How Brexit could affect the tech industry

While we still don’t know what shape Brexit will take, one thing is certain: the tech sector is sure to be affected in a big way. From staffing and overseas offices to data protection and research, there are many different aspects that will change the way tech firms across Europe do business.
Risk and uncertainty
A recent survey from techUK found that business leaders in the technology industry were 70% in favour of staying in the EU. They stated that remaining would make the UK more attractive to international investors and provide tech firms with a better deal on trading relationships.
Leaving the UK, on the other hand, is perceived negatively by tech leaders. They believe that it will leave them with less favourable trade conditions and could potentially deter international investors from working with them.
Another major concern from the demographic is the uncertainty that the tech industry could face. As a result of leaving the EU, the UK may have less influence on certain issues that affect its tech firms. If the country has less control over these matters, business owners in the industry may face challenges that they have not encountered before, such as licensing laws and data protection measures.
Recruiting and staffing
About 8% of the staff working for British tech companies come from the EU, and this number is sure to drop after Brexit. In fact, the recruitment of foreign workers across all industries has already decreased by 30% since Brexit was announced.
Recruitment firm Hired asked tech job hunters about their thoughts on how Brexit will affect the industry. 71% responded that it would have negative implications. Even though tech giants like Google, Facebook and Amazon remain “committed to the UK”, there is still plenty of talent that comes from across the EU.
Since there is still much uncertainty about how a post-Brexit UK will look, there is always the possibility that it will become easier for British firms to recruit non-EU tech professionals. With Canada and the United States producing highly-skilled graduates in computer science and other important technological arenas, there could also be the chance for the UK to compensate for the loss of access to EU talent.
New technologies
Universities across the UK currently collaborate with other overseas educational institutions when researching new technology. As Brexit has the potential to affect these relationships, developments in the tech industry could slow down.
Collaboration is a huge contributor to the rate at which technology develops, as the exchange of resources and ideas across borders makes it possible for researchers to come up with brilliant advancements. Artificial intelligence is one area where this is particularly true, and there is the danger that the EU and UK could miss out on some great opportunities as a result of being unable to collaborate as easily.
However, Brexit may open doors for more collaborations with non-EU partners overseas. Universities and researchers in North America have plenty to contribute, which could offset the potential loss of EU-based research partnerships.
What about tech firms based overseas?
Many UK-owned tech companies have offices overseas in other European countries and are thriving as a result. Benevolent AI is a great example, with offices in Belgium and a research facility in the UK, the company is valued at $2 billion, and its relationships across these entities may be effected after Brexit.
There are several subsets of the tech industry that could be affected in this way. For example, Brexit could have a negative impact on many UK licensed online gaming sites that have a presence in other European countries. There are a number of reasons for this, including:
- More fluctuation in exchange rates
- Risks regarding freedom of movement for employees across the EU
- The possibility of new testing and certification requests
As a result, UK companies that have operations in EU countries (and vice versa) may have to rethink their presence overseas. It may be the case that some companies withdraw and close their international offices.
When a UK company has offices overseas or an overseas company has offices in the UK, each firm has greater access to a new market. This promotes growth and encourages further technological development, and there are concerns that this could be stalled as a result of Brexit.
GDPR and data protection
Imposing stringent rules on how firms use consumer data, the European General Data Protection Regulation (GDPR) is one of the biggest developers that the tech industry has seen in recent years. Many individuals are concerned with whether or not the UK will continue to uphold data protection regulations for companies once the country leaves the EU. However, the UK government has adopted the GDPR into its own national law as part of the Data Protection Act 2018; so, no changes will be made to the ways in which businesses are required to handle customers’ personal data.
As a result, UK lawmakers hope that this will make the country a favoured nation. This should ensure that free data transfer across the UK will be made possible after Brexit.
Still plenty of questions to be answered
Regardless of what predictions say, no one really knows exactly what a post-Brexit EU will look like. In fact, techUK has called for clarity on how Brexit will affect digital services. So, everything that we can speculate remains conjecture.
It will be up to tech firms to keep a close eye on Brexit negotiations. Plenty of important changes are about to occur, and it will be important for companies to keep their ears to the ground in order to ensure that they are adequately prepared for the UK’s exit from the European Union.
Source: theupcoming
Industry: Recruitment news

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