At Hawksford we offer tech organisations a full suite of corporate services including company secretary services, company directors, bookkeeping and accounting services, with control of relevant companies in their local jurisdictions. We are also experts in multi-jurisdictional structuring and have extensive experience in providing services to entrepreneurs and tech companies which need innovative structuring services and reliable governance support.
At the start of 2020, Hawksford was already gearing up for a significant growth in the tech sector. However, the Covid-19 pandemic arrived and significantly impacted the sector. This global tragedy forced the world into distanced environments which has had the knock-on effect of giving tech companies significant opportunities for growth.
We recently sat down with fellow industry expert, Russ Shaw, founder of Global Tech Advocates, one of the only international grassroots tech community that brings together the private sector in multiple cities and regions worldwide. He shared his insights with us on how the pandemic has affected the industry and what the future could look like for the sector.
What factors do you see as driving growth in the tech industry right now?There has been a seismic shift in the way people work. Unprecedented levels of home working, which is predicted to be a long-term shift, has driven a huge increase in demand for tech such as FinTech and HealthTech. EdTech is also in great demand as increasingly education is delivered remotely. It has driven more traditional industries and sectors to look at how they can digitise more of their processes.
Last year, I interviewed 25 IT business leaders from across the globe and they are all seeing the same trend; businesses prioritising IT spend over spend on their real estate portfolios. It may have been a challenging environment for start-ups, but for scale ups there is a real opportunity for tech firms to realise their growth strategies.
What are the biggest challenges facing tech scale ups today?
Global Tech Advocates has been working with investors and leaders in the tech sector all over the world and we understand the challenges are multiple but not insurmountable. It comes down to having the right support from organisations like Hawksford.
For example, being reassured that the executive team and the board is receiving the best tax policy advice and assistance against a backdrop of the ever-changing regulatory environments of jurisdictions all around the world is a real challenge for tech companies looking to expand internationally.
In general, geography is a concern, as is answering questions such as ‘where to go next?’ or ‘Does it feel daunting scaling up in Asia, as it is physically so far away?’ The geography needs to be influenced by the needs of the business and by sourcing the right expertise in that jurisdiction, it can be as easy as scaling up in a second UK city.
What do you believe investors look for?What higher tier investors look for in the balance sheet, strategy and executive team of a tech scale-up is fundamentally different from how they evaluate start-ups. Larger, more complicated businesses need formal, rigorously tested and sustainable finance and administration practices and they need to prove they have carefully considered the jurisdictions in which they operate.
Tech founders who’ve enjoyed freedom from oversight must learn to suppress their self-sufficient problem-solving habits and seek help. The global tech sector is home to a range of experienced and knowledgeable support, with which businesses can establish a far more secure basis for long-term success.
Why do tech businesses look to alternative jurisdictions and where do you think are the next up and coming tech hubs?There are a number of factors that influence a tech firm’s strategy and need to expand into new hubs as part of their growth such as access to infrastructure, access to venture capital, regional and governmental incentives, networking potential, access to a trained and talented workforce, attending accelerators and the cost of doing business to name a few.
Although there are many incredibly well-established tech hubs around the world, there are also many more gaining strong reputations. Here at Global Tech Advocates, we have seen many of these hubs first-hand, launching new networks in a number of them. We see the USA as continuing to be the number one tech hub, followed by China, both of which continue to grow rapidly and are widely revered thanks to centres such as Shanghai, Beijing and the Greater Bay Area. However, there are at least 20 to 30 second and third tier Chinese hubs also developing their talent pools and infrastructure. India, through Bangalore and Mumbai are also key as is Singapore with an emphasis on FinTech. Japan is a solid tech hub, which boasts strong ties to the UK. In Europe, London remains the most highly rated tech hub, followed by Paris, with many more in both Eastern and Western Europe gaining strong reputations.
What advice would you give to a tech company founder looking to scale up?
Growth isn’t all about investors and accessing capital, it is about governance, attracting local talent, preparing for the future (is there an IPO on the horizon five years in the future?) and outsourcing the administration. All of this enables firms to grow because the board and the executive team can focus on what they do best.
Any business looking to expand into new jurisdictions, regardless of their sector, needs to make sure they have access to the right guidance, expertise and on the ground support to make their plans become a reality. This is also true for tech firms that are looking to scale, raise capital or sell. For many scale-ups, growth can be quick, requiring extensive investment and be draining on the resources of an already busy team. Plus, by the nature of their work, innovative ideas are not necessarily au fait with local regulatory requirements – having the right partners and network around them can really make a significant difference to their fortunes.
Here at Hawksford, we are able to offer our clients extensive expertise and experience in helping them achieve these goals. For example, when Two Rocket backed companies - Digital Services SG FIVE and BlueNest - wanted to expand into Asia, we aided their operations by preparing financial accounting reports, overseeing the care of their payroll and completing the tax filing. This went beyond alleviating administrative burdens so they could focus on growing their business. We pride ourselves on working with our clients as partners, providing advice and organisational support with on the ground knowledge to help break down barriers to expansion and investment.
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