Tech after Brexit: Where do we go from here?
From: Klientscape Business
Only last week the UK bosses of some of the world's biggest technology companies warned that exiting -- aka Brexiting -- the European Union would undermine the country's tech sector and would mean firms and their customers face "significant and prolonged uncertainty and leave the UK side-lined".
Now it looks like we will soon be able to find out if their warning was right.
Certainly, few executives in the tech industry were in favour of leaving: a March poll of British tech bosses found that 70 percent support remaining in the EU, while only 15 percent thought leaving the EU was the right idea.
Three quarters of those who wanted to remain in the EU said membership made the UK more attractive to international investment and gave their company a better deal on trading relationships.
The UK tech industry is made of different elements: the multinationals that have their European headquarters here, the hundreds of thousands of tech workers, and the startups. Each have their own priorities.
It is possible to come up with a few ways in which leaving the EU might have a positive impact for some in the tech industry: rather than relying on staff from the EU, UK companies will have to get more serious about training and retaining their best tech workers -- and maybe even paying them more.
In addition, a slumping pound might help boost exports, or perhaps the adrenaline rush which comes from leaving the certainties of EU membership (and its regulation) may inspire a new herd of British unicorns.
But it's the downsides that are more obvious right now, although clearly much will depend on the negotiations with the rest of Europe.
In the short term there's likely to be plenty of the uncertainty that the tech company chiefs were worried about -- that could hurt investment at least until the terms of the Brexit are made clear.
If the pound continues to be weak against other currencies, then longer term imports of hardware and software will become more expensive -- which could mean extra belt-tightening for corporate IT buyers. Importing from (and exporting to) Europe may also become more difficult and more costly. Big companies may want to move their headquarters closer to their European clients.
But that's all trivial compared to the concerns about talent. It's bright minds from every nation -- and especially from the EU -- that are the key to the success of the UK's tech sector, and this is where the biggest threat lies. For example chip designer ARM has 200 non-UK EU staff at its headquarters and has said it will watch the negotiations closely, particularly when it comes to visas.
If the final negotiations limit the freedom of Europeans to live, work, study, or set up businesses in the UK (which has certainly been how the Leave campaign has been understood), that will be a huge blow to the tech sector.
If companies can't fill tech roles quickly in the UK, that's going to put the brakes on growth, as new projects pile up uncompleted. An even worse scenario looms: as developers can work remotely just as well from Paris as from Birmingham, many companies may simply hire developers to work from abroad, further undermining the UK's tech sector.
It would be a cruel irony if a vote to leave the EU kicked off a new wave of the outsourcing which has already done much to undermine tech careers in the UK.
For the last few years London has been building its reputation as the best place in Europe to build a startup. But for all the accelerators and startup incubators in the capital, it's still early days and the shock of leaving the EU will not be helpful.
If London's status as a banking powerhouse is undermined, that too will hurt London's startup scene, much of which is focused on developing tech of financial services companies: one reason why Silicon Roundabout became a success was its proximity to the City.
If there are fewer banks in London (as may be the case after leaving the EU), that means fewer customers and investors for these startups. And those startups may well follow the banks to Paris or Frankfurt when they go. Even tech startups not working on fin-tech may find it harder to find new funding.
But perhaps the bigger question is whether the entrepreneurs who set up those companies will even want to be in London: there is a great risk to Britain's reputation as somewhere that entrepreneurs would want to do business, and that smart developers would want to live. Perception matters as much as the reality, and some of the attitudes on display during the referendum campaign -- and since -- have not done much for Britain's standing in the world.
Much will depend on how the government manages the Brexit processes over the coming months and years, and the rhetoric it uses.
Many UK tech companies are responding to the Brexit vote in the same broad terms: they say they are disappointed, but that they will strive and succeed anyway. That may be true, and it's certainly putting a brave face on it: but most would also say they could do without the uncertainty the next few years is likely to bring.