UK emerging as prime destination for tech growth ahead of US, Europe and APAC despite persistent barriers to investment

• Over 60 per cent 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, as 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, as tech companies call for government support to overcome these hurdles

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 leaders¹ reveals that 62 per cent consider the UK a more attractive location to grow and scale a tech business than mainland Europe, with 61 per cent favouring the UK over the Asia-Pacific region and 60 per cent 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 per cent) planning at least a 20 per cent increase in AI investment over the next 12 months and 95 per cent 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 per cent) of tech firms report that the UK macroeconomic climate is giving their business a boost and a similar share (75 per cent) 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 per cent) expect to commit more capital this year compared to last and by an average increase of 8.9 per cent.

Barclays’ anonymised client data² comparing Q1 2024 and Q1 2025 also indicates strong investment intentions:

• Cash inflows into technology businesses rose by 1.7 per cent, while overall cash balances in current accounts declined by 9.6 per cent
• However, the tech sector had the highest increase in savings account balances, up 21.5 per cent, suggesting tech businesses are holding onto cash ready to deploy to support their investment plans
• Meanwhile overdraft usage fell by 26.2 per cent, 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 per cent 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 per cent, excessive regulatory requirements and compliance costs (36 per cent) and limited government funding and grants (33 per cent), 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 per cent of companies in the sector believe that government backing is crucial to support their long-term business growth. Namely, 44 per cent of respondents are calling for specialised funding programmes for the technology sector and 37 per cent believe the government should provide more robust support for businesses looking to attract international investors.

An additional 36 per cent would like to see enhanced tax incentives for equity investments to help stimulate greater private investment and innovation, alongside a further 36 per cent 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.”

To support business to invest for growth, The Barclays Business Prosperity Fund³ is available for new and existing Business Banking customers and UK Corporate Banking clients across the UK to apply for lending and refinancing on existing projects. Businesses can read the full Technology report and find out more about the Fund at home.barclays/businessprosperity.

Tech businesses can also register with the Barclays Innovation Banking team who provide a continuum of support for the UK’s critical innovation businesses to scale from Idea to IPO: barclays.co.uk/business-banking/sectors/innovation.

Notes 

Barclays Business Prosperity Research

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).

¹ The survey data was conducted among 500 technology business decision makers, between 12th – 27th May 2025, by Opinium Research on behalf of Barclays.

² Barclays anonymised client data, represents technology businesses across Barclays Business Banking and UK Corporate Bank divisions.

³ £22bn is the total amount of lending Barclays has available to lend and support business growth among Business Banking and UK Corporate Banking clients in 2025. Subject to normal lending assessment, status and application. Terms and conditions apply.

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