Entrepreneurs are investing more in technology than people, new research suggests.
Technology assets will account for most business investment over the coming year, according to a yearly poll by E2Exchange, an entrepreneur network.
In fact, managers are spending more than a quarter of their company financing on these in preference to staff or other business infrastructure.
The poll shows how firms welcoming the swift-paced digital revolution are vital to fuelling performance as the planet becomes a more connected market with globalisation and advanced technology.
Entrepreneurs are calling for a Government-supported bank specifically aimed at tech firms, the study found.
The report also goes on to indicate that a fear of failing and a perceived lack of Government help are holding small businesses back.
What else did the report find?
– one in two speculators polled expected that tech assets would account for over 50% of overall business investment
– one in four entrepreneurs forecast that they would spent between half and three-quarters of their investment on such assets over the coming year
– it also found that 65% of people surveyed have not utilised crowdfunding as a means of alternative fundraising and don’t intend to over the coming year. This is surprising, given that access to finance is still one SMEs’ biggest obstacles to expansion, the report’s authors claim
What were the main negatives from the poll?
– a huge majority (78%) think the country’s risk-averse outlook and fear of failing is holding back SME expansion
– six in 10 entrepreneurs believe that their ilk are cashing in prematurely before their businesses have time to fully mature. This is the proportion who believed that tycoons would prefer playing safe and selling up for £10 million to growing it into a £10 billion business
– almost four in five businesses polled think tech clusters need more help from private business and the Government. Speculators want ministers to launch a sector-specific state technology bank to offer funding choices, such as straight investment in firms
What is the main positive from the poll?
Well over half of entrepreneurs (65%) have begun to recruit once more in the slipstream of more optimism in the UK economy since coming out of the recent recession.
The poll’s authors claim that more needs to be done to help growth firms, even though the UK’s entrepreneurialism is today at an all-time high. E2Exchange CEO Shalini Khemka said that the digital revolution had “fundamentally transformed” start-ups and SMEs and the way they do business.
Khemka said it is “deeply encouraging” that these sectors recognise and are reacting positively to technological advances by synching business models to meet this trend. The expert warned, however, a very British-specific fear of failing is deterring firms from taking risks which could eventually lead to their success.
Khemka called for a change in culture with more support from private businesses and the Government alike. Only last week mobile firm Truphone urged UK firms to invest more in technology to help growth.
Posted by the Secret Businessman