|
The UK
The UK is often considered to be the home of modern computi
ng, having developed the first “computer” called Colossus to decode “Enigma” transcripts during the Second World War. Often perceived as the bridgehead between the rest of Europe and the USA, while also representing a sizable market in its own right, the UK is one of the most successful locations in Europe for attracting software companies.
The UK Market
The UK population is just under 60 million but with a high density of that population living in London and the south east part of the country.
New technologies have transformed much of the business landscape. Software is central to work, leisure and communications and increasingly affects every aspect of living. The software industry now accounts for around 3% of the UK's gross domestic product or (£40 billion), and its impact is even greater as a source of innovation and new thinking.
The UK market has consistently performed better than the European average and this reflects the willingness of businesses in the UK to embrace the demands of technology spending. This is one reason why the UK has emerged as a key location for software investment, with all of the major global players now found here.
There are over 130,000 companies operating in the sector and over one million people are employed in Information Communication Technology. Of these there are over 100 who have Full London Stock Exchange listings and another 30 quoted on the AIM market. There are approximately 7000 UK owned Software companies of whom the vast majority turn over less than a £million.
For instance there are over 120 vendors of proprietary Accounting or ERP products. Another 60 have their own CRM solutions.
UK-The traditional Bridgehead
In short every major technology company has a presence in the UK. For many, expansion into the UK is the first overseas market, particularly for companies from North America. Why?
UK Economy and political system
The UK has enjoyed year on year growth despite the downturn in the technology sector. This is partly due the government sponsoring a complete revolution in all government departments whereby all communication externally could be conducted electronically by 2005. This has stimulated the technology economy in the UK to the tune of £5billion in 2003.
The UK is genuinely a free market economy that encourages open competition in the Commercial sector, which allows for a multitude of competitors.
Employment law is flexible and does not suffer from the restrictions incumbent in markets such as Germany or The Netherlands. Indeed the UK work ethic is to work long hours, but also enjoy healthy salaries and compensation. Salary levels in IT, as in all other sectors, have fallen dramatically, but, as is true elsewhere, good quality sales staff still command a premium.
The UK has been a world leader in the development of standards and best practice, including BS7799 that forms the basis for the international standard.
UK Strengths
Over 25% of new software projects come to the UK every year, which makes it a favourite for investors. In particular the expanding e-business and telecommunications markets have created many investment opportunities.
Within the software sector the UK is considered one of the most innovative and advanced. There are about 330,000 software professionals working in the UK, most of whom are high calibre graduates. Indeed many software firms originate from academic backgrounds, which explains the prevalence of research and innovation.
The UK government is a positive force in its fostering of new software technologies. This has largely been achieved by funding and by the establishment of over 60 science parks, which has resulted in greater collaboration between industry and the universities. Microsoft has located a research centre in Cambridge, and IBM’s development centre in Hursley is the largest in Europe.
Furthermore, the UK boasts technical and high-level management skills, a mature business infrastructure, flexible employment, access to the rest of Europe and for software, some of the highest levels of venture capital.
Entering the UK
Given the strong local and International presence of numerous technology companies, successful entry into the UK will be about how you position your technology in the market.
Despite the ready acceptance of US technology in particular, there are cultural differences within the UK that are quite marked and distinctive. Besides the numerous accents both Wales and Scotland have their own Parliaments.
Indeed Wales has attracted much overseas investment in Technology manufacturing with chip manufacturing and electronics industries in abundance.
Scotland too has attracted inbound investment, particular in Livingston, near Edinburgh where IBM has a large manufacturing facility.
In England US technology companies have gravitated towards the Thames Valley/M4 Corridor (Maidenhead, Bracknell, Wokingham and Slough), Cambridgeshire, Greater Manchester and the Midlands. However the indigenous UK software industry is scattered all over the country. Probably the only place where there are very few software companies (other than for financial products) is London!
Forming a Limited company can take twenty four hours but registering for VAT can take three months. Recruitment companies tend to work on commission on hiring and there are many serviced offices that can facilitate flexible requirements to meet the needs of start-ups.
London and the South East represent a significant proportion of UK business and despite the congested roads, the train system is relatively efficient, if expensive. The pound is strong currently and as many overseas companies entering the UK have found, if successful, it can be a real “Treasure Island”
These are just some of thee many excellent reasons why the UK is the first point of expansion and for more information on creating a subsidiary or setting up partnerships, SSP will be only too pleased to offer all the advice that you need to be successful.
SSP is continuing to help companies grapple with the challenges that confront software companies in today’s markets and further details on our search services, consulting and other services can be found at www.sspltd.com
|
