The impact of the coronavirus on the UK tech sector could lead to a significant disruption of the industry.
In this time of unprecedented uncertainty, a number of questions have been raised relating to the potential damage of the virus to the UK tech sector, the challenge of business continuity and innovation.
To help answer these questions and allay some potential fears, Information Age spoke to six leaders.
1. Will the UK tech sector shrink?
Rick Smith, MD of Forbes Burton, a company rescue and insolvency specialist, says it is “highly unlikely the tech sector in this country would shrink [because of the coronavirus].
Instead, he suggests this time of uncertainty is an opportunity for the tech sector to lead the way in thinking about how it can provide services and solutions when situations arise.
“The Prime Minister has called upon the tech sector to join in the Coronavirus fight, which many are taking literally with pooled resources among companies and their customers often creating interesting developments. For example, those who own 3D printing technology are providing components for medical equipment in case of shortages. In reality, the tech sector could ultimately grow as it provides ways to meet the needs and demands that are placed upon it by this unprecedented situation. Innovation is the mother of invention after all.”
Jon Wrennall, CTO at Advanced, shares this optimism. “There has never been a more relevant time for businesses to look to technology to enable the agility their organisations will need for the future,” he says.
However, according to Heather Delaney, founder and director and Gallium Ventures, there are many things to consider here, “as production has either slowed or stopped for many hardware companies while those with physical items sold in stores are currently being told by resellers partnerships are delayed as their own locations will close for a period of time thus slowing sales.”
To add to this, she explains that “start-ups going for funding rounds are now having to give themselves a longer timeline for this. Although ideas and innovation is still shining in the UK, the current state we are in as an industry will see many companies forced to push the pause button in order to stay afloat.”
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2. Where will the UK tech sector be compared to other global economies?
Unfortunately, this is only the beginning of what could be a very long, drawn-out crisis and as a result, only “time will tell as to when business can get back to normal, as it will depend on how the UK can control the spread of Covid-19 and manage the workforce compared to the rest of the world,” says Delaney.
Smith agrees that there might be some short-term disruption in investment and growth of UK tech companies as a result of coronavirus, but that “the progress and innovation that is made will help get the industry through this. In terms of overall size and worth, there will be some catching up to do to the US and China, but in terms of investment and advancement, we may well be leading the way for some time,” he believes.
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Matt Clifford MBE, CEO and co-founder of Entrepreneur First, the global talent investor, suggests that “early signs suggest that UK tech could be better off than other less mature global economies. Already the UK government is in dialogue with tech industry leaders to examine the role of UK tech during this crisis — most notably when it comes to public health. This represents a huge opportunity for technology to revolutionise the delivery of frontline healthcare, both during the pandemic and in future.
“If the aim is still for the UK to be a global centre of science and tech — as we were often told it was during the Brexit debate — then Covid-19 offers a significant opportunity for startups working in emerging technology fields. If the UK can demonstrate its willingness to invest in the deep tech space — in particular biotechnology and other healthtech applications — then the broader UK tech industry could have a real chance for ongoing global growth in future.”
3. What will be the impact on innovation?
Simon Platt, head of Development at Kwalee, the UK’s leading mobile gaming publisher, suggests that innovation will not be impacted too much if organisations keep in touch via “the great technologies we have available, like live video calls and screen sharing.”
He continues: “As soon as communication ceases, so does the innovation. We all need to keep in touch and collectively share ideas like we always would — and use technology to make it feel like we’re still in the same room as much as possible. If other tech businesses do this as well, and teams don’t become siloed in their own homes, then there shouldn’t be an impact on innovation.”
Delaney also believes that “innovation won’t die out, as people will still be generating ideas and creating at home, but now have the time to play around with bringing it to light. Although due to the pandemic, we can all expect those ideas to take longer than expected to reach the masses as the industry will need to get back up and running globally.”
Tech: not reliant on consumer spending
Clifford identifies that the most ‘at-risk’ sectors during this period will be those that are sensitive to consumer spending — that is, any business directly reliant on money coming through the door from households.
“Most deep tech companies, however, aren’t in that position. The other good news is that investors understand the patience required to build innovative companies based on breakthrough technologies. Particularly at the early stage, these companies are less reliant on consumer confidence and more on whether they can create something transformational over the long run,” he says.
“However, we will need to see a coordinated effort from multiple stakeholders — including investors, research institutions and public bodies — if this is going to continue. One of the key positives for UK tech is the overall sophistication and maturity of London’s tech investment and innovation ecosystem in particular. If we’re sensible, we should be able to shield UK tech innovation from significant damage.”
Will the coronavirus be an opportunity for the UK tech sector?
“The pandemic is showing us more than ever before, the sheer importance and value that tech has in running our businesses, our teams and our lives during such times of uncertainty. For many people, this is the first time they will realise the true power of tech in enabling aspects ranging from remote working to instant knowledge sharing. It could be a true shifting point in our attitudes towards tech-driven behaviour in the long-term, even after the virus passes. Companies in the tech sector will find this is a pivotal time to really speed up and ramp up their efforts to contribute to the shift” — Robert Darling, COO, eko.
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