UK tech firms looking abroad for sales, skills

The overwhelming majority of UK tech firms are looking to expand into new markets overseas in the coming year, according to research by business expansion consultants, Velocity Global.

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This year's State of Global Expansion Report – a survey of executives at 500 UK tech companies – found that 90 per cent were looking to expand overseas in the immediate future.With almost half of businesses citing Brexit uncertainty as a reason for looking at overseas opportunities, the survey found that Europe and Asia were emerging as key targets. The potential for future revenue growth was seen as greatest in Germany, France, Spain, Denmark, China, Japan and India.

Europe and Asia key markets

Surprisingly perhaps, only 12 per cent regarded North America as an attractive growth market, while only ten per cent were eyeing the Middle East. Velocity Global said the results also showed that "UK tech companies are looking to move quickly". At present, some 57 per cent of the firms already have a presence in one or more foreign markets, but this is predicted to increase to 87 per cent by the end of the year.Aside from immediate concerns about Brexit, just over half of the businesses said that plans for overseas growth were being driven by a desire to grow their customer base. Meanwhile, 41 per cent said they were looking overseas in a bid to find the right skills and expertise; a third said the drive was simply to upscale; 28 per cent said it was to access cheaper resources; and 12 per cent were looking at mergers and acquisitions.

Growth into foreign markets expected to almost double in five years

The survey showed that, on average, the businesses expected some 43 per cent of sales growth to come from foreign markets over the next five years.Ben Wright, chief executive of Velocity Global, said, “While the survey findings reveal an ambitious UK tech sector that is focused on international growth, it’s clear that the uncertainty surrounding Brexit is playing its role in accelerating those expansion plans.“The US and major Asian economies are often seen as top hubs for growing tech businesses. But despite the uncertainty around the UK’s future relationship with Europe, British tech firms see the region as the strongest platform to deliver future growth.”Official data shows UK tech businesses are increasingly exporting their services as well as setting up operations internationally. Tech sector exports were worth £39 billion in 2016, a year-on-year increase of more than 20 per cent, according to the Department for Digital, Culture, Media and Sport.Subscribe to Relocate Extra, our monthly newsletter, to get all the latest international assignments and global mobility news.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online Directory