UK tech leaders see home market outshining US, Europe, Asia-Pacific
Barclays has reported that the UK is now seen by tech company leaders as a more attractive location for growth compared with the United States, Asia-Pacific and mainland Europe.
According to the latest findings from the Barclays Business Prosperity Index, a majority of technology business leaders surveyed favour the UK's market potential over other established tech hubs. The index, compiled with support from the Centre for Economics and Business Research, surveyed 500 technology decision-makers across the UK.
UK market preferred
The data shows that 62 per cent of participants consider the UK to be a more promising location for expanding a technology business than mainland Europe. Sixty-one per cent prefer the UK over the Asia-Pacific region, and 60 per cent believe the UK offers better prospects than the United States. Businesses cite strong local market opportunities, a robust customer base, access to skilled and diverse talent, and faster uptake of technology products as the main factors distinguishing the UK from its peers.
This trend coincides with growing interest in the technology sector, particularly in artificial intelligence. Half of those surveyed plan to increase their AI investment by at least 20 per cent over the next year, while 95 per cent report strong demand from clients for AI-driven products and services.
Positive economic outlook
Tech firm leaders' confidence extends to the wider economic climate. More than three quarters (76 per cent) say that UK macroeconomic conditions are benefitting their businesses, with a similarly large proportion (75 per cent) expecting the current political environment to support business growth over the next three years.
Analysis of Barclays' anonymised client data, comparing the first quarters of 2024 and 2025, further highlights burgeoning investment intent among tech businesses. There was a 1.7 per cent increase in cash inflows into technology firms, but a 9.6 per cent drop in current account balances, indicating money is being reserved elsewhere. Notably, technology businesses increased their savings account balances by 21.5 per cent, suggesting companies are setting aside funds to execute growth plans. At the same time, overdraft usage declined by 26.2 per cent while overall borrowing levels stayed relatively unchanged, pointing to more cautious and structured financial planning within the sector.
Almost all leaders surveyed (95 per cent) confirmed their businesses were actively exporting during the reporting period, underlining the sector's outward-looking approach.
Concerns about funding and regulation
Despite this optimism, technology companies continue to face several obstacles in securing funding and investment. Forty per cent cite high fundraising costs as a significant challenge, while 36 per cent highlight excessive regulatory requirements and compliance costs. Limited government funding and grants were also mentioned by 33 per cent as hurdles for those aiming to scale or innovate domestically.
The majority of respondents believe that supportive government intervention is necessary to sustain the UK's status in the global technology sector. Over 70 per cent of surveyed firms say that government backing is crucial for long-term business success, with 44 per cent calling for specialised funding programmes tailored to the needs of the technology industry. Thirty-seven per cent advocate for enhanced government support to attract international investors.
Additionally, 36 per cent of tech leaders would like to see improved tax incentives for equity-based investment, aiming to drive further private capital into the sector. Another 36 per cent have called for more accessible government grants targeting start-ups and smaller firms.
Sector voices on support needs
Helena Sans, Head of Technology, Media & Telecoms & Innovation Banking at Barclays UK Corporate Bank, commented, "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 GBP £250 million 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 GBP £22 billion 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."
The Barclays Business Prosperity Fund is currently open to new and existing business clients, offering lending and refinancing opportunities to help support both ongoing and future investment needs for UK technology companies.
