Tech sector gets its mojo back as new government brings stability
The tech sector is feeling more confident under the new government, according to recent figures from RSM UK. New research from the leading audit, tax and consulting firm shows four in five (80%) tech businesses feel confident their business will grow now that the election is behind them.
The data also suggests many tech businesses are in a stronger position financially, with over half (57%) having less debt now compared to six months ago, while a quarter (25%) have the same amount. Less than one in five tech businesses (17%) said they now have more debt than six months ago.
Ben Bilsland, partner and head of technology sector at RSM UK, said: “The continued improvement in the economy, coupled with the certainty that comes from having a new government in place, is helping to drive increased confidence among technology businesses. Escalating interest rates and inflation hit technology companies hard in recent months, with many having to borrow money or make significant layoffs just to survive. Against this backdrop, technology companies are still being careful not to over-extend themselves. Many are carefully managing the debt they have on their balance sheet instead of borrowing to grow, however, this increased confidence is a good sign for the sector.”
The technology sector will be keeping a close watch on the Autumn Budget, as almost half (44%) of tech businesses said they want to see changes made to innovation reliefs to help unlock more funding for tech companies. A further 44% said they want to see more initiatives to address the skills gap that continues to hinder the tech workforce.
Ben continued: “With the Budget on the horizon, the government has an opportunity to invest in skills to help the sector. Any changes to R&D relief will be carefully analysed. This relief is integral to the business models of so many innovative tech companies, so the government will need to tread carefully with any proposed changes. The rumours of changes to capital gains tax have had a huge impact on the technology sector already, as many entrepreneurs have accelerated the sale of their business ahead of October 30, while many investment decisions are being delayed until there is certainty over this tax.
“The Budget is also an opportunity for the government to make investments in the workforce. We are entering a period where data will become an increasingly important asset, and the ability to work digitally and in computing will only become more valuable. Any investment in skills that support the technology industry will be welcomed.”
