UK tech leaders back home turf for growth as AI drives investment

Thursday 28 August 2025 1:00 pm

The UK is more and more being seen by its personal tech entrepreneurs as essentially the most enticing nation through which to construct and scale a expertise firm, in line with a brand new report.

Barclays Financial institution’s newest Enterprise Prosperity Index revealed {that a} majority of tech leaders now view Britain as providing stronger development prospects than its worldwide rivals within the US, Europe, or the Asia-Pacific area, suggesting a renewed confidence within the home market regardless of international headwinds.

UK tops international rivals

In a survey of 500 tech executives, 62 per cent voted that the UK is extra enticing on this area than mainland Europe, whereas 61 per cent favoured Britain over the Asia-Pacific area. In the meantime, 60 per cent most well-liked it to the US.

Respondents identified a powerful buyer base, expert and numerous expertise swimming pools, and speedy client adoption of latest applied sciences as the primary differentiators.

These findings comply with latest authorities information, which revealed a surge in UK tech entrepreneurship, with 14,262 new companies launched within the second quarter of 2025, a 16 per cent enhance year-on-year.

Tech secretary Peter Kyle not too long ago lauded Britain as poised to “overtake America” in some areas as a result of a extra agile regulatory atmosphere and the launch of the brand new Regulatory Workplace to streamline approvals.

AI funding accelerates

The report famous that AI stays the standout development driver. Whereas half of the surveyed companies stated they deliberate to extend AI funding by at the very least 20 per cent over the following yr, 95 per cent reported rising consumer demand for AI services.

Helena Sans, head of tech, media and telecoms and innovation banking at Barclays Company Financial institution, stated: “There’s a transparent sense that the UK is holding its personal on the worldwide tech stage.”

“To maintain up this momentum, we’ve received to interrupt down the remaining roadblocks, together with entry to funding, attracting international buyers, and constructing a stronger urge for food for threat”.

In consequence, Barclays has launched a £250m development lending fund and established its Innovation Banking workforce to assist scaling tech firms.

Sheetal Shinh, head of innovation banking at Barclays Enterprise Banking, stated that entry to capital stays some of the urgent points.

“Whether or not it’s serving to founders navigate their first funding spherical or connecting them to specialist recommendation, or Innovation Banking groups are right here to unlock development at each stage,” Shinh added.

Confidence, however with caveats

Barclays’ personal consumer information demonstrated that the sector is exhibiting robust short-term liquidity.

Financial savings balances for tech firms rose 21.5 per cent yr on yr, at the same time as overdraft utilization fell greater than 26 per cent.

The shift indicators better confidence in money circulation and a transfer away from versatile, high-cost borrowing.

Nevertheless, the report revealed that the boundaries stay, with 40 per cent of leaders citing excessive fundraising prices, adopted by 36 per cent quoting regulatory compliance burdens, and 33 per cent pointing to restricted authorities grants as key obstacles.

Some 72 per cent stated stronger authorities backing was wanted to maintain development, with calls for brand spanking new funding programmes, higher tax incentives for buyers, and focused grants for start-ups.

These calls for echo suggestions from the business physique techUK, which in Might urged ministers to place the expertise sector on the centre of the UK’s development mission, underlining the necessity for coverage coherence and funding in digital abilities.

Regional and international outlook

The federal government has additionally been pushing to unfold tech development past the capital.

The Regional Booster Programme, introduced in July with £1m of funding, helps start-ups in hubs from the North East to Scotland by mentoring and funding promotion.

Ben Bilsland, head of expertise at RSM UK, stated the surge in firm formations confirmed founders had been now not “ready out uncertainty”.

“Entrepreneurs have realised the uncertainty is right here to remain. As an alternative of ready, they’re selecting to behave,” he added.

Nonetheless, he warned looming adjustments to R&D tax incentives might dampen momentum if not dealt with fastidiously.

As international competitors in AI and fintech continues to accentuate, the UK’s problem might be to match its entrepreneurs’ confidence with coverage assist.