Artificial intelligence (AI) has been revealed as the most significant tech trend in 2023, according to a survey of over 100 business leaders in the South West.
The Tech From The Edge Report, published by Tech South West, reveals current trends, challenges and opportunities in the region’s tech sector.
According to the report, 68% of business leaders believe AI to be the most impactful tech trend in 2023, followed by cyber security (27%) and cleantech (24%).
“The rise of AI, and its implementation across multiple industries, is set to bring sweeping changes to the sector and society at large”, the report states.
The research also reveals that access to talent is the single biggest obstacle facing South West tech firms this year, with 72% of business leaders citing it as one of their top three challenges.
Economic conditions (71%) and access to finance (48%) are revealed as further obstacles to overcome if the sector is to reach its full potential. The sector is predicted to grow to nearly £20bn a year by 2026, creating 125,000 jobs.
Ben Cooper, director and funding lead at Tech South West, said: “In a year of rising inflation, tremors in the banking sector, political uncertainty, a cost-of-living squeeze, supply chain disruption, stagnating productivity and global energy crises, it is no surprise that tech leaders are casting a cautious eye on the economy as they lay out their strategies for 2023-24.
“However, disruption often creates opportunities and 2023 will favour those who are proactive in seizing them. With the imminent arrival of the £200m South West Investment Fund and the transfer of Tech Nation’s remit to Barclays Eagle Labs, the iron is hot for organisations looking to tap into new sources of funding and build relationships.”
Despite the challenges revealed in the report, 88% of surveyed businesses reported feeling “confident” or “extremely confident” about their organisation’s prospects this year.
Pippa Clarke, Head of Technology Innovation & Growth sector at Bishop Fleming, said: “A strong tech sector means a strong economy and opportunities for young people in the region, so it’s fantastic to see so much optimism in the sector in 2023.”
Amid economic uncertainty, a third of business leaders are more concerned about access to finance this year than last year, according to the report. This is a rise of over 50% from the results of the Tech South West annual survey during the previous three years, when concerns remained consistently between 16-19%.
These concerns have played out, with Beauhurst recently revealing that national investment in the first quarter of 2023 fell by 67.5% compared with the first quarter of 2022.
Commenting on the findings, Anthony Peake, CEO of Intelligent AI, said: “Accessing funds to grow while running a business can be incredibly challenging. At Intelligent AI we have secured approximately £3m in the past two years from VCs, Angels, Innovate UK, British Business Bank, European Space Agency, Microsoft for Startups and others. It hasn’t been easy, but then leading a startup in challenging markets is never easy.
“It’s great to see the work Tech South West is doing in this area to help founders know where and how to access the funds they need, and what types of funding are available.”
Tech South West works to support the tech sector and has over 3,000 members, with partners including Microsoft, Program, Bishop Fleming, Mercia, Ashfords and British Business Bank. The organisation is running a Tech Leaders Summit on 5 July with 100+ tech leaders in attendance, to facilitate knowledge sharing in the fields of AI, Talent, Funding, Founders and Innovation. Tickets are available at https://www.techsouthwest.co.uk/tech-leaders-summit-2023/
The Tech From The Edge Report can be downloaded at https://www.techsouthwest.co.uk/reports/