Continuing to track what the analysts are saying about Brexit: Frost and Sullivan (F&S) have just notified A Post Brexit View of the UK High Tech Sector, published from their Digital Transformation practice.
They point out that the technology sector accounts for around 10% of the UK’s GDP but see four key challenges. First: a brake on migration is not certain, since free movement of EU labour goes with access to the single market. But if it materialises, then F&S see UK-based technology firms struggling to find the right skills to drive businesses forward; and EU citizens currently working here may migrate out, to other parts of Europe.
Second: many firms, particularly US-based ones in our sector, have come to the UK at least in part because it provided a good gateway into the enormous European market. Once this is no longer the case, will they migrate to other locations (e.g. Frankfurt, Paris, …). This will be more of a problem if single-market access is sacrificed to control of immigration.
Third, as I’ve already commented: leaving the EU does not necessarily mean less red tape. F&S highlight data protection, as I did previously. “Pan-European contracts will need to be renegotiated, and IP/trademarks may require separate treatment for the UK and the EU”. We will be divorced from the creation of the regulatory environment, and F&S suggest firms may find it harder “to navigate legislation and ensure they abide with the varying rules in different countries”; and the UK will without question have less clout than it does as part of the EU.
Fourth, F&S point out that the European Investment Fund is the largest investor in UK venture capital firms. Will this funding stream remain in place? and if not, can it be replaced out of the fabled £350m per week, along with everything else?
• A Post Brexit View of the UK High Tech Sector, Frost & Sullivan, undated but publicised 14 Jul 2016; the link is to a download form (if this doesn’t work search
• What about the EU? ITasITis, 24 Jun 2016
• An aggregation of post-referendum comments, ITasITis, 2 Jul 2016