Uncertainty and speculation are rife over Britain’s departure from the EU but, despite this, it has been a golden period for UK tech. With multi-billion pound exits and venture capital (VC) funding at record highs, it is unlikely that this will come to a halt – instead, there may be a shift in emphasis for the sector as a whole.
Technology start-ups can still thrive post-Brexit due to the reasons why they succeed – they need access to capital, access to talent and access to markets, and post-Brexit Britain should remain well positioned on all three.
Britain has access to capital because, despite the uncertainty surrounding Brexit, London & Partners data last year showed the UK raised the most venture capital in 2017 at £2.99bn – four times more than Germany which placed second at £694m. As well, The British Business Bank – Britain’s state-owned bank tasked with providing credit for small and medium businesses – is flush with new cash, and has picked up much of the slack left by the European Investment Fund.
Post-Brexit, access to talent may be an issue, as software engineers from across Europe joining UK start-ups has been crucial to the UK tech boom; therefore, the end of freedom of movement for EU citizens makes it more difficult to secure said talent. Despite this, the UK will likely be able to still attract talent, due to the UK’s Tech Nation Visa Scheme. This is one of the most generous in the world for extraordinary individuals – and the number of available visas has doubled over the past two years.
As well, Britain has access to talent through its strong universities such as Oxford, Cambridge and Imperial College London and these types of institutions will continue to provide the tech industry with world-class talent.
With regards markets, as the UK is leaving the world’s largest single market, this could cause a problem. Nevertheless, this affects tech start-ups less than other types of companies. For example, Israel as the original ‘Start-Up Nation’ demonstrates that a small market needs to think globally from the start and, as the UK has fundamental strengths such as a favourable time zone and the English language, the UK will be an attractive prospect for launching a global company.
While Britain is still in a period of uncertainty, the UK still does have many strengths, particularly in the context of UK tech start-ups – but it is not just this industry that is planning for growth. Other UK start-ups are looking ahead with positivity, with Erin Platts, Head of Relationship Banking (Europe) at SVB stating, “…81 per cent of UK start-ups are planning to expand their workforces in 2019. The fundraising landscape also looks healthy, as 75 per cent successfully raised capital last year. In addition, 83 per cent say they have no plans to move their headquarters from the UK, underscoring the optimism that still exists despite Brexit related uncertainty.”
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