A bloody battle of lies and betrayal saw the referendum passed with 52% of the national vote. However, this was not the case for all regions of the UK as Northern Ireland and Scotland voted to remain part of the EU.

Three years later and Brexit calamity is still trudging along the road from Brussels to London.

Why hasn’t it happened already?

Relationship breakups are complicated when neither side agree on future terms and conditions. Add 46 years of economic marriage and the task becomes a lot more difficult.

This theme of complexity was to be a forerunner for Theresa May, the new British PM, as she tried to negotiate the divorce deal with the twenty-seven remaining EU countries.

Mrs May promised to deliver a Brexit that would “Take Back Control”, seeing an end to the free movement of people who live and work in the UK and vice-versa. Leaving the EU’s rules of trade governance would also grant the UK an opportunity to establish independent trade deals with the rest of the world.

Her ambition to leave Europe with a sensible deal was not helped by the fact that her Conservative Party no longer held a majority in Westminster. She relied upon a ‘Confidence and Supply’ arrangement with Northern Irish pro-Leave party, the DUP, who held her to ransom over Northern Ireland’s constitutional position within the UK.

After a series of “meaningful votes” on the withdrawal agreement, Mrs May failed to secure a majority for her plan. The government was and still is divided on Brexit but unified on removing Theresa May as PM. She has since signalled her intention to step down on June 7th, leaving voters are unsure of what will happen next.

But how does this affect tech?

The UK makes up 1% of the world’s population and holds 3% of global GDP. This 3% figure on its own will do little to sway the global IT industry which operates off a Network Economic Model that gains its transactional value through mass transactions.

The EU, however, is the second largest economy in the world, representing 22% of the global GDP and 11% of the world’s population.

Figures like these influence industries, make laws and set policies. Add the fact that Washington does little to regulate privacy laws and you make the EU, who does, the Most Valuable Player.

Therefore, with the UK either inside or outside of the EU Single Market, control would still come from Europe, making the case for an independent Britain pointless with regards to policies and protection laws in tech.

Flow of Data

For a company, the processing of data, belonging to EU citizens is straight-forward, provided that the company is based in an EU country.

The situation becomes more complex when the country does not belong to the EU.

In the wake of Brexit actually happening, Britain in this case, will likely be granted a “third states” status as they are currently already under GDPR control.

Which is good for now. But with ever-changing nature of laws and regulations, who knows how that could change, adding uncertainty to how data will be accessed in the future.

In addition to the flow of data, the use of EU databases will also incur a charge for Britain if Brexit goes ahead. Extra financial stresses like these will have a negative impact on the British tech start-up culture, thus impacting the industry’s success.

Talent Acquisition

The success of any company is built on the backs of its employees, none more so than a tech company, for a number of reasons.

One of the fundamental requirements, if a company is to grow and achieve success, is its ability to recruit new talent. The best HR division in the world will not be successful in on-boarding new talent if the working environment is unattractive and difficult to gain access to.

Technology companies have an ingrained requirement to be creative with their solutions and methods of problem-solving. Having a diverse workforce contributes positively to this necessity. Employing people of different ethnic and cultural background creates an opportunity for alternative thinking, resulting in the discussion of solutions that otherwise may not have been apparent with like-minded people from the same background.

In a post-Brexit climate, taking back control and hardening of borders may make employment more difficult for non-British citizens. These key aspects of the Leave campaign are likely to cause difficulty for those holding visas and those who wish to obtain a visa.

Employment in the UK tech industry is diverse, a Tech NationTalent report shows that non-UK workers made up 13% of the digital workforce. Sustaining these numbers will be important for the survival of the industry across the UK. The threat of Brexit puts pressure on the acquisition of talent and therefore the industry itself.

Continued Innovation

If the current figures from the European Investment Fund (EIF) are anything to go by, the support of the UK’s tech innovation portfolio will soon have dried up. Funding has tumbled since the triggering of Article 50, with EU money falling from €708.8 million in 2016 to a mere €61.1 million twelve months later.

This loss of access to European funding will have a negative impact on the UK’s future tech innovation.

A combination of the listed factors mentioned in this blog opens the door for other countries to replace the UK as a leading tech hub and cause lasting damage for future generations of young people preparing themselves for employment in tech.

Nick Evans, Chairman of digital agency Extra Mile Communications, has stated that the pursuit of leaving the EU by Britain was frankly insane. The consequences of such a move will greatly reduce work experience opportunities in different countries and devastate the pool of labour needed for the UK’s workforce.

Huge multinational companies, already based in the UK, are being scared off as their once prime location is no longer part of Europe. The Dutch government has reported that its economic affairs ministry is in ongoing relocation negotiations with more than 250 companies currently based in the UK. They so far successfully lured 42 companies or branches offices from the UK in 2018.

It’s clear to be seen, the UK’s difficulty has become an opportunity for other countries.

References

• Brexit and technology: How network effects will damage UK IT industry
• As Brexit advances what impact will it have on UK tech?
• What a no-deal Brexit could mean for the UK’s technology sector
• The Brexit divide in the UK’s tech industry
• “Frankly insane?” Tech industry reacts to Brexit Withdrawal Agreement
• Netherlands talking to 250 firms about leaving UK
• The nationality of workers in the UK tech industry