Barclays 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. 61% favour the UK over the Asia-Pacific region and 60% prefer it to the US. Respondents suggested three key differentiators compared to other markets. These included 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.
Interest in the technology sector continues to surge. 50% plan at least a 20% increase in AI investment over the next 12 months. 95% report increasing demand from clients for AI products and services.
This is supported by wider confidence in the economic outlook. 76% of tech firms report that the UK macroeconomic climate is giving their business a boost. A similar share (75%) believe the political landscape will help support growth over the next three years.
Key highlights
- Over 60% of tech businesses view the UK as a more attractive growth hub than other key markets.
- Barclays anonymised client data shows capital is being accumulated to support growth plans. Tech leaders cite intentions for substantial AI investment.
- 95% of tech firms report a strong demand for AI products from clients.
- However, some barriers to investment remain, including high costs in the fundraising process and extensive regulatory requirements. Tech companies call for government support to overcome these hurdles.
Tech firms taking action
Tech firms are acting but call for support to address remaining barriers. More broadly, tech firms are committed to ongoing investment in their business. 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%. This suggests 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 reflect stronger short-term liquidity and a shift away from flexible, high-cost borrowing towards more structured financing. At the same time it also signals 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.
Barriers to funding and investment
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%). In addition to excessive regulatory requirements and compliance costs (36%) and limited government funding and grants (33%). These challenges result 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. 37% believe the government should provide more robust support for businesses looking to attract international investors.
An additional 36% would like 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.
The best place to grow and scale
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. 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. This includes 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. The fund is 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.”
Methodology
This research is conducted as part of the Barclays Business Prosperity campaign. In November 2024 Barclays launched the Business Prosperity Index – a trackable measure of business performance and future growth – with economic modelling produced in partnership with the Centre for Economics and Business Research (Cebr).
The survey data was conducted among 500 technology business decision makers, between 12th – 27th May 2025, by Opinium Research on behalf of Barclays. Barclays anonymised client data, represents technology businesses across Barclays Business Banking and UK Corporate Bank divisions.
Enterprise Times: What this means for business
This Barclays data goes against the prevailing wind of economic gloom and doom for the UK economy. However, it highlights the tech sector remains well positioned for growth, compared to other geographical markets. Barclays Business Prosperity research suggests the majority of UK-based tech companies consider their home market as a more favourable destination for growth than other core international hubs.
This is not surprising. The country has a mature ecosystem driven by strong investment and highly skilled workforce. The current and past governments have provided a robust backing for research and development. As a result, the UK has Europe’s largest tech ecosystem, valued at nearly £1 trillion.
What’s interesting about the Barclays research is that 95% of tech firms report a strong demand for AI products from clients. As a result, tech leaders cite intentions for substantial AI investment. This is in line with similar industry and analyst report.
Earlier in the year, Accenture published a report examining how European organisations are investing, adopting and seeing value from AI. UK business leaders were optimistic about the economic benefits that AI can bring them. With 90% of organisations reporting financial returns from AI investments that met or surpassed expectations. Firms also believe that AI will boost revenue by 12% and productivity by 15% over the next 18 months.
