UK founders demand clearer AI rules & digital trust

UK entrepreneurs are calling for faster and clearer digital regulation as concerns rise over online risk, skills shortages and global competition.

New research from e-Residency suggests many founders are looking to the European Union for growth, even as they retain confidence in Britain as a place to start a business.

The study surveyed 250 UK-based entrepreneurs and small business leaders. All respondents run organisations with between five and 100 employees.

It found that 90% of respondents would still choose to start a business in the UK. At the same time, 57% said post-Brexit barriers made the EU more attractive for expansion.

Europe was the preferred region for international growth for 74% of those surveyed.

Competitiveness concerns

Most respondents remained upbeat about the domestic environment. The report said 77% felt optimistic about the UK's competitiveness over the next three years.

Many still saw an advantage in rival markets. More than half, at 55%, said digital-first company registration overseas gave other countries an edge. Half of respondents believed foreign visa and talent schemes were more welcoming for founders.

Digital infrastructure also emerged as a point of comparison. Founders said they were gravitating towards markets that combine strong reputations with reliable digital systems.

These systems covered digital identities, compliance tools and remote company administration. Respondents linked these tools with ease of doing business across borders.

Digital trust pressures

The research highlighted a sharp rise in digital risk. In the past year, 73% of founders faced at least one challenge linked to online threats or misinformation.

More than a quarter, at 26%, said AI-generated fakes or profiles had already damaged trust in their sector.

Digital trust is becoming a significant operational cost. Founders reported spending an average of 16% of their operational budgets on trust, verification and digital security.

Respondents viewed this area as central to competitiveness. Some 88% said digital trust would decide which startups succeed globally. A further 85% saw reliable digital infrastructure as equally important as physical infrastructure for business continuity.

Many placed digital trust alongside core business fundamentals. The survey found 84% believed digital trust now rivalled product quality or price in customer decisions.

Most respondents wanted a stronger state role. Some 84% said governments should take a stronger stance on digital resilience.

More than three-quarters, at 78%, warned that companies that ignore trust risk exclusion from key markets.

Liina Vahtras, Managing Director at e-Residency, said founders were making decisions based on predictability and speed.

"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. e-Residency is proof of how powerful that can be. When a founder can create and run a company remotely, with trusted digital identity and seamless compliance, it frees them to focus on growth instead of bureaucracy. With 79% of UK entrepreneurs saying government-backed digital infrastructure will determine who scales internationally by 2030, the path ahead is clear: trust, predictability and digital-first processes are the foundation of global competitiveness," said Vahtras, Managing Director, e-Residency.

Regulation and policy

Respondents expressed frustration with the current regulatory landscape. Some 70% said fragmented or unclear rules were slowing their ability to scale across borders.

Over half, at 51%, said faster and clearer regulation for emerging technologies such as AI and digital identity would increase their confidence in a market's ability to lead.

Founders also pointed to investment needs. Some 42% called for greater spending on digital infrastructure and research and development. A further 39% wanted stronger cybersecurity and digital resilience standards.

Government-backed digital infrastructure was seen as a decisive factor. The survey reported that 79% of entrepreneurs believed such systems would determine which companies scale internationally by 2030.

Skills shortages and strain

The report showed that growth ambitions sit alongside structural limits. Some 89% of founders said domestic skills shortages had constrained their growth. Nearly a third, at 29%, described the impact as critical over the past year.

AI and data science skills were in particularly short supply. These were cited by 79% of respondents.

Cybersecurity skills were another pressure point. Some 80% of founders reported shortages in this area.

Entrepreneurs also reported high personal strain. Some 95% said running their business affected their wellbeing negatively.

Within that group, 44% experienced stress or burnout often. Financial insecurity was a significant concern for 37%, who linked it to uncertainty over business survival.

Some 34% said they struggled to balance family or personal life with founder responsibilities. A further 18% cited isolation and lack of mentorship as ongoing obstacles to growth.

AI-first future

Founders expected the startup landscape to shift towards AI and borderless models over the rest of the decade. Some 75% said most startups would be AI-first by 2030.

Many saw AI adoption as a competitive necessity. Some 70% agreed that firms that do not adopt AI technologies within five years risk being outcompeted.

AI is already influencing business models. The research found 76% of entrepreneurs said AI was changing how they develop products and services. Some 71% said AI had opened new revenue streams or markets.

Respondents also expected company geography to change. Some 74% believed borderless companies, designed to operate globally from day one, would become the norm.

The same share expected digital ecosystems, rather than physical hubs such as London or Berlin, to dominate as the main startup centres.

The findings suggest UK policymakers face growing pressure from founders for clearer AI rules, stronger digital infrastructure and more predictable systems for cross-border business.