Brexit has left the UK’s technology industry reassessing its position, with major firms putting expansion plans on hold as they consider a move to a continental location.
It wasn't long ago when the UK bosses of some of the world's biggest technology companies warned that exiting - Brexiting - the European Union would undermine the country's tech sector and would mean firms and their customers facing "significant and prolonged uncertainty and leave the UK side-lined." The technology sector is almost universally supportive of Britain remaining in the EU. One pole of British tech entrepreneurs in the run-up to the vote had support for Remain at 70%, compared to 15% wanting to leave; another, of just London tech workers, is even starker: 87% on one side, and just 3% on the other. It’s even prompted some of Britain’s largest tech companies to speak out publicly. 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. But how exactly will the UK leaving the EU will affect tech firms?
1. Access to skills Tech firms based in the UK routinely employ EU nationals, but Britain's decision to leave the EU has created uncertainty over whether the practice can continue after the UK brings in new immigration controls. 2. New trade tariffs A new EU-UK trade deal is expected to take years to agree, with the Leave campaign saying it wants a new deal to be in place by 2020. Once the UK has left Europe and until a new deal is struck, the UK would trade with the EU under World Trade Organization rules. These rules would see UK exporters paying new EU import tariffs, as well as facing other fresh barriers to trade. The UK would also have to renegotiate the more than 50 free trade deals the EU has with countries ranging from Canada to South Korea. However, the impact on UK-based tech firms will obviously be dependent on which regions of the world they do business with. 3. No more EU research grants The EU funds research grants within British institutions and companies, some of which are technology firms. 4. Uncertainty over handling data The EU is currently in the process of negotiating a new deal for the transatlantic transfer of personal data, under the EU-US Safe Harbor agreement, Privacy Shield. Meanwhile, firms operating in EU member states have until June 2018 to comply with the new General Data Protection Regulation (GDPR), which sets out far-reaching changes to how organizations handle personal data. Firms operating in the UK will be bound by these regulations and agreements, at least for the foreseeable future 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.