The insights came from a survey of 250 business leaders, including CEOs, VPs, and finance heads, offering a snapshot of the UK's tech sector. The results will contribute to the bi-annual Tech Confidence Index.

Key Concerns

Business leaders identified major challenges for UK operations:

• Government policy (54%)
• Declining demand/sales (48%)
• Labour and skills shortages (43%)
• More than half (54%) felt the new government would have minimal or negative impact, while 43% expected a positive effect on the tech industry.

Business Outlook

Current business sentiment is mixed: 56% rate conditions as neutral or poor, while 38% view them as good. Looking forward, 60% are optimistic about the next year, with just 13% predicting a downturn.

Respondents were generally positive about their own company prospects, with 57% scoring themselves 7/10 or higher. The Tech Confidence Index reflects this, averaging 6.5/10 overall, with medium-sized firms peaking at 7.4/10.

Investment Priorities

UK tech firms plan to invest in the following areas over the next year:

• AI and GenAI (71%)
• Sales and marketing (44%)
• Business transformation (43%)

Top technologies driving business growth include AI/GenAI (78%), data analytics (60%), automation (46%), and cybersecurity (37%).

GenAI Contradictions

Leaders had mixed views on GenAI. While 55% are investing in it and 46% use it regularly, 65% believe GenAI has been overhyped, despite 40% seeing customer demand for GenAI solutions.

Georgina O’Toole, Chief Analyst at TechMarketView, commented: “One of the most telling results of the survey is that 71% of respondents are planning to invest in GenAI over the next 12 months, but only 43% say they will be investing in business or digital transformation. This also supports TechMarketView’s wider research, which suggests that GenAI is not currently viewed as the tool that will most readily transform businesses. The technology is seen as offering human augmentation to allow for greater productivity or efficiency, but not as a lever for massive disruption or change.”

Skills

When asked about skills shortages, 57% of those who had an opinion stated it isn’t an issue for their business currently, versus 43% who considered IT and skills shortages to be restricting their ability to compete or meet demand. However, there was a strong split between the size of companies, with 54% of large companies reporting a skills shortage compared to just 22% of those with fewer than 50 employees.

The survey also found that technical skills are in high demand, as mentioned by 69% of respondents. Within that, software development (19%), data and analytics (17%), and AI (13%) are the most frequently mentioned. Business and management skills were also in demand, being mentioned by 28% of respondents, with sales and marketing skills (15%) being the main driver in this area.