How will Brexit affect the UK's tech industry?


Democracy has spoken, and the UK has voted to terminate its membership of the European Union. It's time to stop talking about how many bananas are in a bunch and consider how Brexit will affect the tech industry.

Will it be harder to employ skilled IT staff from inside the EU? How about the movement of data across borders? Will the UK become a red tape nightmare for foreign companies? Can London remain a digital capital of Europe without being in an EU nation? How could the vote affect the future of tech? With facts hard to come by, the picture is unclear.

Reactions, however, are pouring in, and tech professionals are falling into two broad camps: the pragmatics and the pessimists.

A survey of the attitudes of around 300 IT security professionals at the recent Infosecurity Europe conference, carried out on behalf of Alienvault, found that over half of respondents (52 percent) believed that, post-Brexit, UK organisations would still have to comply with EU legislation in order to trade with Europe.

The vast majority (78 percent) of those surveyed did not believe their jobs would be made any easier by Britain leaving the EU. In fact, a significant proportion (22 percent) actively supported EU legislation around data protection, and believed it benefitted them and their work.

Others, like security startup Miracl, adopted an even darker tone. "Splitting away from Europe would make it even more difficult for UK tech firms to compete with the US tech giants, because their talent pool would be so much larger than ours." its CEO said.

What about skilled IT workers?

For many voters in the UK, the EU referendum was a discussion about migration, but the tech industry worries about migration from a different perspective; there's not enough of it, and it's far too difficult. There's already a shortage of UK-bound skilled workers coming out of EU countries, and Brexit will only worsen the situation.

"Despite free movement throughout the European Union at the moment, the UK is still suffering from a skills shortage, particularly when it comes to tech," says Robert Rutherford, CEO of business and IT consultancy QuoStar. "Many questions remain unanswered as to whether there will be alternatives in place to allow the UK to bring in skilled tech professionals from other regions easily."

It's already difficult for IT experts from non-EU countries to come and work in the UK. It's about to get even harder, and Brexit won't change that. Worse still, there could be an out-flux of workers from EU states already in the UK.

It's already difficult to enter the UK to work from outside the EU

It's already difficult to enter the UK to work from outside the EU

What about the EU's Digital Single Market Initiative?

This is central to the argument that London's tech startup scene in particular will suffer as the UK leaves the EU.

"The core issue facing the tech industry when it comes to Brexit is whether the UK alone can fund development in technology in the same way, and at the same level, as the EU's Digital Single Market Initiative," says Rutherford.

From a tech industry perspective, the Digital Single Market Initiative is about the digitisation of industry, about getting the economy ready for cloud computing, data-driven science and the Internet of Things. So what does the UK stand to gain or lose?

It will lose access to the new European cloud that will give Europe's 1.7 million researchers and 70 million science and technology professionals a virtual environment in which to store, manage, analyse and reuse research data, as well as a €500 million (around £380 million) pan-EU network of digital innovation hubs where businesses can obtain advice and test digital innovations.

In total, it's estimated that the Digital Single Market Initiative will mobilise over €50 billion (around £38 billion) of public and private investments in support of the digitisation of industry.

A third of a major graphene investment in the UK came from the EU

A third of a major graphene investment in the UK came from the EU

"While the UK is currently a leader in global IT development, what will the UK government be able to invest in this area?" asks Rutherford. "With a proposed €50 billion of investment in support of the digitisation of industry coming from the EU, we must consider whether we will lose this benefit following a Brexit."

There's also the top-up that the EU provides. For the £61 million National Graphene Institute (NGI) at The University of Manchester, the UK government provided £38 million, while £23 million came from the European Regional Development Fund (ERDF). How much of the estimated £8.5 billion saving in EU contributions would be invested in the tech industry? That's unknown, but austerity, not investment, is the current political priority.

Jamie Carter

Jamie is a freelance tech, travel and space journalist based in the UK. He’s been writing regularly for Techradar since it was launched in 2008 and also writes regularly for Forbes, The Telegraph, the South China Morning Post, Sky & Telescope and the Sky At Night magazine as well as other Future titles T3, Digital Camera World, All About Space and He also edits two of his own websites, and that reflect his obsession with travel gear and solar eclipse travel. He is the author of A Stargazing Program For Beginners (Springer, 2015),