Barclays: UK Tech Leaders Signal Strong Local Growth

Confidence across the UK innovation economy is resilient as business leaders prioritise local expansion despite navigating complex routes to revenue. 

According to a report released by banking and financial services company Barclays, enterprise technology leaders are optimistic about domestic prospects.

The report shows that 71% of leaders are upbeat about their business prospects over the next year. 

This optimism translates to domestic expansion plans, with 56% of respondents planning their next major phase of corporate growth within the UK.

Cloud infrastructure demand surges

This positive mindset drives significant capital expenditure, with digital infrastructure emerging as the primary focus for technology spending. 

As enterprise firms scale, reliance on heavy computing capacity is accelerating across the sector.

The data reveals that 97% of leaders expect to increase their spend on compute, cloud or data infrastructure over the next year. 

Furthermore, 69% of respondents anticipate these infrastructure investments to increase by at least 20%.

Looking toward the next decade, 49% of leaders expect the UK to strengthen its position as a global innovation hub. 

Helena Sans, Head of Innovation Banking at Barclays UK Corporate Bank, explains: “It is encouraging that UK innovation businesses remain ambitious to scale within their home market. 

“The UK has strong foundations to support that growth, from world-class research and talent to deep sector and investor ecosystems, with a clear opportunity to help more firms grow and retain value in the UK.”

Procurement timelines challenge revenue predictability

While long-term confidence remains high, technology firms face operational challenges regarding enterprise sales cycles. 

Short-term revenue predictability is tracking lower as corporate clients tighten buying processes.

The report notes that 50% of business leaders report that customers are pausing or delaying spend, leading to less predictable routes to revenue. 

Procurement friction has increased, with 54% of respondents stating that procurement timelines have worsened over the last two years. 

Prolonged proof-of-concept requirements and extended pilot phases are also a challenge for 52% of businesses.

Public sector buying practices present further barriers to growth for scaling technology providers. 

A lack of transparency in public sector procurement is a key challenge for 28% of leaders, who note limited visibility over contract times and pipelines.

This lack of clarity makes it more difficult for commercial banks to lend against future revenue streams.

Helena says: “But as firms move from early growth to scale, access to finance is increasingly linked to visibility of future revenues.

“Where procurement timelines are unclear and pipeline visibility is limited, it becomes harder to lend against that future income, making greater transparency, particularly in public sector pipelines, critical to unlocking growth.”

Sub-sector performance shows market divergence

As procurement pressures build across the technology landscape, anonymised data from Barclays highlights divergent performance across specific sub-sectors.

While overall cash inflows into innovation business accounts declined by 4.9% year-on-year, deep tech and hardware segments continue to outperform.

Computer hardware businesses, including data centres, recorded a 7.1% increase in cash inflows and a 14.9% increase in international payments. 

Inbound international payments to innovation small and medium-sized enterprises (SMEs) rose by 2%.

This contrast with a 1.8% decline across general Business Banking SMEs suggests sustained international sales for UK innovation firms.

Loan volumes increased by 0.9%, with 29% of leaders stating that bank lending will be one of the most important methods for financing growth over the next 12 months.

This ranks behind private equity at 36% and Government grants at 33%.

Mark Northen, Head of Innovation Banking at Barclays Business Banking, says: “Many firms are taking a cautious approach to borrowing as they navigate slower routes to revenue and visibility barriers.

“At the same time, sectors such as defence infrastructure and computer hardware are showing strong growth potential.

“Ensuring businesses can access the right funding and expertise will be key to sustaining this momentum.”

Mark explains that collaboration across the technology sector remains vital to support domestic businesses as they scale. 

He says: “Our focus at Barclays is to bring founders, investors, corporates and policymakers together to focus on what comes next and on how the UK can translate innovation into real-world impact. 

“We are working closely with innovative businesses right across the UK to provide access to expertise and networks to build the ideal ecosystem to accelerate their growth from early-stage innovation through to global scale.”