Technology
Industry Outlook
2026
Introduction
Times are changing in UK tech. AI is driving growth and attracting investment but also introducing workforce challenges. Against this backdrop, we spoke to 300 tech business leaders to find out what’s working in UK tech and what’s not.
The UK government has put the technology industry front and centre. It has developed a Science and Technology Framework and a UK Compute Roadmap. And it has rolled out the red carpet for investment from the US tech giants. The strategy is already paying off, with Microsoft, Google and more pledging £31bn in capital as part of the UK-US Technology Prosperity Deal.
Even before that boost, economic conditions in the UK have been broadly improving. Growth so far in 2025 has been a step up from the near stagnation seen over the last few years. However, high inflation and speculation about the autumn budget risk putting the brakes on the economy towards the end of the year.
was invested in British AI companies last year
A big increase in taxes next year means growth in 2026 is likely to slip below 1% again. The issues are most obvious in the labour market where the unemployment rate has risen to the highest since mid-2016. However, there are still ongoing workforce challenges. The adoption of AI has amplified the lack of skills in certain areas and led to morale-sapping redundancies in other departments across the sector
Ultimately, our annual survey of tech businesses in August 2025 found that companies are more confident, targeting growth, less worried about debt and clear about the barriers to progress they would like to see removed.
After the challenges of the past few years, RSM believes UK tech businesses are leaner, more strategic and ready to grasp the exciting opportunities ahead.
