UK entrepreneurs are pressing for more efficient digital regulations as concerns mount over online risks, skills shortages, and intensifying global competition. Recent research by e-Residency indicates that many founders are increasingly looking to the European Union for growth opportunities, despite maintaining a positive outlook on the UK as a business launchpad.
The study, which surveyed 250 UK-based entrepreneurs and small business leaders, found that 90% would still choose to start a business in the UK. However, 57% expressed that post-Brexit barriers make the EU a more attractive option for expansion, with Europe emerging as the preferred region for international growth for 74% of those surveyed.
Competitiveness remains a key focus for these founders. According to the report, 77% feel optimistic about the UK’s competitive landscape over the next three years. Nevertheless, over half, or 55%, believe that digital-first company registration in other countries gives them a significant advantage. Additionally, half of the respondents perceive foreign visa and talent schemes as more welcoming to founders.
The quality of digital infrastructure was another point of contention. Entrepreneurs are increasingly drawn to markets known for robust reputations and reliable digital systems, which encompass digital identities, compliance tools, and remote company administration. These technologies are crucial for easing cross-border business operations.
The research also highlights rising concerns about digital trust. In the last year, 73% of founders reported facing challenges related to online threats or misinformation. Alarmingly, 26% indicated that AI-generated fakes or profiles have already eroded trust within their sectors. This growing need for digital trust is becoming a significant operational cost, with founders allocating an average of 16% of their budgets to trust, verification, and digital security.
Respondents underscored that digital trust is now a fundamental aspect of competitiveness, with 88% asserting it will determine which startups succeed on a global scale. Moreover, 85% believe that reliable digital infrastructure is as critical as physical infrastructure for business continuity. Many founders now rank digital trust alongside core business elements such as product quality and pricing, with 84% stating it influences customer decisions.
The desire for governmental involvement is evident, with 84% of entrepreneurs calling for a stronger state role in enhancing digital resilience. A warning from over three-quarters, or 78%, indicates that companies neglecting digital trust risk exclusion from crucial markets.
Liina Vahtras, Managing Director at e-Residency, emphasized the growing emphasis on predictability and speed in business decisions. “Digital trust has become the passport for global business, and founders will cross borders in whichever direction offers certainty and speed. UK entrepreneurs are loyal—they want to build here—but they’re also realistic about where digital systems make their lives easier,” Vahtras said. She pointed out that with 79% of UK entrepreneurs indicating that government-backed digital infrastructure will be pivotal in determining which companies scale internationally by 2030, a clear path of trust, predictability, and digital-first processes emerges as essential for competitiveness.
Respondents expressed frustration with the fragmented regulatory landscape, with 70% stating that unclear rules hinder their ability to scale internationally. Over half, or 51%, believe that accelerated and clearer regulations for emerging technologies like AI and digital identity would boost their market confidence. Investment needs were also highlighted, with 42% advocating for increased spending on digital infrastructure and research and development, while 39% sought stronger cybersecurity and digital resilience standards.
The survey indicated that 79% of entrepreneurs consider government-backed digital infrastructure crucial in determining which companies will successfully scale internationally by 2030. Despite their growth aspirations, 89% of founders cited domestic skills shortages as a barrier to expansion, with 29% describing the impact as critical over the past year. Notably, 79% of respondents pointed to a lack of AI and data science skills, while 80% identified shortages in cybersecurity expertise.
This landscape has taken a toll on the well-being of entrepreneurs, with 95% reporting that managing their businesses negatively affects their mental health. Among those, 44% frequently experience stress or burnout, while 37% express concerns over financial insecurity linked to uncertainty about business survival. Further, 34% struggle to balance personal life with entrepreneurial responsibilities, and 18% cite isolation and lack of mentorship as ongoing growth obstacles.
Looking ahead, founders anticipate a shift in the startup ecosystem, with 75% forecasting that most startups will adopt AI-first strategies by 2030. Many now view AI not only as a technological advancement but as a competitive necessity, with 70% agreeing that firms failing to integrate AI within five years risk being outperformed. The influence of AI is already reshaping business models; 76% of entrepreneurs report changes in how they develop products and services, while 71% acknowledge new revenue streams or markets driven by AI.
As the landscape evolves, 74% of respondents expect borderless companies, designed for global operation from inception, to become the norm, shifting the focus from traditional startup hubs like London and Berlin to flexible digital ecosystems. These findings illustrate the increasing pressure on UK policymakers to address the urgent calls from founders for clearer AI regulations, enhanced digital infrastructure, and more predictable frameworks for cross-border business operations.
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