The growth rate of the UK tech market is likely to fall below zero at -1.4% owing to Brexit, said a report by market research company Forrester.
The UK will be among the four countries that will witness a negative growth rate in their respective tech markets. The other three countries to have a negative growth rate as per the ‘Global Tech Marketing Outlook For 2020-2021’ report are the Czech Republic, Mexico, and Italy.
Overall, the global tech market is expected to have a slow growth rate at about 3% in 2020 and 2021, said Forrester, in spite of the increased use of emerging technologies like AI and big data and the success of cloud vendors. The market research company indicated that slowing economic growth in the UK, the US, China, and other major economies has been a factor in the weak tech market growth rate. Tariff and trade disputes, political disruption in various parts of the world, and deflationary pressure have weighed down business investment and consumer confidence, said the company.
Forrester vice president and principal analyst Andrew Bartels said: “These concerns will cause CIOs and their business partners to adopt a more cautious approach to their tech spending, resulting in a slowdown in business and government purchases of tech goods and services from a peak of 5% in 2018 to 3.9% in 2019, 2.8% in 2020, and 3.1% in 2021, in constant currency terms.
“Measured in US dollars, growth rates will have wider swings, from 5.7% in 2018 down to 1.7% in 2019, then up slightly to 2.6% in 2020 and 3.2% in 2021.”
The report predicted that Western and Central Europe will see better yet weak tech market growth rate owing to uncertainties caused by post-Brexit and also trade impacts on France and Germany.
Forrester’s report follows the recently released findings from research carried out by Tech Nation and Dealroom for the UK’s Digital Economy Council.
In that study for the Digital Economy Council, the UK tech market has been found to have raked in £10.1bn ($13.2bn) in investments in 2019, in comparison to £3.1bn received in the year before. As per the report, the UK is only behind the US ($116bn) and China ($33.5bn) for the total venture capital funding secured last year.
Source: Government Computing.com