Will the UK ever produce a mobile giant in a post-Brexit world?

The UK can make a strong claim to be the tech capital of Europe. Our startup culture and talent base makes the country one of the best places to set up business on the continent. But it’s also a fact that the UK has never produced a true tech giant.

Outside of the big telcos – Vodafone and BT – the biggest technology firm is arguably software developer Sage. The last big hope was ARM, but the 2016 takeover by Japanese firm Softbank meant yet another British firm ended up in foreign hands.

So where will the UK’s answer to Facebook, Google or Amazon come from, and could it come from the mobile sector?

UK growth and Brexit impact

techUK represents the UK technology industry and was present at Mobile World Congress (MWC) in Barcelona to promote British firms and to understand their needs.

“Our membership is ‘chips to clicks’,” CEO Julian David tells TechRadar Pro, explaining that its diverse membership ranges from UK offices of major international brands to young companies looking to make an impact.

“You’ve got to be at these shows just to show you’re at the industry. Numbers do count here.”

David says he isn’t concerned about missed opportunities like ARM and instead wants to focus on the future, how to build up companies, and eliminate barriers to growth.

“We have big tech companies but they’re in other industries like Rolls Royce. The challenge we have is that we’re really good at startups but do we have enough to scale them up?”

The UK has a strong base in fintech and it is predicted that this might be where the next big tech firm will emerge from. But the UK’s financial sector, and indeed its technology sector, is under threat from Brexit.

David concedes that many of the advantages that the UK has enjoyed, such as talent, are under threat. But he also senses an opportunity.

Since the EU Referendum, the government has placed technology at the centre of many of its economic plans, and it has shown more commitment to helping startups at shows like MWC and the Consumer Electronics Show (CES) in the US.

“What’s the upside for Brexit? I would say the focus that the government has got with an industrial strategy,” he says. “There’s a realisation they’ve got to promote British industry. I agree that Brexit has provoked more engagement within government.

“Why is technology important? Where is the UK going to be post-Brexit? It’s got to be high technology, high skill.

“We’re not a great primary product producer and we’re not a low-cost economy. We have to build on that. We’re a service economy.”

Trading economy

As the UK continues its negotiations with the EU, David says he wants the government to know how important the EU is to UK startups, both in the mobile sector and beyond.

The UK economy is three per cent of global GDP but represents 12 per cent of [the data economy]. That’s because it’s so service focused,” he explains.

“We’re also a trading economy, so 75 per cent of those data flows go through the EU. That’s why we need an agreement - If you don’t get that, you’re going to take a hit. We don’t see it as a choice between being a big player in Europe or the world. If you’re a big player in Europe, you’d be stupid to give that away to focus the rest of the world.

“The other challenge is the government is waking up to is that we’ve had a bit a free lunch being the English-speaking, English law-abiding member of the EU. You’re already seeing the challenge from other parts of Europe. It’s happening with finance and it’s happening with tech, with the rise of Berlin.

“If you lose that free lunch then you’ve got be good at what you do.”

5G and the future

That extends to 5G – the main theme of this year’s MWC. Spectrum harmonisation, data transfers and cross-border support are bit three issues decided at an EU level.

David is excited about 5G and the opportunities it affords UK tech firms if they apply innovative operating models. The UK has ambitions to be a leader in the field – thanks to its talent and startup community.

“The difference between 4G and 5G is that it brings actual change,” he says. “ There are actual use cases that weren’t possible but are now before because of the low latency and high capacity."

“But there are also changes in how operators have spectrum. It’s no longer in blocks -  you can have mixed used which brings in new players and business models. That’s very exciting for us. The idea that you can bring things you haven’t even thought about to market.”

The UK auction of 5G spectrum will take place over the next few weeks after several delays and David is urging haste. He is also concerned that local authorities still look at the short-term value of levying rents for infrastructure rather than the wider economic gain that masts and small cells will bring to an area.

“We think the UK has to do these things with speed. We keep telling DCMS and Ofcom that the consultation is undertaken with speed and focus. Getting it fast is important. Where are we in the race? I don’t think we’re in a position where we’re behind or ahead.

“The thing that worries about me with the UK is how we implement things and scale. We’ve been talking to [Mayors and councils] and telling them to stop thinking about telecoms as a revenue generator but as a contributor.”

So will we ever get a major tech firm in the UK? David believes so, but says this is dependent on the UK remaining open after Brexit and would be aided by progressive government policy.

“With skills, it’s not just about tech skills, its management skills and financial skills,” he says. “It all points to us having a smart migration policy. The quickest way to do that is get someone from somewhere else.

“The government’s use of innovation isn’t good enough,” he explains, noting that a more aggregated NHS IT plan for example would be better than the fragmented Trust-based system that limits innovation. He also says that techUK’s annual survey of civil servants suggest mobile policies haven’t advanced either.

“I’m not pessimistic about it and I don’t worry about ships that have gone but there are clear things that policymakers have to get right.

“[Whatever happens] Post-Brexit - everything comes into that context at some point – British tech is global.”

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.