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August 20th, 2009 by Chris Measures

Tech investment goes regional

For those searching for green shoots of recovery, new research from investment advisors Ascendant provides positive news. Investment in UK and Irish tech businesses hit £129m in Q2 – up from £115m in Q1.

What is more interesting is where this investment is going – and where it is coming from. The market for raising large chunks of money has collapsed, with a 61 per cent drop in companies receiving more than £5m. In contrast, there has only been a 9 per cent drop in deals under £5m. Clearly, smaller companies are having more success at finding investment, which is backed up by a quick look at the sources of money. Private angel investors and regional development agencies/government funds are maintaining their level of investment while larger VCs cut back.

This has far-reaching potential implications – regional investment could redraw the country’s tech map and create new funding hotspots for emerging technologies. Definitely a trend to watch as we come out of recession………

July 24th, 2009 by Chris Measures

Is the election going to slow down IT recovery?

Optimistic market watchers are talking about the green shoots of recovery sprouting properly in 2010 but I think when it comes to IT they are ignoring the election effect.

We know there’s going to be an election in 2010 and equally at the moment the Tories look odds-on to sweep to power. What does this have to do with IT spending? Well, typically tech vendors look to the public sector to keep them afloat in lean times while they wait for corporate spending to step up.

The problem now is that the Tories have made big noises about cutting back public spending, particularly when it comes to quangos and high profile/high cost programmes such the NHS Connecting for Health IT project. And such is their lead in the polls no-one (vendor or civil servant) wants to commit to IT projects that will be canned by Cameron and potentially end up out of pocket or work respectively. One of the key reasons for stopping the ID Card project in its tracks was no IT vendor would take it on and set themselves up to fail.

So this lack of public sector contracts will force the IT sector to sit tight until companies (and government) begins to spend again – delaying recovery through institutional sclerosis, which doesn’t benefit anyone. Time for politicians to outline how they will use technology to help us improve public services and move us out of recession.