Britain is out of the EU. After 52% of the UK voted for Britain to exit the European Union following Thursday’s referendum, today has been characterised by uncertainty from everyone – not least the tech industry. But what does this mean for startups and entrepreneurs? What happens to those who helped make the UK a shining example of how the technology industry can inspire change?
Rather ironically, during the capital’s biggest celebration of the technology industry across London and the rest of the UK – London Tech Week – entrepreneurs, founders and investors are questioning what such a huge shake-up could mean for their future, both in the short- and long-term.
As a study by nonprofit trade body Coadec revealed, UK startups overwhelmingly wished to remain part of the EU ahead of the referendum. Only 19% of the 175 respondents wished to leave, with access to the large single market and free movement of labour cited as primary reasons to remain. A similar survey by Tech London Advocates revealed that 87% of London’s tech community wished to stay.
“Gone are our hopes for a digital single market, there will now be question marks over London being a powerhouse for finance and technology.”
Husayn Kassai, CEO and co-founder of “next-generation” background-checking firm, Onfido, said: “There is a powerful state of unease this morning as the UK wakes up to the Brexit news. There is a lot of uncertainty around but one thing for sure is that this is bad news for the tech industry.
“Gone are our hopes for a digital single market, there will now be question marks over London being a powerhouse for finance and technology, and it is likely to make it harder to attract top-calibre tech talent to the UK. Now the tech industry and the UK needs to play with the cards we’ve been dealt and work out how best to move forward.”
One fear is that investment in UK firms will begin to fall, with Britain no longer seen as valuable a hub for innovation and burgeoning business as it was 24 hours ago. But Hussein Kanji, founding partner of investment firm Hoxton Ventures, is as enthusiastic about UK business as ever.
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“We’re just as bullish on European – not just UK – investing,” he said. We think the market for building global-winning technology companies is robust, and growing rapidly. That said, we are disappointed by the uncertainty that this exit causes… Startups have enough uncertainty to deal with and we would prefer for them to not have to worry about currency risk, trade treaties and immigration policies.”
“All of this may put London’s leading position in Europe in the tech industry in jeopardy,” Kanji added. “Depending on how things resolve with the EU, we may see the nexus move from London to somewhere else in Berlin or fragment across the European Union… This decision definitely takes some of the momentum out of the European tech growth story.”
What about immigration concerns?
“It is disappointing to see that part of the popular rhetoric behind an exit was because of immigration.”
Much of the wider conversation surrounding the EU referendum has been the impact of immigration, but the tech industry has long depended on help from outside to help push forward innovation and fill the UK’s ever-growing skills gap.
“It is disappointing to see that part of the popular rhetoric behind an exit was because of immigration,” said Hoxton Ventures’ Hussein Kanji, himself an immigrant to the UK alongside founding partner Rob Kniaz. “We believe Britain needs to open its borders to high-value immigrants, which are critical in building and scaling out these companies in the technology industry.”
“Both Rob and myself are immigrants to the UK, and have been able to contribute to the economy by funding a number of leading UK tech companies.”
Adam Byrtek, CTO of home professional hiring app Homyze and also an immigrant to the UK, added: “I chose to move to London mostly because it was seen as the most active European startup hub, and a diverse, buzzing city to live in. After leaving the EU this might change dramatically because of potential investment crunch, harder access to European markets, and shortage of skilled talent that is only going to get worse if anti-immigration policies are implemented.
“Right now, nobody knows what the future holds, but I’m seriously considering my options after the two-year transitory period.”
Earlier this week, digital minister Ed Vaizey warned that tech companies would suffer from the loss of the digital single market and that leaving the EU would put skills and talent at “massive, massive risk”.
Russ Shaw, founder of Tech London Advocates, however, was quick to reassure Britain that it would still welcome talent from abroad despite people voting to leave the EU.
“Today’s result is not what the London tech sector wanted to see, but we will continue our efforts to build London tech and continue on our journey to make London a world-leading tech hub,” he said. “Digital and tech entrepreneurship have really taken hold in London, and we will continue to nurture this in the coming months and years.
“During this week – which is also London Technology Week – Tech London Advocates has been focusing on the importance of diversity in tech, and after this result, the London tech sector will continue to celebrate and welcome talent from London, the UK, the European Union and from around the world.”
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