It’s hard to believe the official UK lockdown is just a week old. In the last seven days, and the period running up to it, life and business for all of us have changed unrecognisably. With hundreds of billions already pledged by the UK Government to support employers and employees, we asked the UK’s tech scaleups what kind of impact these measures will have for them, and what more could be done to protect and support a thriving tech industry, that by any metric is third in the world, behind just the US and China.
Of 116 scaling tech companies based right across the UK who answered our questions on the challenges facing their businesses during the early stages of the Coronavirus crisis, 77% reported that they expected cashflow to be impacted by recent events. 80% of companies said they expected securing new customers to become a challenge, with 40% of companies saying they planned to lay off staff.
“How do you see the COVID-19 pandemic impacting your business over the next few weeks/month?”
These figures while dramatic in themselves, also cause concern when compared to the answers given just a week earlier in our previous survey. Companies considering laying off staff rose from 15% in the first survey to 40% a week later. And concern over new customer acquisition rose to 80% this week from 44% the week before.
In terms of preferred solution tactics for the government to take, 46% of the companies surveyed would like the Government to provide loans, while 88% of companies wanted the Government to provide grants to help with cashflow constraints.
“What ways could your business be best supported by Government during the COVID-19 pandemic?”
The companies surveyed vary from the Bootstrapped to Series B+ venture-backed companies, with headcounts from single figures, up to 500+. 39% of those surveyed identified as startup or early stage, with 56% identifying as scaleup or mid stage, and 6% at late-stage growth.
The Government’s initial business support initiatives proved generally popular, with 60% of companies planning to access loan and/or job retention schemes. Of those companies, 57% plan to access a loan scheme, with 78% of companies planning to access the job retention scheme.
“Do you plan to access the Government’s main support schemes for business?”
But while we don’t see much variation in approach geographically (with 53% of respondents based outside of London), we do see large differences in responses by company growth stage. Of the companies surveyed, startups are much less likely to apply for the Government’s business support schemes than more established scaleups. 53% of startups do not intend to access loans or the employee retention scheme, as opposed to just 26% of scaleups.
There are large and clear discrepancies here, and these results and sentiment are being fed directly back into government. A number of active policy proposals are in discussion to bridge any support gaps in the UK tech ecosystem, with some of these outlined in Tech Nation CEO Gerard Grech’s Coronavirus blog, updated daily.
In the meantime though we asked you how Tech Nation can support your tech business during the Coronavirus pandemic. And we’re working hard to deliver on your requests. Providing some much needed clarity on Government business support and policy and curated community resources, our Coronavirus info hub is live and updated daily. We’re shifting all of our programme delivery online, with webinars and teleconferencing, and we’re getting better at it every time. Our Entrepreneur Engagement Managers may no longer be in co-working spaces across the country, but they are still keeping their local ecosystems informed and supported; follow your local EEM and get in touch. Our insights team will continue to monitor UK tech from a quantitative perspective, informing how we best support UK scaleups, and keeping policymakers informed of change. And from our blogs to newsletters, we’ll be keeping you up to date on all of the above over the coming weeks and months.
“How can Tech Nation help support your business during the COVID-10 pandemic?”
The openness and collaboration we’ve seen in the ecosystem so far have been inspiring. Tech’s resilience and adaptability are well known. UK tech’s community and generosity soon will be.
Also big up the NHS x