Business leaders are overwhelmingly confident about their company’s growth prospects over the next year, with the majority looking to new technology investments as a top priority, according to data from KPMG’s inaugural Private Enterprise Barometer 2025. 

The report, based on a survey of 1,500 business owners and leaders around the world, found that 92% are optimistic about the near future, with over half (52%) citing increased demand as a key driver for growth over 2025, followed by plans for introducing new tech (43%), and entering new markets (43%).

According to KPMG, this positivity reflects firm’s renewed focus on new opportunities and innovations following the challenging economic circumstances weathered by many in recent years, evidenced by the 42% of leaders who said they are more assured by the UK economy, and the 54% that are choosing to finance diversification.

Technology tops the list in terms of investment intention, cited by 63% of executives, with AI continuing to dominate most firms’ strategies, as three-quarters (73%) of leaders plan to invest more in AI solutions, trying to both keep up with the relentless developments offered by automation, as well as maintain relevance in fear of being left behind.

Those motivations are particularly acute in the technology sector itself, with 81% of tech executives planning to launch new services or products this year, pushed by the ongoing demand for hardware, software, and IT services.

Scottish tech firms are leading the way here, with well over half (57%) of leaders committed to investing in innovation – the highest number KPMG found across the UK –  however, they are also the most likely to be concerned about the impact of the UK Government’s Budget on their profitability over 2025 (42%).

“The UK private enterprise technology sector will need resilience and adaptability, as well as a supportive policy and regulatory envrionment, to keep punching its weight and compete in what is a truly international digital market,” said Joe Cassidy, head of TMT at KPMG UK.

At the moment, however, the increasingly complex regulatory environment is causing firms to scramble to keep up. 

While lower than other areas, compliance was named as an investment priority by almost a third of firms (29%), with business leaders looking to increase the efficiency of their reporting and compliance measures (60%), as well as strengthen internal controls (48%), while 40% said they were acting due to a renewed focus on ESG agendas within their firm.

The study found that sustainability is even more important than compliance, with 44% of firms naming it as a priority for investment, with a focus on improving Environmental, Social and Governance (ESG) standards through the use of sustainable materials (60%), supply chain management (56%), and energy usage (53%).   

KPMG said that this could be due to businesses coming under more pressure to meet ESG requirements from their clients as the EU’s Corporate Sustainability Reporting Directive continues to be slowly rolled out to larger companies, as evidenced by the 31% of executives who cited customer relationships and brand association as the main benefit of ESG investment. 

Recommended reading

• 58% of Large FS Firms Hit With Supply Chain Attack in 2024
• DORA Compliance | UK Supply Chain Doubts Persist
• Cyber-attacks on the Tech Supply Chain Spiked in 2024

However, the report notes that ESG investments are seen as crucial for shaping partnerships and M&A strategies (25%), while building a strong sustainability profile is also linked with the attraction and retention of staff who care about these issues, cited as a top priority for 17% of firms.

“Even though many private enterprises are not yet obliged to do so through regulation, they are making the decision to invest in ESG as a source of sustainable value,” said Richard Andrews, head of ESG at KPMG UK.

“At the same time, the pressure to take the lead is rising as ESG considerations spread across value chains. This will be a big area going forward – and a major item of the boardroom agenda.”