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Home > News > The Technology Sector and Brexit – is there a problem?

The Technology Sector and Brexit – is there a problem?

10 February 2017 | Richard Gore

The only certainty in the debate about Brexit is uncertainty – the uncertainty with which all parts of the economy enter into a process with unknown implications and repercussions.

The technology sector is one of the fastest growing sectors in the UK. Its annual contribution to the UK’s GDP increases year on year (a recent survey showed the UK top in its digital share of overall GDP at 10% compared to 8% in the USA and 7% in Sweden) and the potential of any tremor in the sector should be of concern to all interested stakeholders. But, is there anything to be particularly concerned about?

Having attended a number of technology sector events recently, I remain cautiously, but thankfully, optimistic.

The recent trend in large global corporates setting up in or restating their commitment to the UK (Snapchat, Facebook and Google for instance) suggests that some much cleverer minds than mine see a future in the UK’s tech sector and we would be foolish to ignore that. Indeed, the arrival of the Oracle cloud accelerator scheme to Bristol is a vote of confidence for the local Bristol technology scene as well.

However encouraging that may be, I foresee a couple of challenges that we should all be confronting head on now and, from what I have seen and heard, companies and the technology sector as a whole are being pro-active in their approach to them.

Competition

As the UK withdraws from Europe, other European cities (Berlin, Paris, Frankfurt, etc.) are going to be staking their claim for European tech dominance.

In my view, the UK has a head start on those cities but we must be careful not to get complacent.  We should be continually seeking to push the boundaries of excellence and innovation in the UK, spearheaded by the number of excellent tech associations (Tech City, the Northern Powerhouse, Midlands Engine, Tech Southwest on a regional level) that we have in the country.

It will be interesting to see what incentives the Government puts in place to encourage and attract technology companies to develop and flourish in the UK. The research and development incentives in place help but could be reviewed and improved.

Brexit is perhaps an opportunity to remove some of the regulations that Europe has introduced over the years and lighten the bureaucratic ropes constraining innovation and technology.

Recruitment

With competition comes a pull on skilled personnel. The word on the street in the south west (my home area) is that recruitment should not be too seriously impacted but I am not so sure.

As larger companies come into the UK, the draw by them on a finite employment pool will increase. The holy grail of working in London for premium companies will be attractive and the challenge for smaller businesses will be to tempt personnel to stay or re-locate to them. The challenge is a national one (not all tech companies operate out of London!) and an international one (tempting personnel to the UK rather than Europe).

A recent event I attended, majored on the problems facing regional technology companies which, whilst offering a nice lifestyle, beaches, surfing, etc. could not always pry personnel away from the pay packets and adrenaline of working in London. This challenge will continue and, in my view, become more prevalent nationwide.

Companies should be implementing strategies to tempt personnel to stay and move to them. Some of the best and most innovative technology companies are based outside London (take Bristol and the south west for an example) and Brexit should not be an excuse for making the UK a London centric place to do business.

Protection

With change comes the possibility of what companies previously thought was protected becoming exposed to attack.

The area of intellectual property is a prime example. Trademarks have historically benefitted from protection in Europe but how this will change as we leave may mean that double protection is required in the UK as well. It is advisable for all companies that have intellectual property to carry out a check on the protection they have and to consider whether additional steps should be taken.

Equally, a review of existing contracts (both with suppliers and employees) may be sensible to ensure that companies are protected as best as possible prior to changes being implemented.

Conclusion

Ultimately, no-one knows what is going to happen over the next few years. Even the most prominent commentators, with the greatest will in the world, cannot predict what will happen.

In my view, the best approach is to ensure companies are protected as well as they can be, to continue on with business as normal and to continue pushing the message that the UK is open for business and will continue to be one of (if not) the best arenas for technology and innovation in the world.

The views contained in this article are entirely those of the author and do not necessarily reflect the opinion of Gregg Latchams.

 

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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