The media and tech industry has emerged as one of the more robust sectors of the UK economy since the coronavirus pandemic hit in March 2020. With almost the entire country working remotely and spending their leisure time at home, a surge in demand for digital tech and entertainment has been great for many businesses.
But even those firms that have performed well have faced significant challenges. How has the sector coped, and what might the future hold?
RSM Partner Simon MacDonald asked three very different tech start-up clients how business is looking, and what impact the coronavirus pandemic has had.
How has the tech industry responded to the coronavirus?
In October 2020 RSM found the number of new UK tech start-ups had risen by almost 16 per cent, and a total of 10,435 software development and games businesses have been incorporated so far this year.
For a number of tech companies the coronavirus and subsequent lockdown has been the shakeup needed for their tech to thrive. Being away from colleagues, clients, friends and family has highlighted how important technology is in keeping us connected. Businesses globally are turning to technology they can trust to help get them through this period of time.
‘The lockdown has pushed our customers towards digital first solutions that are resilient and can be orchestrated remotely, which is where businesses like us can really deliver,’ said Gavin Youll at Nivaura, which provides SaaS solutions for the fintech sector.
How have tech start-ups fared?
‘There’s never a good time for a pandemic,’ said Roger Goscomb, CFO and COO at digi.me, a tech start-up that specialises in consented private sharing software applications. The considerable professional and personal stresses have had an impact on businesses everywhere, whether that is experienced in difficulty getting new funding or through clients becoming more cautious.
But digi.me has remained busy, so much so that furloughing their staff was not an option. ‘2020 has been a very busy year for us and we have needed our staff to carry on working,’ continued Roger.
Supernova Capital, which invests in computer games companies, saw games sales rise by a hugely encouraging 50 per cent. Chis Sharp, Supernova’s Finance Director, said: ‘It was about the immediate availability of our games. People wanted entertainment but also a way to engage with their community – and games present that platform’.
Although each business Simon spoke to has had its own unique experience of the pandemic, all three felt cautiously optimistic about the future of their start-ups and have not had to change their overall strategy.
What has been the biggest impact of the pandemic?
All three of the businesses we spoke to considered the impact on their people to be their top concern during lockdown.
‘We work in a creative, collaborative industry which requires us to spark off each other. Working from home and not having access to that organic creativity has been a challenge,’ said Chris from Supernova. ‘The games industry tends to attract really passionate people whose personal lives are intertwined with their professional ones. So, when you take away that physical communal space it’s going to hit morale.’
Start-up companies naturally attract talented people who live and breathe what they do. The sense of community that fosters is important to start up teams. Not being able to physically work together has presented a real challenge.
Digi.me decided to implement a working from home order before the national lockdown was announced and fostered a ‘one team’ attitude. Staff understand they were all in it together and successes or struggles would be shared. Digi.me felt their ‘one team’ ethos definitely helped negate any potential dip in morale from lockdown and remote working.
What has been the biggest take away from the pandemic?
In terms of actually continuing to be productive in a working from home environment, all were pleasantly surprised despite the creative challenges.
‘Previously there was the attitude that everyone has to be in the office for things to be able to work but, as many others have found out, that is not the case and so for us going forward we are expecting that to change. We are expecting that shift to be the biggest long-term impact,’ said Chris from Supernova.
For Nivaura, the future looks likely to be an embrace of the working from home style. They are considering alternative styles of engagement, such as, more regular team away days, or a socially driven collaboration were two of the ideas on the table.
When Simon asked what they have learnt from this experience, each of our interviewees said that lockdown has disproved the idea that everyone has to be in the office all the time for things to work properly. It may be that the lasting impact of the pandemic will be presenteeism becoming a thing of the past.