The majority of UK tech companies are looking to expand overseas with many doing so primarily to access talent, according to a survey of senior decision makers at 500 such companies.
The polling by Velocity Global, a provider of global business expansion solutions, found that 42% of UK tech companies say their expansion plans are being driven by a desire to recruit the best global tech talent, with Europe (37%) and Asia (36%) seen as the most promising destinations to access new skills. China, Japan, Hong Kong, India, Germany, France and Spain were among those named as markets considered the most promising to capitalise on pools of talented workers outside the UK. Meanwhile, only 11% view North America as a strong potential market for the right recruits, and 6% the Middle East.
As many as 90% of UK tech firms are looking to expand their operations into new countries, with many planning to do so in the near future. Just under half (43%) of the companies surveyed operate in the UK only, but this is expected to fall to just 13% by the end of 2019.
Just over half (52%) of the businesses surveyed are planning to expand overseas to grow their customer base, with 43% saying their moves into new markets are being driven by the economic uncertainty surrounding Brexit.
“We know that the UK is among the best places in the world to set up a tech business but there is no escaping the issue of skills shortages,” commented Ben Wright, CEO of Velocity Global. “It appears businesses are thinking creatively, seeking to combine growth in new markets with the opportunity to hire their brightest talent.”
But not all of them were so bullish on overseas expansion. Of the 10% of tech businesses that said they were not planning to expand, more than half (52%) said seeking to expand globally is too risky.
Challenges that were cited included managing employee immigration (39%), recruitment (36%), managing unfamiliar payroll processes (26%), communicating with clients over long distances (23%) and a lack of government support (21%).
“It’s understandable that some businesses continue to have reservations about taking those first steps into unfamiliar overseas markets. Yet more often than not, the myriad opportunities outweigh the risks. And with the right advice and an expert partner on hand to simplify processes, it can be hugely rewarding and the route to future growth,” said Mr Wright.