UK emerging as prime destination for tech growth ahead of US, Europe and APAC despite…
New research from the Barclays Business Prosperity Index reveals the majority of UK-based tech companies consider their home market as a more favourable destination for growth than other core international hubs.
Research among 500 technology business leaders reveals that 62 % consider the UK a more attractive location to grow and scale a tech business than mainland Europe, with 61 % favouring the UK over the Asia-Pacific region and 60 % preferring it to the United States. The UK’s strong market opportunities and customer base, access to a skilled and diverse talent pool, and faster-growing consumer take-up of technology products were the three key differentiators cited compared to other markets.
Interest in the technology sector continues to surge, with half of tech businesses (50 %) planning at least a 20 % increase in AI investment over the next 12 months and 95 % reporting increasing demand from clients for AI products and services.
This is supported by wider confidence in the economic outlook. More than three quarters (76 %) of tech firms report that the UK macroeconomic climate is giving their business a boost and a similar share (75 %) believe the political landscape will help support growth over the next three years.
Tech firms are taking action but call for support to address remaining barriers
More broadly, tech firms are committed to ongoing investment in their business. Seven in 10 (70 %) expect to commit more capital this year compared to last and by an average increase of 8.9 %.
Barclays’ anonymised client data comparing Q1 2024 and Q1 2025 also indicates strong investment intentions:
- Cash inflows into technology businesses rose by 1.7 %, while overall cash balances in current accounts declined by 9.6 %
- However, the tech sector had the highest increase in savings account balances, up 21.5 %, suggesting tech businesses are holding onto cash ready to deploy to support their investment plans
- Meanwhile overdraft usage fell by 26.2 %, despite borrowing remaining relatively flat over the same timeframe
These figures reflects stronger short-term liquidity and a shift away from flexible, high-cost borrowing towards more structured financing, while also signalling greater confidence in cash flow stability and long-term planning.
The sector also remains highly outward-facing, with 95 % of tech leaders surveyed stating they engaged in exports during the period.
Despite plans for growth, some barriers to sourcing funding and investment remain. The most pressing challenges were cited as: high costs associated with the fundraising process (40 %, excessive regulatory requirements and compliance costs (36 %) and limited government funding and grants (33 %), resulting in hurdles for companies looking to scale and innovate in the UK.
To ensure the UK retains its position as one of the global leaders in technology innovation, 72 % of companies in the sector believe that government backing is crucial to support their long-term business growth. Namely, 44 % of respondents are calling for specialised funding programmes for the technology sector and 37 % believe the government should provide more robust support for businesses looking to attract international investors.
An additional 36 % would like to see enhanced tax incentives for equity investments to help stimulate greater private investment and innovation, alongside a further 36 % calling for government grants for start-ups and small businesses.
Helena Sans, head of technology, media & telecoms & innovation banking at Barclays UK Corporate Bank, said: “There’s a clear sense that the UK is holding its own on the global tech stage, with founders and leaders increasingly seeing the UK as one of the best places in the world to grow and scale.
“To keep up this momentum, we’ve got to break down the remaining roadblocks – including access to funding, attracting global investors, and building a stronger appetite for risk.
“That’s why at Barclays we recently launched the Innovation Banking team along with a bespoke £250m Growth Lending Fund, designed to support fast-growing tech businesses with the capital they need to scale confidently.”
Sheetal Shinh, head of innovation banking at Barclays Business Banking said: “Access to finance is a key issue for tech businesses looking to scale. At Barclays, we’re backing these ambitions through our £22bn Business Prosperity Fund and tailored support for early-stage innovators. Whether it’s helping founders navigate their first funding round or connecting them to specialist advice, our Innovation Banking teams are here to unlock growth at every stage of the journey.”