While 70 per cent of technology companies plan to increase UK investment, they are being hindered by "significant R&D challenges" and the digital skills gap, according to research from techUK.

The trade association found that its members place a high value on R&D, with 76 per cent saying it is important.

However the report revealed a number of barriers that are stopping businesses from meeting their R&D objectives.

These include difficulties in finding the relevant skills and talent to conduct R&D in the UK – 37 per cent – lack of options for financing R&D activities – 24 per cent - and lack of government support, such as R&D tax reliefs or R&D subsidies - 22 per cent.

“Despite strong growth in 2021, recent disruptions such as the supply chain problems, inflation, and energy cost increases are causing the UK economy to slow down its progress,” said Neil Ross, associate director of policy, techUK. “Against this backdrop, techUK members remain positive and are continuing to invest in the UK, helping to drive the wider digital transformation of the economy that will boost productivity and growth. Leveraging the UK’s digital sector will be vital to improving the wider economic outlook.

Ross added: “To achieve this, we must act to build the right incentives not only for digitally savvy companies to continue to grow but also to support all businesses across the economy to complete their digital transformation journeys. This means encouraging businesses to continue investing in productivity-boosting capital and machinery, not penalising businesses for going digital through an Online Sales Tax, and creating partnerships between Government and industry on regulation, emerging technologies, and digital skills.”

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