The question as to whether or not the UK should leave, or remain a part of, the European Union is hot topic at the moment. People usually talk about the impact that an EU exit would have on trading within the UK, and how the UK’s immigration policy would be affected. However, leaving the European Union would also have an effect on the UK’s tech industry, in ways that you may not have even considered before.
Are you unsure of what these could be?
It would be a momentous event, given that no country has ever decided the leave the EU in the past, but here are some possible outcomes for our country’s tech industry if we do vote ‘Yes’ in the EU referendum.
Firstly, if the UK does decide to leave the European Union, our current ranking as first place in Europe as a start up scene is put at risk. Berlin in Germany is closely following our lead and, already hosting 1,500 tech and digital start ups, would quickly take advantage of our separation from the rest of Europe. The city, where a new startup comes about approximately every 20 hours, would have a pull factor that the UK wouldn’t have if they were to leave the EU: internationality.
The United Kingdom leaving the EU would also make it difficult to locate talent within the tech industry. Current regulations allow people living in the EU to move freely between other countries in the European Union. However, if the UK leave the union, our ability to pool talent from other European countries would be limited, meaning that we would be restricted in terms of different nationalities within UK businesses, which could make communications more difficult.
Similarly, this restriction with regards to movement between the UK and the rest of Europe, should the UK separate from the union, could lead to a huge loss of money for companies in the tech industry. It is estimated that the UK’s GDP will reduce by more than 2% by 2030 if the separation does take place, having an effect on businesses in all sectors. However, this will hit UK tech startup companies particularly hard as, if internationality is a problem, foreign businesses will be much less likely to invest in them.
As a follow on from lack of investment in new UK companies, technical and technological progress could be hindered. Fewer investors means that companies have lower budgets, making it difficult for them to experiment with new products and services and be as innovative as they might be otherwise.
In general, if the United Kingdom were to leave the EU, the outlook for the UK’s tech industry would be pretty bleak. Competition would be higher than ever, not least because money would be much tighter. This is definitely something to bear in mind when you cast your vote in the 2017 EU referendum.
[Photo Credit: MPD01605 ]