As the UK prepares to strike out on its own, will initiatives such as Tech Nation and the doubling of visas be enough?
No one really knows what lies ahead as Britain presses on with Brexit, but it was abundantly clear that London and most of the UK’s tech sector were vehemently against the venture and wanted to remain in Europe.
The UK gets more than its fair share of Europe’s venture capital investment, and London is home to a thriving start-up community. With the international offices of Apple, Facebook and Google, it is a magnet for European start-up entrepreneurs who want to grow fast through access to abundant sources of capital.
As Britain stubbornly plods into a potential maelstrom, there are fears around what Brexit will mean in terms of the loss of fintech hubs and entrepreneurial and tech talent.
Europe’s favourite start-up, TransferWise, which recently raised $280m in a massive Series E round, was founded in 2011 by Estonian natives Taavet Hinrikus and Kristo Käärmann. The start-up flourished in London and is a case in point.
When the results of the Brexit referendum came in last year, Hinrikus was among the first to voice his concerns as a European and an entrepreneur that chose to base his company in the UK.
“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.”
Silicon Roundabout goes nationwide
Whether Brexit is fearless instinct about a brave new future or utter folly, UK prime minister Theresa May’s government is endeavouring to ensure that one of Britain’s best hopes – its digital industries – has a fighting chance when EU sci-tech funding disappears and it becomes harder for EU citizens to work there.
Yesterday (14 November), May and chancellor of the exchequer, Philip Hammond, revealed that the UK would double the number of visas for only the best and brightest talent to 2,000.
They also revealed plans to invest £61m across a number of areas to boost the UK’s tech credentials. These include £21m to expand the London Tech Nation initiative to a nationwide network called Tech Nation. This will see 11 new tech hubs sprout up, including hubs in Belfast, Cardiff, Edinburgh and Birmingham. The aim is to basically turn London’s Silicon Roundabout into a nationwide endeavour.
As part of the plans, Tech City UK will give more than 40,000 people the opportunity to develop the skills needed to start or grow a digital business, and will offer support for up to 4,000 UK tech businesses through a targeted growth programme, according to minister for digital, Matt Hancock.
“This regional network will accelerate the growth of the digital tech sector, cement the pipeline of talent and spark the next generation of innovative firms to seize the future opportunities of digitisation, bringing jobs, skills and higher productivity to our regions,” he said.
Eileen Burbidge, CEO of Tech City UK (soon to be Tech Nation), added: “Under the Tech Nation banner, this country that has brought so much innovation to the world – and leads in subsectors such as fintech, cybersecurity, artificial intelligence, robotics and life sciences – will build a national network of digital excellence so that the UK will continue to be recognised as one of the best places in the world to start or grow a digital tech business.”
A £20m investment will fund artificial intelligence, and how it and fintech can be deployed to public services. A further £20m will be invested to train students between 14 and 18 to defend against cyberattacks.
Will the strategy work or is it a bit of a scattergun approach to restore calm as negotiations to divorce the UK from the rest of the EU begin?
Visionary strategy needed
The psychology that led to Brexit being endorsed by a slim margin in the first place is puzzling to many. The Brexit vote was a dangerous gamble by a struggling former prime minister, David Cameron, who thought no one would be stupid enough to approve it, and it backfired. Rather than admit that the whole enterprise is folly, the Conservative government is stubbornly pressing ahead and, as such, the prejudices and fears of older citizens have damned future younger generations to a Europe that will be less open and free to them.
One of the only weapons in the UK’s armoury for the future is its vibrant tech industry, which employs more than 1.4m people in digital and represents a turnover of more than £118bn every year.
UK tech is still a magnet for investment and, in the first half of 2017, there was a record £5.6bn investment in the industry. Not only that, but tech giant Apple is pressing ahead with plans to build a mega UK headquarters that will house 3,000 people at Battersea Power Station.
Whatever negotiations occur in the coming weeks and months, May and her ministers will need to keep the tech industry – and its ability to trade within Europe and attract the best talent – at the top of the agenda.
Future growth plans around digital will need to be underpinned by visionary strategy, and not by throwing money on the fire.