View all newsletters
Receive our newsletter - data, insights and analysis delivered to you

Article 50: What UK tech wants and needs as Britain leaves EU

PM Theresa May is triggering Article 50, formally starting the divorce proceedings between Britain and the EU.

By Ellie Burns

Brexit D-Day is finally here. After months of debate, protests and daily headlines lamenting the dangers and virtues of Britain leaving the European Union, Prime Minister Theresa May is set to trigger Article 50 and start the formal process of the UK withdrawing from the EU.

In a historic referendum on 23 June 2016, over 17 million people voted in favour of leaving the EU, with the result immediately hitting the finanical markets and forcing the resignation of then-Prime Minister David Cameron. Fast-forward nine months of turbulent debate and legal challenges opposing the referendum result, and we arrive at Article 50, or to give its full title, Article 50 of the Treaty on European Union.

Article 50 will be triggered on 29 March 2017, kick-starting a two-year period of negotiations regarding Britain’s divorce from the EU. Article 50 should put all Brexit uncertainty to bed, setting out what laws, rules and sanctions the UK keeps amid its future relationship with the EU. However, before Britain’s withdrawal from the EU is set in stone, uncertainty flourishes, with many of the same fears from the initial referendum surfacing once again.

The technology sector was one of the most vocal advocates of the UK remaining in the EU, with access to the Digital Single Market a chief concern for the future of the UK tech sector. Many in the sector are reiterating the importance of the Digital Single Market as Article 50 is triggered, with MuleSoft founder Ross Mason boldly stating that Britain’s digital future hangs on whether the country remains a part of the Digital Single Market.

“Brexit has thrown UK involvement in the EU Digital Single Market into chaos. With Article 50 being triggered, more than ever it is clear to me that being outside of a Digital Single Market would damage economic growth in the UK,” Mr Mason said.

The MuleSoft founder went on to warn of the possibility of Europe simplifying the rules of digital business in the future, a move which would leave the UK out in the cold. Not only would UK businesses be at a disadvantage, Mr Mason argues, but also those companies that do business online.

“Whether you are selling goods online or providing a service made up of technology components that reside in different countries, the cost overhead will only increase if the UK sits outside of an EU Digital Single Market.”

Content from our partners
Why the tech sector must embrace faster, smarter talent recruitment
Sherif Tawfik: The Middle East and Africa are ready to lead on the climate
What to look for in a modern ERP system

article 50 what it means for UK tech

Article 50, however, is all about negotiation – and Britain needs the best deal possible. The best deal possible in Mr Mason’s eyes is one where the UK is still included in the Digital Single market, with the MuleSoft boss saying:

“Ultimately, we need to work towards a common framework for doing digital business across the globe. Far too often, digital business is governed by rules and regulations that were built for the physical world where physical borders acted as barriers. These borders don’t exist in the digital world, so we need regulations and marketplaces that are global rather than local to ensure digital trade continues to flourish and that consumer data is protected. And, in the short term at least, a Digital Single Market in Europe that includes the UK.”

The idea of a soft Brexit from the Digital Single Market may seem an unlikely one, but with the powerhouse of London becoming an ever-important tech hub it could be a possibility. Google, Apple and Facebook are three big names who have committed to a long-term future in the UK despite Brexit, while tech firms based in the capital continue to attract more investment than any other European country.

According to London & Partners, the Mayor of London’s agency, London tech firms have raised £5.4 billion since 2011. This beats other leading tech hub Berlin, where tech companies raised £3.3 billion, and is significantly more than any other European tech hub including Paris, Dublin and Amsterdam.

“Despite the Brexit vote, the capital continues to attract record levels of investment and remains the best place in the world to grow a business. I have no doubt that this important sector of our economy will continue to generate jobs, investment and world-leading technology for decades to come,” said Mayor of London, Sadiq Khan.

READ MORE: What Brexit? London remains ‘undisputed tech capital of Europe’

The numbers suggest that the UK has a certain amount of financial and technological clout to bring to the negotiating table, but the key thing to preserve is the momentum of the success the country has had in the tech sector. For that success, the UK needs to be able to attract and retain talent.

The exodus of talent, often quoted alongside the ever-growing digital skills gap, was another key Brexit concern of the UK tech industry. Stats would suggest that Brexit has already hit perspective talent considering a UK career move, with Arrows Group CEO James Parson seeing a 10% reduction of EU skilled workers relocating to the UK.  Mr Parsons also says that this trend is being seen at the business level, with clients apprehensive about upping investment in the UK.

“As many of our clients want to expand their tech teams quickly, they need to invest in a location that can give them a healthy supply of talent to meet their objectives, which they may not be able to cannot guarantee here in the UK.

“If this trend continues it could lead to a brain drain of top UK talent as generally they will want to work where the exciting projects are. We’re already seeing an increase in best-in-class developers taking roles in Switzerland which continues to be a fast-growing hub for tech innovation,” said the CEO.

Mr Parsons echoes the sentiments of many when he says that it is vital for the UK government to put the right laws and incentives in place to secure top talent and attract the right people to the UK. Negotiations also have to reflect that, as per London Mayor Sadiq Khan’s slogan, the UK is open for business. While a key Brexit factor was the control of borders, the UK must walk away from the negotiating table with the UK remaining an attractive, welcoming and lucrative place for tech professionals to work and play.

READ MORE: Brexit immigration restrictions to put a choke hold on UK tech growth

“It would be great to see the movement of talent into and out of the UK being maximised. Our customers tell us that the skills shortage is the number one concern for them after Brexit uncertainty. Small businesses need people with the right attitude as well as the right skills to succeed and grow,” said Jonathan Richards, CEO of breatheHR.

Brexit has been a story in which uncertainty has been the main protagonist – and the story is not going to change any time soon. Article 50 will be sure to trigger even more uncertainty as the UK and EU battle it out at the negotiation table. Negotiations concerning freedom of movement and the digital single market will be watched closely by those in the tech sector,  with many pinning the future success of Britain’s tech and digital sector on the outcome of such negotiations.

“The tech industry wants to see a trade agreement that ensure the industry continues to grow, including continued market access, frictionless movement of talent and a robust legal process for cross border data flows. Both sides must remember that a good deal for tech is a good deal for everyone. A new relationship must be forged that not only works for today’s economy, but for tomorrow’s digitally-enabled world,” said Julian David, CEO at techUK.

“We urge all parties to enter into the negotiations committed to achieving an outcome that supports the strong mutual interests of both the UK and the EU. These negotiations will be complex and arduous but must be conducted in a spirit of partnership and mutual respect if they are to achieve the outcome that works for tech, the public and the future.”

 

Topics in this article : ,
Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.
THANK YOU