UK tech leaders back home turf for growth as AI drives investment
The UK is increasingly being viewed by its own tech entrepreneurs as the most attractive country in which to build and scale a technology company, according to a new report.
Barclays Bank’s latest Business Prosperity Index revealed that a majority of tech leaders now view Britain as offering stronger growth prospects than its international rivals in the US, Europe, or the Asia-Pacific region, suggesting a renewed confidence in the domestic market despite global headwinds.
UK tops global rivals
In a survey of 500 tech executives, 62 per cent voted that the UK is more attractive in this space than mainland Europe, while 61 per cent favoured Britain over the Asia-Pacific region. Meanwhile, 60 per cent preferred it to the US.
Respondents pointed out a strong customer base, skilled and diverse talent pools, and rapid consumer adoption of new technologies as the main differentiators.
These findings follow recent government data, which revealed a surge in UK tech entrepreneurship, with 14,262 new firms launched in the second quarter of 2025, a 16 per cent increase year-on-year.
Tech secretary Peter Kyle recently lauded Britain as poised to “overtake America” in some areas due to a more agile regulatory environment and the launch of the new Regulatory Office to streamline approvals.
AI investment accelerates
The report noted that AI remains the standout growth driver. While half of the surveyed firms said they planned to increase AI investment by at least 20 per cent over the next year, 95 per cent reported rising client demand for AI products and services.
Helena Sans, head of tech, media and telecoms and innovation banking at Barclays Corporate Bank, said: “There’s a clear sense that the UK is holding its own on the global tech stage.”
“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”.
As a result, Barclays has launched a £250m growth lending fund and established its Innovation Banking team to support scaling tech companies.
Sheetal Shinh, head of innovation banking at Barclays Business Banking, said that access to capital remains one of the most pressing issues.
“Whether it’s helping founders navigate their first funding round or connecting them to specialist advice, or Innovation Banking teams are here to unlock growth at every stage,” Shinh added.
Confidence, but with caveats
Barclays’ own client data demonstrated that the sector is showing strong short-term liquidity.
Savings balances for tech companies rose 21.5 per cent year on year, even as overdraft usage fell more than 26 per cent.
The shift signals greater confidence in cash flow and a move away from flexible, high-cost borrowing.
However, the report revealed that the barriers remain, with 40 per cent of leaders citing high fundraising costs, followed by 36 per cent quoting regulatory compliance burdens, and 33 per cent pointing to limited government grants as key obstacles.
Some 72 per cent said stronger government backing was needed to sustain growth, with calls for new funding programmes, better tax incentives for investors, and targeted grants for start-ups.
These demands echo recommendations from the industry body techUK, which in May urged ministers to put the technology sector at the centre of the UK’s growth mission, underlining the need for policy coherence and investment in digital skills.
Regional and global outlook
The government has also been pushing to spread tech growth beyond the capital.
The Regional Booster Programme, announced in July with £1m of funding, supports start-ups in hubs from the North East to Scotland through mentoring and investment promotion.
Ben Bilsland, head of technology at RSM UK, said the surge in company formations showed founders were no longer “waiting out uncertainty”.
“Entrepreneurs have realised the uncertainty is here to stay. Instead of waiting, they’re choosing to act,” he added.
Still, he warned looming changes to R&D tax incentives could dampen momentum if not handled carefully.
As global competition in AI and fintech continues to intensify, the UK’s challenge will be to match its entrepreneurs’ confidence with policy support.