Despite best efforts by the UK’s tech community to warn of the implications of a Brexit prior to the vote, the decision has been taken and the biggest issue now facing both established tech players and start-ups is attracting overseas talent.
Start-ups and tech players will need to figure out if overseas talent will face obstacles if they wish to join companies in the UK, or will the start-ups themselves have to up sticks to go to where the talent is welcome?
During the week, a van was seen circling London’s Shoreditch area – home to Silicon Roundabout – advertising opportunities for start-ups to move to Berlin.
“Dear start-ups, keep calm and move to Berlin,” the van’s billboard read.
This may seem light-hearted, but the underlying truth is much more serious.
‘Immigration is part of the solution we need, not the problem. Without immigration, nations would stagnate. It is key for innovation and for economic growth’
– TAAVET HINRIKUS, TRANSFERWISE
The social media aftermath of the Brexit drama saw an ugly racist atmosphere rear its head in the UK – made most poignant by that viral video of thugs attacking an ex-US soldier on a train – and overseas workers based in the UK have no doubt had to ask themselves if they are still welcome.
The sad irony is London, which is arguably the most cosmopolitan city in the world, home to the biggest tech start-up community in Europe, which boasts the best-funded companies, which voted overwhelmingly for the UK to stay in the EU, is ardent in its view that overseas talent is indeed, 100pc welcome.
Already, there is evidence that some of the UK’s fastest-growing start-ups have been approached with offers to move. The CEO of TransferWise, Taavet Hinrikus, tweeted last week that Ireland, Switzerland and other countries are reaching out with tempting offers to move operations.
Ireland, Switzerland, others reaching out and tempting @TransferWise to start/move operations there – competition between states is good 🙂
— taavet hinrikus (@taavet) July 3, 2016
An Estonian emigrant living in London and who moved his fast-growing start-up to the city six years ago, Hinrikus wrote in a Medium post that membership of the UK should have been a no-brainer for UK voters.
“And despite all the rhetoric ahead of the vote, I thought common sense would prevail. But then the vote happened — and the UK made its decision to leave. Like everyone around me in London, I was shocked.”
Stoked in many instances by fears of the impact of immigration and misguided xenophobic rhetoric, the UK voted out by a slim margin. The fact that many of the people qualified to staff services like the NHS are talented immigrants from overseas was lost on some voters.
“Immigration is part of the solution we need, not the problem,” Hinrikus said.
“Without immigration, nations would stagnate. It is key for innovation and for economic growth.”
ICT skills shortage will be most severe in countries that have failed to invest in tech education
The key battle the UK’s tech economy faces in the coming years could be talent above funding.
The EU Commission has already identified that a shortage in ICT skills is looming, with 825,000 job vacancies predicted across the EU by 2020 due to a lack of digital skills.
With the UK facing into these headwinds too, Brexit does not bode well for the country’s start-up community.
‘Development will now stall as companies struggle to find the staff and cash they need to scale’
– DAMIAN KIMMELMAN, DUEDIL
Eyes are on future trade agreements that the UK may negotiate and if one of the key pillars of the EU is removed – the free movement of people – the UK’s tech scene will suffer.
Cities like Frankfurt, Paris and, let’s be honest, Dublin too, are hungrily eyeing what Brexit could mean for financial services as well as tech.
Writing in The Guardian newspaper this week, Alex Hern said a limit on inward migration by the UK would be especially bad for the UK’s tech sector, which relies on immigration to fill the hole left by years of underinvestment in technical education in the UK.
“The UK technology industry made the need for freer migration clear even before leaving the EU was considered a serious proposal,” Hern wrote.
Writing in TechCrunch this week, Damian Kimmelman, the CEO and founer of DueDil, wrote: “Tech will particularly suffer. The UK’s start-up scene, nurtured by international venture capital and skilled workers’ willingness to move here, was starting to create global challengers – and thousands of well-paid jobs. Development will now stall as companies struggle to find the staff and cash they need to scale.”
Any country competing in the war for talent – and that includes Ireland – needs to be cognisant of this fact: inward migration of talent will fuel growth, not hinder it.
The countries that will win in the war for talent will be the ones that remove the frictions and encourage immigration.
And as the UK tech start-up community faces into an uncertain future, now is not the time for schadenfreude. It’s time to pay attention and learn. And to appreciate, rather than fear, immigration.
Shoreditch image via Shutterstock