We've built up a £1.5bn software business. Why have so few other British tech firms succeeded?

We have always taken pride in our independence, as well as our technology, and, from the start, were ambitious to work with our customers on a global basis to become an industry leader. Key to our success has been high levels of ongoing investment to continuously develop new products and a customer-focused organisation that can sell directly across the globe. Our products are complex; our projects are huge and critical. We do not take short cuts and rely on distributors.

So, how does a company based in Cambridge sell, support and build a dominant position in a market on the other side of the world? The answer is not as difficult as many companies fear when they look overseas. Listen to customers and give them what they need; be very demanding in getting a fair reward for investing in product development and local assistance; visit customers regularly.

Making customers believe in you is about convincing them that your company is there for the long haul alongside them. They are nervous about changes of ownership and management, so communicating a clear vision was an important component in building the long-term partnerships that are the bedrock of our business.

Implementing that vision often involved setting up offices in markets during recessions, both to capitalise on good deals for office space and an available pool of talent. This also sent a message that we intended to be alongside our customers forever. We worked hard on our reputation locally by demonstrating that our product quality and reliability were second to none. As a result, our best sales people became our customers.

Sadly, politicians in the UK don’t always make our job easier, at either a local or national level. Cambridge is an important hub for technology entrepreneurship, but the local infrastructure and transport links make it difficult to expand.

On a national level, the huge regulatory burden from London and Brussels makes locating here less and less feasible. AVEVA is a global business and we can establish research and development centres anywhere with talent. Universities across the world are producing the engineers we are looking for, often in far greater numbers than in the UK. High rates of income tax make the UK unattractive for the globally mobile talent at the heart of our success. Politicians need to weigh up the impact of higher taxes very carefully if they want global companies to thrive; they are a major disincentive to our top people locating here. If you are a mobile software engineer, wouldn’t you rather work in Singapore, where you pay income tax at 20pc?

We look internationally to take advantage of those governments which nurture world technology leaders. In Korea, we wanted a sales and customer service organisation, but the authorities in Busan, the country’s second largest city, were so helpful getting us started that we decided to take full advantage of their heavily-subsidised office rental. We now have a research and development centre in Busan, as well as the large local support team first envisaged.

Home Secretary Theresa May should take note that if you invest in Korea you get the same privileges as a diplomat, with a separate airport lane to fast-track through immigration. What a contrast to Heathrow.

In India, we are establishing a large research and development centre in Hyderabad, which is in a special economic zone offering tax incentives for software companies. This means that within a year we will have more staff in India than in any other country. In the UK, software development was specifically excluded from the Patent Box introduced by the Government, which applies a lower rate of corporation tax for profit from innovation.

When we first established a presence in Kuala Lumpur, we were not only given valuable tax breaks but also an unlimited supply of work permits which were fast-tracked. As a result, several of our UK employees relocated and most have stayed to work in a much lower-tax environment. By contrast, in the UK we find it almost impossible to bring in talented non-EU colleagues to work. This severely handicaps us from developing our operations here.

Emerging British technology businesses need to take a long-term view, but they also need a government that gets out of the way.

Thomas Edison said: “Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.”

I couldn’t put it better.

Richard Longdon is chief executive of AVEVA Group

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