February 27, 2019 Last updated February 24th, 2019 2,043 Reads share

The Difficulties Facing UK Start Ups in the Current Economic Climate

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Entrepreneurs wishing to get a tech startup off the ground in the UK have to face many challenges, and many reported difficulties with funding, digital infrastructure, and support for their business. As expected, many of these startups end up failing within their first year of operation.

Lack of Government Support

According to Eddie Copeland, head of technology at Policy Exchange, the government must remove all bureaucratic obstacles to starting a business. It must also remove anything which prevents startups from receiving support from the tech industry. Copeland adds that the government must also learn from entrepreneurs on how best to support them.

According to Close Brothers Asset Finance in their recent survey, 42% of UK SMEs feel that the UK is not doing enough to foster and encourage entrepreneurs. Copeland cites funding tech clusters as a good place for the government to start. The other would be to provide more resources for startups to secure funding, citing Israel and Finland as examples.

The strength of Tech Clusters is Not Harnessed Outside of London

Copeland says that more tech clusters need to set up shop in London’s Silicon Roundabout. According to him, the Roundabout’s attractiveness lies in two things. One is its affordable rents and two, it brings together tech clusters. And this critical mass is necessary for innovation he adds.

As startups grow and become big businesses, they usually need more office space. And Copeland sees this happening in London. In fact, he warns that London is quickly becoming a victim of its own success. He adds that the only way to deal with this growth is to harness and develop it in other centers around Britain. Examples of such centers are Cambridge, Leeds, Cardiff, and Edinburgh to name a few.


Intellectual Property (IP) is Not Protected Enough

Anne Campbell, an attorney at Mintz Levin Cohn Ferris Glovsky and Popeo, sees IP as a way for businesses to make money from their innovations. She says that businesses protect their IP to get a return on their investment. And this is true. Innovation requires a lot of money for research, equipment, office space, and human resource.

Campbell further sees IP as crucial to the UK’s competitiveness in the global market. This is because Britain is lagging behind the US, China, and Germany in the number of patents filed. She advises tech startups to consult a patent attorney to identify the IP that is best for them. If they are short of funding, there are government grants for IP she adds.

Pressure on IT Infrastructure

Broadband Delivery UK has invested £1.5 billion in digital infrastructure around Britain. Virgin also plans to invest £3 billion in the next few years. The City of London has announced plans to sink £8 billion into IT infrastructure by 2050.

But Anthony Impey, the founder of Optimity, is not impressed. He says that these figures are not as impressive when taken in context. For instance, the £8 billion the mayor intends to spend accounts for only 1% of the city’s budget. Considering the importance of digital infrastructure in today’s world, this percentage is just too small.

Impey also adds that the infrastructure is not readily available
. The waiting period for a fast connection is long. And this puts London at a disadvantage. A report by Tech London Advocates claims that broadband is one of the issues hindering the growth of tech startups in London.

Embarking upon a digital startup in the UK today is not easy. And it will remain so until the government provides more support. Business owners must also protect their IP and develop their clusters around the country. Finally, companies and the government must invest more in digital infrastructure.

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