The vast majority of UK tech startups are confident about their growth prospects over the last year, despite a drop in the number planning to hire staff or raise finance.
This is according to Studio Graphene’s Q2 2019 Tech Tracker, which found that 80% of tech startups were either confident or very confident about their prospects for growth over the next 12 months. This represents a small increase of 1% from Q1.
However, while UK tech startups are positive about what lies ahead, that isn’t translating into increases in hires. While 73% of such startups say they intend to hire more staff over the next year, this represents an 18% drop from the previous quarter.
Raising finance has also seen a decline, dropping 7% to 59% of startups.
Concerns over hiring suitable candidates remains a key issue for tech startups, reflecting a skills shortage faced by the entire technology industry with 54% seeing this as an obstacle to growth.
Political upheaval divides UK tech startups
Current political upheaval in the UK, notably the ongoing issues surrounding Brexit and the current race between Boris Johnson and Jeremy Hunt to become the next Prime Minister, has not resulted in confidence issues faced by some more established industries.
UK tech startups are divided over whether the outcome of the Johnson-Hunt race will have an impact on their future growth, with 51% believing it will, while 49% think it will not make a difference.
“The quarterly Tech Tracker survey was designed to help us monitor the confidence of UK tech startups. And it’s positive to note the vast majority of these businesses remain optimistic about their growth prospects for the year ahead regardless of Brexit and the Hunt-Johnson showdown,” said Ritam Gandhi, founder and director of Studio Graphene.
“However, the slight dip in the number of companies seeking investment or planning to hire more people should sound a warning that the on-going political and economic uncertainty is resulting in a slightly more conservative approach among some entrepreneurs.
“Clearly, startups need clarity on the country’s future if they are to effectively shape their own – the government must recognise otherwise both our tech startups and the wider economy will suffer.”