Brexit could signal brain drain for UK tech
The upcoming referendum on Britain’s membership of the EU could have drastic consequences for the UK tech scene,...
With Brexit well and truly on the horizon, the UK faces a struggle to retain its crown as the best place for digital business. What measures can it take to stay top of the ranks?
In this year’s EY G20 Digital Entrepreneurship Barometer rankings, the UK topped the bill in areas like recruitment practices, taxation frameworks, time taken to start a business and legal efficiency. Meanwhile, it ranked second only to the US for its digital knowledge base and ICT market, including access to technology, expertise and high-quality research institutions.
“With Brexit on the horizon, the UK government, more so than the other G20 nations, will be thinking about how the economy can be set up to succeed in this digital age,” says Bjorn Conway, head of UK government and public sector at EY.
“By understanding the issues that young entrepreneurs face, policy can help play a critical role in turning digital disruption into a powerful opportunity. Supporting an entrepreneurial environment that encourages our young people to establish, grow and scale their businesses will ensure the UK continues to be competitive on the world stage into the future.”
As the fallout from the Brexit vote continues, any ray of sunshine for the tech scene is doubly welcome. Members of the industry have already voiced concerns about what will happen to Britain’s flourishing digital sector post-Brexit, particularly in the areas of investment and access to tech talent.
Although the UK ranked highly as a place for entrepreneurs to do business, it continues to lag as a breeding ground for digital entrepreneurs. In terms of digital skills and entrepreneurial education, the UK came seventh.
To stay in the top rankings, the UK must continue to invest heavily in STEM education and promoting youth entrepreneurship. In the meantime, we need answers about the free movement of tech workers.
EY suggested in its report that the G20 as a whole should consider a special entrepreneur visa. It’s not hard to see how a similar exception for tech workers could be an advantage for the UK, regardless of the outcome of its EU negotiations.
Focus on funding
The UK’s lowest ranking among the G20 nations was for access to finance like venture capital and angel funding. While there is moderate growth in the startup fund and incubator sector, the UK must also ensure it stays attractive to foreign investors for the digital sector to truly boom.
“Despite the uncertainty, there is still a massive amount of capital looking for a home in London, so good businesses will continue to receive funding,” says Stuart Veale, founding partner of investment advisor Beringea. “But the government must reassure individuals and companies about which system they will use to allow new migrants into the UK. This is crucial, especially for the tech community which relies on lots of European talent.”
As with all sectors of the British economy, the sooner Brexit is clarified, the better. But with recent court decisions hampering Prime Minister Theresa May’s ability to move forward with Article 50, the tech sector may be waiting some time for the reassurance it seeks.