Marketing and advertising was not only fundamental to the growth of the vast majority of UK tech firms last year, but also seen as the most important factor in sustaining or accelerating growth in 2015, by the largest percentage of respondents, according to new research.
Barclays’ Fast Growth Tech survey, which questioned owners and CEOs of UK tech firms, has revealed that many of the industry’s bright lights are feeling confident about delivering a stellar year of growth in 2015.
The research, independently commissioned by Barclays’ Technology, Media and Telecoms team revealed that on average, businesses surveyed predicted that they will grow by 11% over the course of the year – over four times faster than the UK’s GDP forecast for 20152 (2.6%).
The research showed that over half (58%) are expecting their business to grow by up to 10%. Furthermore, 18% are expecting between 10% and 20%, while 9% predicted significant growth of over 20%.
Respondents were even more positive about the outlook for 2016, with the average firm expecting 15% growth on 2015, with 16% of firms predicting growth to top 20%.
Four fifths (79%) of all the firms surveyed asserted that strong leadership was at the heart of their growth in 2014, while nearly three quarters (73%) agreed that their marketing & Advertising strategy was fundamental to success in 2014. In terms of what was likely to be important for sustaining or accelerating growth over the next twelve months, marketing and advertising (15%) was the most commonly cited component of the business that tech firms considered most important for accelerating or sustaining growth in 2015.
Sean Duffy, Managing Director and Head of Barclays’ Technology, Media and Telecoms team, said: “These remarkable growth predictions reveal the optimism and drive of the UK’s world-leading tech sector. The fact that many firms are expecting further growth in 2016 shows that this trend isn’t transient and the UK is a real launch pad for innovative tech businesses.
Investors are seeing the UK as an international talent magnet and a platform to grow or launch their business for a number of compelling reasons, including the culture, light-touch regulation, supportive Government policies and access to finance.”
When considering the challenges facing the business in 2015, increased competition (29%) and the ability to attract and retain talent (25%) were the most pressing concerns for business chiefs. Nearly half (46%) of all the tech businesses surveyed stated that the Government provides sufficient support in enabling them to grow. When asked about the financial challenges the business would face in 2015%, increased costs (21%) and managing cashflow (19%) were the biggest concerns for respondents overall.
Sean Duffy continued: “Strong leadership rang out loud and clear as being critical for growth, and this is particularly important in the first few years of a business’ life. It’s also even more relevant for fast growth businesses, which experience unique stressors and demands on their cash flow, requiring their leaders to make many major decisions at speed in order to keep pace.
It takes an extremely strong and dynamic individual to have a clear vision and the energy to lead their workforce to success in this type of supercharged environment.”