The past two years have proved to be a whirlwind driven by the political melodrama that is Brexit. Amidst high-profile cabinet resignations and political manoeuvring, business leaders and entrepreneurs have been left in the dark, forced to second guess what might potentially happen come March 2019.
While there’s no denying the impact Brexit is having on the private sector, it’s vital we don’t let this issue overshadow the progress that’s being made by the UK’s thriving tech sector. As someone who works closely with tech startups in London, the ambiguity surrounding Brexit has done little to hamper the scalability and growth of the capital’s innovative businesses.
Looking ahead, now is a critical time for tech startups and scaling businesses to identify prospective trends and challenges that lie on the horizon and ensure they are adequately positioned to scale up and reach their full potential.
Brexit has not dampened the tech sector
Some businesses have been more adversely affected than others, yet for the tech sector – and particularly those startups in London – the political situation has done little to dampen their spirits.
In June 2018, it was revealed the UK’s tech sector had surpassed £180bn in value, cementing the country’s status as the AI capital of Europe. The Government has also been taking note introducing new initiatives to make the UK a global capital for digital innovation. For example, the Government announced a £2.5bn British Patient Capital programme which is anticipated to attract £5bn in private investment for companies to grow and expand internationally.
Backed by government support and positive investor sentiment, both at home and abroad, the tech sector has become a bedrock of the economy with many latest innovations being fuelled by high-growth startups. And there’s no reason why this won’t continue. Based on what we have seen in the capital so far, I’m confident that London will remain Europe’s leading digital hub.
Taking advantage of the UK’s tech capabilities
There’s no denying that the UK’s entrepreneurial spirit is palpable, however, one of the key challenges many tech startups face is finding digitally skilled workers. A survey of 100 founders of tech startups in the capital by Studio Graphene found that one in three founders felt there was a shortage of talent and 35% found it difficult to lure them away from larger companies.
The aim now, therefore, is to deepen the talent pool of skilled tech professionals in the UK. There are a variety of ways this can be achieved, particularly when it comes to Government-led plans that incentivise the expansion of a digitally skilled workforce. Dedicated training programmes, apprenticeships and special visas designed to attract tech professionals are just some ways of improving the diversity and range of skills available to tech startups.
Another cost-effective solution is to consider the advantages that arise from outsourcing the technical and digital aspects of their business to companies that specialise in tech, rather than keeping everything in-house. This can help forge new relationships and also encourage entrepreneurs to consider fresh ideas.
Embracing digital solutions
Looking more broadly at the issues facing businesses outside of the tech arena, a key challenge for young companies is the ability to remain competitive. With around half a million new startups being launched every year, there is no shortage of new ideas and opportunities popping up across the country. Last year, an impressive 589,000 companies were established across the country – 100,000 more compared to 2016.
While this is positive news and a clear reflection of our healthy entrepreneurial culture, this annual influx of new startups has also fostered an extremely competitive climate for young businesses – and the number of companies failing to scale is testament of the challenges. Indeed, only 53% of all businesses launched in 2014 survived until their third birthday.
Tech can seem initially overwhelming as there are plenty of buzzwords, abbreviations and acronyms readily appearing. However, the basic premise underpinning the evolution of tech remains the same – to promote efficiency and to disrupt outdated processes. Regardless of sector, new software and hardware are transforming the way businesses operate, both in terms of their internal operations and external engagement. With the digital literacy of consumers rising, startups must ensure they’re keeping up with the latest trends – doing so will mean they are ideally placed to reap the many benefits on offer from digital adoption.
It’s indeed important that startups are able to look beyond some of the more immediate challenges posed by Brexit. Those who have identified a gap in the market shouldn’t be dissuaded from transforming their idea into a product. Moreover, it’s vital that entrepreneurs embrace the infrastructure that currently exists so they can aggressively scale their business.