On 10 June 2025, Hawksford attended a roundtable discussion on “Driving the UK’s Digital Economy through Local Innovation” alongside government and industry leaders.
Hosted by techUK, the session unpacked how local innovation can drive economic growth and resilience in the UK. This was timely with the recently announced 11th Spending Review and ten-year Modern Industrial Strategy.
Through both, the government recognises the importance of the tech sector to the UK economy and is committed to boosting it further. The country is aiming to be “one of the top three places in the world to create, invest in and scale-up fast-growing technology businesses” by 2035.
The UK’s growing tech sector
Today, the UK has the largest tech ecosystem in Europe. The sector’s economic contribution exceeds £150 billion each year and employs more than 1.7 million people.
Crucially, investment in UK tech remains resilient. Venture capital activity has been particularly strong in cutting-edge fields like artificial intelligence (AI). In the first quarter of 2025 alone, UK AI startups secured more than £1 billion, the largest in three years.
At the same time, major multinational corporations are making significant commitments in the UK, reinforcing the country’s tech momentum. For example, Amazon announced plans to invest £40 billion in its UK operations over the next three years, in part to boost its AI computing capacity.
Such investments from global tech firms indicate confidence in the UK as a place to do business and innovate. Industry surveys also show that tech business leaders rank the UK above other markets such as Europe and North America for its ease of doing business.
Future government funding and innovation investment in the tech sector
To strengthen the UK as a global leader for tech ventures, the government has set out significant funding commitments in the Modern Industrial Strategy and the latest Spending Review. Both reinforces the priority given to maintaining and enhancing the UK’s competitive edge in tech. Some of the measures announced focuses on:
Channelling more investment
Research and development (R&D) funding is set to reach £22.6 billion per year by 2029/30. Another £2 billion is allocated for AI development through 2030, funding a 20-fold expansion of the UK’s AI Research Resource programme and support companies growing in the UK.
Additionally, up to £750 million is pledged for a new national supercomputer at Edinburgh University, set to be the most powerful supercomputer in the UK. This would give scientists world-class computing capacity for drug discovery, climate modelling and more. Similarly, significant funding is earmarked for quantum computing, including £670 million to accelerate quantum technologies.
A new UK Semiconductor Centre will also be backed by up to £19 million as a single point of contact for semiconductor firms to scale up, forge partnerships and strengthen supply chains.
Providing growth capital for UK tech companies
Access to finance for growing tech companies is being expanded dramatically. A new £4 billion Industrial Strategy Growth Capital initiative will invest across tech and another seven targeted sectors.
The government is also increasing the British Business Bank’s capacity to £25.6 billion so that more UK tech companies can secure the funding they need to expand. These measures may fuel the growth of companies establishing here and further strengthen the UK’s position as a global tech hub.
Building and developing tech talent
Moreover, the government recognises that human capital will be vital to sustained tech growth. Targeting global expertise, £54 million is set aside via the Global Talent Taskforce to attract top tech individuals to the UK.
£160 million is being invested in TechFirst, a long-term skills initiative. This will prepare the workforce for emerging tech, enabling UK companies to have access to people trained in AI and digital skills. Additional government funding will support partnerships between businesses and UK universities to develop new AI courses, fellowships and a prestigious AI talent scholarship.
Government support and incentives for UK tech business innovation
With global competition for tech leadership intensifying, the UK’s focus on enabling fast-growing businesses and fostering an innovation-friendly environment will be crucial in strengthening its competitiveness. As the abovementioned measures take shape, the coming years may offer not just a growing market but also one that is rich with support for tech companies.
If you're keen to enter the tech sector, the UK offers a comprehensive suite of tax incentives and government funding initiatives to support local innovation. These include the merged R&D expenditure credit (RDEC), which provides a 20% credit on qualifying R&D expenditure, as well as enhanced support for R&D-intensive small and medium-sized enterprises (SMEs).
Crucially for early-stage ventures, the Seed Enterprise Investment Scheme (SEIS) offers attractive tax reliefs to investors backing fledgling companies while the Enterprise Investment Scheme (EIS) provides similar benefits for slightly more established businesses. Both can significantly enhance access to growth capital to support your venture in the UK.
Additionally, the Patent Box regime offers a reduced 10% corporation tax rate on profits from qualifying patented inventions. Beyond these, you can compete for Innovate UK Contracts for Innovation to fund R&D projects and explore various benefits, such as enhanced capital allowances and business rates relief, available by establishing operations within UK freeports.
Hawksford's role in your UK tech company’s growth journey
If you’re looking to incorporate a new entity, our team can assist in your entry into the UK tech sector and help you take advantage of the tax incentives applicable to your business. With offices in the UK and other key business locations, we have the capability and availability to support your company growth and expansion. To learn more, please get in touch with us.
Speak to our experts today
Explore how our corporate services can elevate your business needs
