.
TechUK is fully supportive of Global Britain and applaud the work of the public servants in DIT, Foreign Office, the Department for Digital, Culture, Media and Sport, and other departments to deliver for the tech industry. But they must be supported at the very top by a continuing commitment to programmes and to funding that SMEs can build their exporting efforts on and which will show without a doubt that the UK is the leader for tech innovation.
So, come on ministers - give your teams and our businesses the commitment they need to grow exports, drive business success and support high-skilled jobs here in the UK.
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