The Impact of Brexit on UK’s Tech Industry

Published on: 07/04/2017


Last Wednesday, Theresa May’s letter formally invoking Article 50 was sent to Brussels, firing the starting gun on the two-year departure process from the EU. There is no doubt that future immigration policy is arguably the most important factor on the table for the tech industry.

London is widely regarded as one of the world’s biggest and fastest growing tech hubs, attracting more investment than any other European city last year.

Indeed, Tech City’s 2017 report reveals:

  • In 2016 UK digital tech investment reached £6.8bn (50% higher than any other European country);
  • The UK is home to 8 of Europe’s top 20 universities, more than any other European country;
  • The turnover of digital tech businesses reached £170bn, an increase of £30bn in just 5 years; and
  • The economic contribution of the UK digital tech worker is large and growing, almost twice as high as the non-digital worker.

However, London could lose its position as the leading destination for start-ups in Europe if it does not remain open to the best talent after Brexit.

The success and growth of the UK's digitally-intensive businesses has been fuelled by talent, expertise and entrepreneurialism that has flowed to the UK thanks to the free movement of people. The UK’s universities have benefited more than any other country from EU research funds, whilst the European Investment Fund has been a vital source of venture capital for the UK's world-leading tech start-up ecosystem.

An independent report commissioned by techUK (a British technology group representing 900 companies) revealed that 18% of the sector’s 3 million workers are foreign-born. One-third of those are from EU countries. Foreign born workers accounted for 45 per cent of net employment growth between 2009 and 2015. EU-born workers contributed the most, in relative terms. There is no doubt that Brexit potentially risks access to skills by disrupting a vital talent pipeline.

The tech industry is therefore urging the government to clarify the policy for retaining skilled EU talent in the UK without further delay and to ensure that future immigration policy carves an easy path for skilled labour to come to the UK in the future.

Although there are a number of visa routes available under the current immigration rules for highly talented individuals, we would argue that the complex visa requirements and restrictions may be putting investors and entrepreneurs off coming to the UK. Therefore, the government should ensure that future immigration policy and Home Office guidance is clear and consistent.

The business community also refuses to be quietened - tech leaders have made suggestions  of a new minimum 6 month highly skilled visa which would allow the tech industry to access talent after Brexit. It remains to be seen what the immigration policy will be post-Brexit but we would urge the business community to continue making contributions.

Although there have been many varied approaches to plugging the skills gap more locally such as through apprenticeships, re-skilling and programs within schools to encourage interest in tech careers, these approaches won’t address the problem in its entirety. Further, they will need time to take full effect; therefore, we would argue that access to international talent is key for the tech industry’s continued success.


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