How will Brexit affect the UK's tech industry?

How would an exit from the EU affect data privacy?

In short, Brexit will mean that while data privacy laws will still exist, the newly negotiated General Data Protection Regulation, or GDPR, will cease to apply to British companies.

"The roots of data privacy lie in Article 8 of the European Convention on Human Rights (ECHR), and the UK would still be bound by that even if it left the EU," says Robin Wilton, Technical Outreach Director, Identity and Privacy at the Internet Society. "The UK is also a signatory to the Council of Europe's Convention 108 on the Protection of Individuals with regard to Automatic Processing of Personal Data," he says, adding that the UK would also remain bound by this after leaving the EU.

The agreement between the US and the European Union to make personal data protection laws identical across the board is critical for any company working across national borders. "If the UK isn't included in that agreement, will it simply allow unconstrained data transfers to the US, or will it try to put equivalent measures in place?" asks Wilton. "If the latter, that means a completely separate, parallel set of negotiations with the US over transatlantic data transfers."

That seems unlikely, particularly as data privacy laws are hardly controversial, and are certainly not the reason for anyone wanting the UK to leave the EU. To prevent companies from considering the UK as an unnecessary administrative burden and avoiding it, politicians will likely just adopt the GDPR and the US-EU Privacy Shield as they are.

Might the UK become a haven for big data?

Might the UK become a haven for big data?

Could an independent UK become a data haven?

That will depend on the decisions taken by politicians in the aftermath of Brexit. "Depending on the approach taken by the UK regulators, certain companies who do not trade within the EU may find it attractive to base their businesses in the UK," says John Benjamin, a Partner at law firm DWF.

Some think Brexit represents an opportunity for the UK tech industry to start competing properly with its US counterparts. "Over time an independent UK has the opportunity of becoming a haven for big data analysis and personal data processing," says Ashley Winton, Partner and UK head of data protection and privacy at international law firm Paul Hastings LLP & Chairman of the UK Data Protection Forum.

"Data sharing with the EU could be achieved with a version of the US Privacy Shield, which is more permissive than the full weight of the GDPR allows … this regime would allow the UK to compete effectively with US businesses which have a similar advantage."

In short, by leaving the EU, the UK could be put on an even footing with US-based companies.

Ashley Winton, Partner at Paul Hastings LLP and Chairman of the UK Data Protection Forum

Ashley Winton, Partner at Paul Hastings LLP and Chairman of the UK Data Protection Forum

Is this just about the economy?

Though for the wider public the referendum was tied up with myriad issues, for the tech industry it was mostly about economics. "If we vote without real thought about how the EU Referendum will have a knock-on effect on our digital economy, we could create real issues for our longer term growth," Rutherford said ahead of the vote.

"This is not about fear, it is about opportunity – a market of 500 million consumers," says Julian David, CEO of industry body techUK.

What will happen next?

Probably not much: British governments are not known for their speed nor their decisiveness. "In the short term, we may find that the slow speed of disassociation from the EU is such that the UK government would implement a version of the GDPR as national legislation, but without the oversight that the current GDPR gives to the European Data Protection Board," says Winton.

There's also the slightly thorny issue of what happens to citizens' privacy rights in a non-EU UK. The decisions of the European Court of Justice would no longer apply.

What does the UK tech industry think?

A poll in March by techUK revealed that 70% supported the UK remaining in the EU, 15% supported the UK leaving the EU and 15% were undecided. The majority wanted to remain in the EU because, they said, EU membership made the UK more attractive to international investment (76%), more globally competitive (71%) and gave the UK a better deal in trading relationships with the EU (75%).

"UK tech is thriving, creating jobs almost three times faster than the rest of the economy," says David. "The vast majority of our members say that being in the EU supports that growth … open markets and cooperation are good for business."

In a tangled web of facts, assumptions and unknowns, it's probably fair to say that the tech industry in the UK may suffer in the short term from Brexit, but it would undoubtedly adjust over the long term.

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),