Why Brexit Uncertainty Means Chaos for Britain's Tech Entrepreneurs
FORBES
By Kim Nilsson
As I write this, I can see #BrexitShambles trending on Twitter. In a similar vein, the conversations I overheard on my commute to work and around the office this morning are also full of speculation on the current progress (or lack of) on the Brexit Agreement. It’s vaguely comforting to know I’m not alone in feeling bewildered by the current state of play. Like many European technology entrepreneurs, however, who have studied, built businesses and paid taxes in Britain and now consider this country to be their home, I do have a slightly different take on current events.
Put simply, the prolonged uncertainty caused by Brexit is having a toxic impact on the dynamic, fast-paced and supportive environment for start-ups that I have long admired and appreciated in Britain. The steep decline in investment from the European Investment Fund, as well as problems hiring skilled EU developers and question marks over passporting rights are just some of the challenges those of us trying to build technology businesses in the U.K. are currently attempting to navigate. And these, of course, come on top of the day-to-day grind of building a business from nothing — no mean feat.
London’s status as Europe’s start-up hub has been hard won and is testament to a huge amount of work from policymakers, investors, and start-up founders (as well as everyone working within those businesses) but complacency about its status would be a huge mistake. Other European capitals are constantly snapping at London’s heels and cities including Paris and Berlin are making impressive strides in creating a strong environment for high-growth companies.
Talent – the new battleground
Talent, the life-blood of any business, is in particularly short supply for technology businesses. The digital technology sector has a higher proportion of non-U.K. nationals working in it than the rest of the U.K. economy as a whole according to research from Tech City and Nesta, and non-U.K. nationals working in the U.K. technology sector have a higher share of Master’s and PhD qualifications compared with U.K. nationals. There is also evidence that a high proportion (over 20 per cent) of technology start-up founders are non-U.K. nationals.
My own experience reflects this. I am from Sweden, my co-founder is Australian, and there are eight nationalities represented throughout my business. Moreover, of all the hundreds of students who graduate from courses we run to turn PhD and MSC graduates into data scientists, over 60 per cent are EU citizens.
Diversity is strength
I firmly believe that diversity is essential if we are to create working cultures that foster the unique and exciting ideas that build fantastic companies. We jeopardise this at our peril.
We are already seeing a decrease in migration from the EU to the U.K., which is now at its lowest level for four years. Despite the very welcome reassurances from the London Mayor that “London is open”, clearly, people are voting with their feet and not coming to the U.K. to work and build their careers. A tremendous loss.
My company is absolutely committed to staying in the U.K., but with so much uncertainty I am, like many of my entrepreneurial peers, making contingency plans and looking at alternatives. Last month we opened an office in Berlin, our first outside the U.K. Brexit was definitely not the only reason for this – we’re a growing business and expansion beyond London was part of our long-term planning, but I’d be lying if I didn’t say that we are now glad we have another place from which to base the business if needed.
A plea for clarity
What do I want to see happen? Well, I am not so arrogant to think I have all the answers, and I am not a U.K. citizen, so it is not my place to comment on U.K government policy. That said, the current climate of uncertainty in the country must end if Britain doesn’t do irreversible damage to its reputation in the global technology industry. If Brexit is happening, we need to know how and, more importantly, what is going to be done to address the shortage of skilled tech talent as a result. The stakes are too high for anything less than total clarity right now.