Cost of living crisis dealt another blow as tech leaders plan to increase costs to battle difficult economic climate; however, many are optimistic for 2023.
83% Tech Leaders Concerned About Looming Recession
A recent survey of tech business leaders has revealed that 83% are concerned about a looming recession. That’s according to B2B tech PR agency CommsCo, who surveyed 185 UK IT founders and leaders to uncover the concerns felt in the face of the current economic climate.
The survey reveals that 37% believe the economic climate is the biggest threat to their business, followed by staff retention (26%). Seventy seven percent believe the recession will affect investment in the tech market. Plans to protect against recession include increasing the cost of services (49%) and reducing marketing spend (47%).
On a positive note, 59% are optimistic for 2023, and 52% plan expansion in the next 12 months.
Forty five percent think remote working will have a negative impact in an uncertain economic environment, and that people need to be together in an office environment to ensure maximum productivity and collaboration. Forty four percent believe remote working is a positive change for mental wellbeing and potential office cost savings.
Leaders were completely divided when it came to advising other entrepreneurs to set up in this environment, with 47% believing they would encourage them vs 43% saying the opposite.
Unprecedented Times for UK Startups & Scaleups
In response to the survey, Adam Hale, Board Advisor for a number of tech companies, said: “These are certainly interesting times for startups and scaleups in the UK tech sector, with revised valuations, COVID, Brexit, war, rising prices, political instability and a looming recession. Recessions don’t have to be bad news, they are an opportunity for the best firms to demonstrate their market leadership and come out stronger. That means keeping closer to their customers than ever before and driving the quality of everything they do up, mistakes are not forgiven in a recession. Some companies will not make it, but as they say in a tornado even turkeys can fly.”
When asked what has been the single worst event for business, 43% respondents pointed to COVID, followed by Brexit (25%) and war in Ukraine (18%). The 46% that stated Boris was bad for tech business will be pleased with recent events.
CommsCo Founder and MD, Ilona Hitel, commented “Following a tumultuous couple of years for all sectors, the tech industry is ready for a difficult end to 2022. It’s a testament to the UK tech sector’s resilience and entrepreneurship that its leaders are still optimistic about 2023, despite the triple challenges with Brexit, the Ukraine War and the threat of looming recession.”