With an international focus, the technology sector is undeniably going to be affected by the recent triggering of Article 50 – let alone the exit of the UK from the EU. But how exactly will this historic referendum affect the IT sector?
Investment may be affected
Start-ups rely on investment. But in a world that depends on on technology to function, any decline in investment could be detrimental. Post referendum, some experts are worried that investors would shift their attention outside of the UK, resulting in UK-based businesses struggling. However if statistics are anything to go by thus far, these worries could be unfounded.
According to GP Bullhound, in 2016 tech deals hit a record high with investment rounds and takeovers rising by 40 percent, while research from London and Partners showed that more than £6.7 billion was invested in UK tech companies.
There could be a talent shortage
The UK tech industry, much like the world tech industry, relies on talent from the EU and the rest of the world. With TechUK suggesting that around one in six new tech sector hires between 2009 and 2015 were from EU countries, coming out of the EU could affect this. Discouraging talent from the EU due to having to apply for visas and working sponsorships, the UK it sector could suffer and fall behind.
Large companies could be deterred from Britain
Although the UK relies on UK-owned businesses, we also need global companies to employ people here and drive forward our IT investment. Brexit could shift the focus away from the UK by making it seem a less profitable and unsteady choice – resulting in them looking at alternatives. However this worry has seemingly been dismissed with the announcement that Google, Apple, Microsoft, Facebook, and Amazon have all announced major investments in the UK.
Regulatory barriers could hamper work
This one all depends on how the negotiations go between the UK government and the EU. As the EU has been working on an initiative called the ‘Digital Single Market’ which allows the free movement of people and capital in the tech sphere, the UK could lose access to this. Hindering the ability of UK tech companies to work effortlessly across Europe, the UK could find itself out of the loop. It’s also imperative that the government ensures that data protection regulations in the UK match those in the EU to ensure the flow of information from country to country.
All in all, the UK seems to be holding steady when it comes to the IT and tech sectors. We have good relationships with countries, such as America, so that should keep us on an even keel for the foreseeable future. The only thing that could change all this is if the government doesn’t get a fair deal in the trade negotiations and ignore regulations, which could be damaging to the industry.