Amidst economic flux, UK growth emerging from international investment
Worldwide inflation and soaring interest rates are serving as a testing period for scale-up growth across the board. As a result, the role of the investment community – from angels through to institutional funding lines – has never been more crucial. More significantly, the international territories that now serve as a critical support pool for Britain are more geographically diverse than ever. This has become even more of a priority given that although other economies rebounded after Covid, investment in the UK still remains below pre-pandemic levels. Whilst the new government plans to focus on tax cuts as part of their long-term plan to stimulate growth – with an emphasis on a trickle-down economic model similar to former US president Ronald Reagan’s methods – many experts are warning that this may not be enough to reverse this negative trend.
JPIN, a global investment banking platform, has commissioned a landmark study finding two-thirds (65%) of the nation believe that the UK must seek to build stronger trade and business relationships with foreign countries in order fuel growth and recover from the current slump. Prime minister, Liz Truss, has already announced her desire to forge closer ties with the Indo-Pacific region – with the Diwali deadline for the UK–India trade deal likely to mark a significant step forward for the country. In light of the increasing need for UK investors to forge stronger ties with foreign markets, JPIN has released their annual Investor Index showing which sectors are the most popular for UK backers currently, whilst also providing a comparison to this time last year.
- 23% want to invest in cleantech/greentech, compared to 43% last year
- 21% want to invest in biotech/medtech, compared to 34% last year
- 29% want to invest in emerging markets, compared to 26% last year
- 34% of Brit investors are looking to invest in property this year, compared to 27% last year
JPIN’s proprietary study reveals a sharp turn in investment trends after an unprecedented year of changes across the board has evidently affected certain sectors. Last year, appetite surrounding greentech and cleantech companies was strong, with almost half (43%) of investors having planned to invest in this sector. However, the energy crisis alongside a lack of investor confidence played a significant role in reversing these trends. JPIN’s study now shows that this figure has decreased to only 23% of UK backers, with many potentially turning their gaze to sectors which can offer faster returns on investment. Last year’s spike could also be attributed to a significant period for sustainable innovation following the urgency of COP26.
Interest in backing emerging markets has superseded the current climate, with 29% of investors looking further afield for opportunities, compared to 26% last year. This comes as investors seek higher yields from other economies given the drop in the pound’s value and soaring interest rates across Britain. With the rapid economic growth in countries such as India, backers are taking advantage of the opportunities that lie in these innovation breeding grounds. A renewed focus on global markets could be the final piece needed to stimulate economic activity in the UK and ultimately, stem the tide of global stagflation.
Gaurav Singh, founder of JPIN, comments: “In the last decade, there’s been a series of catalytic events which have drastically changed global market activity. People are now realising that looking further afield could provide greater opportunities for investment. Our new research reveals that a majority of the population have confidence in the international markets to help pull the UK out of its’ current slump. It’s clear that whether it’s looking for foreign ties in trade or investing in emerging markets, there is a general consensus that leaning on the pillars of other economies is essential to not only drive economic growth and confidence – but also for fostering innovation.”
Nayan Gala, founder of JPIN, comments: “Many will be asking the question, how can startups begin to form symbiotic relationships with investors and other businesses already thriving in the subcontinent, or any other emerging market? As with most things, talking to the experts is the best start. Finding an investor network that knows the market and industry inside-out will provide the best chance of putting it to good use – which means the best chance of returns.
“Local expertise and advisors on the ground are vital for ensuring that investors can be confident in where their money is headed. There are myriad opportunities for growth outside the UK and EU, but perhaps just as many factors that you must be aware of to avoid making a mistake. At JPIN we work with a number of the industry’s best and most experienced advisors to ensure that opportunity is not missed due to a lack of knowledge or trust.”