UK tech sector: Do you believe in life after Leave?

EU exit UK tech sector

The British public has spoken! After months of uncertainty, speculation and debate, it was decided that we will leave the European Union, a choice that’s ushered in… well, more uncertainty, speculation and debate, of course.

But is Britain sailing into dangerous, uncharted waters with no captain in sight, or are we finally liberated, free to carve our own path to greatness once more? Whatever your persuasion, there’s no escaping the fact that nobody’s quite sure where we’re headed.

As everything from legislation to free movement is thrown under the microscope, no aspect of British society will be exempt from the repercussions of this decision, good or bad. And the UK’s tech industry is no exception.

But does Brexit necessarily mean Techxit for the UK?

Skills

Whilst we are the leading digital nation in Europe, it’s no secret that Britain leaves a lot to be desired when it comes to nurturing and honing digital skills. So much so, in fact, that earlier this month The Science and Technology Committee published a report on the digital skills shortage urging us to address the shortage before we fall too far behind. Nicola Blackwood MP, Chair of the Science and Technology Committee warned “The UK leads Europe on tech, but we need to take concerted action to avoid falling behind. We need to make sure tomorrow’s workforce is leaving school or university with the digital skills that employers need.”

As a member of the European Union we were able to tap into a rich vein of talent across Europe to subsidise our own shallow talent pool, as any citizen could live and work anywhere within Europe, with little in terms of bureaucratic hurdles to slow them down. Sadly that particular source of talent may soon be a little further from our reach.

If that weren’t enough, withdrawing from the EU will negatively affect countless apprenticeship programmes, some of which rely heavily on the European social fund.

Couple that with the fact that a significant number of engineering courses across British universities are attended by overseas students and it’s easy to see that the skills gap is increasingly widening at a time when all of our efforts should be put into trying to close it.

We were already facing an uphill struggle in resolving the skills gap, and Brexit has only added to the problem.

But that’s not to say it’s all doom and gloom! Many hope that this sobering reality is exactly what Britain needs to finally take a long hard look at itself in the mirror and declare that enough is enough. With few other options available to us, now could be the time that the skills gap issue is finally addressed and real tangible investment and support is provided to the education system and our own young people, investing in student development without drowning them in debt and career uncertainty.

Funding and investment

It’s no secret that tech hubs attract entrepreneurs and investment from the world over. Half the founders of London’s top tech start-ups come from outside Britain, and according to research from CBInsights, a whopping third of Europe’s venture capitalist investment was made in Britain last year. For context, our small home of Britain brought in $1.3 billion in funding compared to the $2.2 billion racked up by the rest of Europe.

So what does this mean for outside investment into Britain’s tech scene? The Brexit klaxon had barely sounded when a string of prolific businesses hit the eject button and began planning their Great British escape, most noticeably Siemens, which has already put a hold on its new wind power investment. As Brexit sets in, many businesses may follow suit. Quocirca’s Clive Longbottom reiterates this, believing it to be “far easier for EU companies to focus on their open market, pushing skills around the remaining EU, rather than bothering with the UK.”

And where might they go? A quick trip across the channel could find them a cosy new home in Berlin, if you ask Cordelia Yzer, Berlin’s Senator for Economics and Technology. Citing competition between London and Berlin in recent years, Yzer believes that “more funds will now make the decision in favour of Berlin”, and plans to rub shoulders with the venture capitalists that pumped over €2 billion into Berlin’s tech scene in 2015.

Conclusion

Wherever you fall on the nationwide debate, the decision has been made. For now there is nothing more to be done than to do what we Brits do best: flaunt a stiff upper lip, brush ourselves down, get up and get on with it.

“Players in the tech sector live or die by their ability to roll with the punches”

After all, our digital industry isn’t growing a third faster than the rest of our economy by chance; our little islands are graced with serial entrepreneurs ready to turn what could be troubling times into new opportunities. Players in the tech sector live or die by their ability to roll with the punches and keep one step ahead of the endless emergence of new technologies, so the Brexit hurdle should just be another Friday to many of them.

Laura Koetzle, Director at Forrester, agrees, encouraging the industry to rise above the noise and come at Brexit with a new perspective. “While times of high-market volatility can tempt firms to panic and cut spending on customer-focused initiatives, now is the time to drive innovation in order to win, serve, and retain customers,” Koetzle urges.

Churchill believed that “a pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty”, and while Brexit most certainly wouldn’t have been his first choice it’s imperative that we make the most of the hand we’ve been dealt and continue to build the Great British tech hub we’ve established in recent years.

Sources:

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