Mid-market technology businesses in the UK are favouring domestic investment, new research shows.
A report compiled by professional services firm Grant Thornton shows that 75 per cent of medium-sized tech companies have no plans to invest in new markets in the next 12 months.
This follows on from the finding that 141 UK M&A deals were completed during 2011, a higher volume than in any other market.
Wendy Hart, head of technology at Grant Thornton, says investors in the UK’s technology mid-market need to think beyond ‘traditional’ investment regions such as the US, Australia and Germany, to seize opportunities.
‘Over the last five years the volatility of the global market has inevitably had an impact on the volume of cross-border deals taking place,’ she adds.
‘Traditional mature markets such as those in the G7 remain attractive to UK firms because of a familiar business environment, language commonalities and greater access to highly skilled employees.’
Outbound investment into economies such as India, China, Brazil and Israel is relatively low, according to Hart.
To highlight the ‘opportunities’ available, Grant Thornton has produced an ‘expansion index’ which compares existing UK mature investment markets with emerging economies.
Nick Farr, head of China Britain Business Services at Grant Thornton, adds, ‘One of the reasons that UK technology businesses are reluctant to enter China is a fear of copying or reverse-engineering of their products.
‘Whilst this is still a risk, as China’s patent system evolves there are increasing opportunities for businesses to protect their intellectual property.’
Recent research by the China-Britain Business Council shows that 59 per cent of UK businesses with a presence in China want to increase research and development activity there.