Will Brexit hinder UK tech growth?

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Written by Ritam Gandhi on 22 January 2020 in Opinion
Opinion

The Government must show its commitment to working closely with the tech sector, says Ritam Gandhi.

Reading time: 4 minutes

The deadlock in Westminster appears to be over. After years of political stalemate since the 2016 EU Referendum, the Conservative party’s decisive victory in the December 2019 general election has meant that the Brexit Bill has finally passed through a third reading in the House of Commons.

While it is currently being debated in the House of Lords, this result has meant that the UK is a step closer to leaving the EU on 31 January.

While the UK population has differing views on the results of the EU Referendum, the result signals an end to the uncertainty that has plagued consumers and business leaders alike.

The increased likelihood of the UK sticking to Boris Johnson’s Brexit timetable has, at the very least, limited the possibility of a disorderly Brexit and enabled business leaders to plan for the future with a quiet confidence.

However, questions still remain about the future of the technology sector. As one of the UK’s rapidly developing industries, one can’t help but wonder how the volatility of the last decade might impact its future prospects.

A quiet confidence

At face value, it would appear that the UK technology sector has remained resilient in the face of uncertainty. Indeed, in a recent survey of over 100 UK tech start-ups, 75% were confident of their growth prospects over the coming 12 months.

What’s more, a similar number (74%) believe that their business will grow over the coming months.

It would appear that such confidence is not unfounded. In fact, the first seven months of 2019 alone saw the UK tech industry attract an average of $1bn a month in investment.

Access to talent appears to be the driving concern among the majority of the UK tech sector

This is one-and-a-half times the amount raised during the same period the year before – an astonishing result, despite the UK being at the height of Brexit uncertainty during this period.

However, such investment and optimism does not mean that the sector is without its concerns, especially when it comes to planning for a post-Brexit world.

It is vital, therefore, that the Government understands these concerns, to ensure that they do not hinder the future of the sector.

Concerns of the sector

Access to talent appears to be the driving concern among the majority of the UK tech sector.

Given that vital tech roles, such as graphic designers, are already in short supply, it’s no wonder organisations are worried.

Indeed, 73% of start-ups expressed they were worried about their ability to hire staff with the right still set over the next 12 months, highlighting a potential hindrance to sector growth.

Perhaps unsurprisingly, Brexit is also causing anxiety among start-ups, with 69% of those surveyed worried that leaving the EU would make it difficult to hire the staff they need to enable business growth.

Consequently, many are demanding decisive action from the Government, with the same number (69%) claiming to support the prime minister’s proposed points-based immigration system, provided that it grants skilled tech workers better access to the UK.

So, with the UK tech sector clearly vocalising its concerns, the question now is what action the government will take to offer some much-needed reassurance.

Where can we go from here?

The Government must be swift in showing its commitment to working closely with the tech sector, to adequately address organisations’ main concerns and nurture future industry growth.

This can be achieved in various ways. First, the Government must ensure that skilled workers from outside the UK are able to enter the country’s tech sector.

 



 

This will reassure start-ups that the Government is reducing the possibility of a workforce deficit and enabling them to plan for future growth with greater confidence.

However, the Government should not stop there. It should also look to increase investment in home-grown talent.

An increase in funding for tech education will ensure that younger generations will be able to leave school, college and university with the right skillset to enter into the UK tech workforce, and most importantly, bringing with them fresh and innovative ideas that will drive sector growth.

Naturally, such changes will take time, and the tech sector will need to exercise some patience. However, it is vital that the Government clearly communicates its commitment to working with and nurturing the industry’s growth ambitions.

Only then, will the UK’s tech sector be able to plan for the future with greater confidence.

 

About the author:

Ritam Gandhi is CEO of Studio Graphene

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