UK tech entrepreneurs remain optimistic despite Brexit woes

Studio Graphene’s Q3 2019 Tech Tracker has revealed that confidence levels among UK tech startups is lower than three months ago, though business leaders remain bullish on hiring top talent and raising investment.

The survey of more than 100 business leaders within early stage, UK-based technology companies found:

  • 73 per cent of tech startups are ‘confident’ or ‘very confident’ they will increase their turnover in the coming 12 months – this is seven per cent lower than three months ago
  • 79 per cent intend to hire more staff (up six per cent) and 66 per cent hope to raise investment (up seven per cent)
  • However, there are concerns over a potential no deal Brexit – 73 per cent of entrepreneurs think this would be bad for their business
  • The majority (57 per cent) favour cancelling Brexit and remaining in the EU
    • 22 per cent  favour a second referendum, while 11 per cent  would like the UK to exit with a deal agreed – just eight per cent prefer a no deal Brexit
  • 58 per cent of respondents said they think Boris Johnson’s tenure as PM will negatively impact their business, compared to 18 per cent who think it will be positive

Confidence levels among UK tech startups has fallen over the past three months as Brexit concerns have become more prominent, Studio Graphene’s latest quarterly Tech Tracker survey has found.

The Tech Tracker quizzes over 100 business leaders within early stage, UK-based technology companies each quarter to assess and monitor their confidence levels. Following the first two iterations of the survey in March and June 2019, more than 100 responses were gathered again in late September.

The Q3 Tech Tracker found 73 per cent of tech startups are ‘confident’ or ‘very confident’ they will increase their turnover in the coming 12 months. This is seven per cent lower than three months ago.

Nevertheless, 79 per cent  intend to hire more staff (up six per cent quarter-on-quarter) and 66 per cent hope to raise investment (up 7%).

However, Studio Graphene’s research uncovered significant concerns over a potential no deal Brexit. Almost three quarters (73 per cent) of entrepreneurs think a no deal Brexit would be bad for their business.

In terms of their preferred outcome, the majority (57 per cent) favour cancelling Brexit and remaining in the EU. Meanwhile, 22 per cent would back a second referendum and 11 per cent would like the UK to exit the EU with a deal agreed – only eight per cent said they would prefer a no deal Brexit.

More generally, 58 per cent of tech startup leaders said they think Boris Johnson’s tenure as PM will have a negative impact on their business, compared to 18 per cent who think it will be positive.

Elsewhere, the Q3 results found that hiring the right talent remains the biggest challenge facing tech startups in the UK– 66 per cent cited this as an obstacle to growth, which is 12 per cent more than in Q2. This was followed by securing private investment (53 per cent), increasing sales (47 per cent), keeping pace with competitors (27 per cent) and developing new technology (21 per cent).

Ritam Gandhi, Founder and Director of Studio Graphene, said: “While there has been a dip in confidence over the past three months, it’s important to note that the vast majority of tech startups are confident they will grow in the year ahead. What’s more, significant numbers are looking to take on more staff and raise investment, which is positive news for the private sector.

“That said, we cannot ignore the impact Brexit is having on entrepreneurs across the country, more specifically, the threat of a no deal. Business leaders need clarity and certainty over what the future looks like – a no deal Brexit cannot provide this. So, while cancelling Brexit seems unlikely, it’s hugely important Boris Johnson and his cabinet listen to the concerns of UK tech startups, ensuring these businesses are supported and their interests are protected as much as is possible.”

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