By Ivan Mazour, CEO and Founder, Ometria
We constantly hear that “Brexit means Brexit”, but the realities of the UK’s departure from the EU have been far more complex.
The UK’s post-Brexit future is still very much up in arms. For tech entrepreneurs, investors and CEOs, the lack of clarity means that we are still asking ourselves: what will the UK look like post Brexit, and what will it mean for the UK’s burgeoning tech sector?
Despite these looming questions hanging over the industry, reports show that the tech sector remains strong. Wages remain high, job growth is still outperforming other sectors of the economy and investment into UK tech companies still outweighs the rest of Europe. However, this doesn’t mean that tech and startup CEOs should be complacent in the face of Brexit.
Whatever the deal – or lack of deal – many in the tech industry hold very legitimate concerns that Brexit will result in economic uncertainty, a reduced pool of talent and lost opportunities.
According to research from NIESR, in the case of the PM’s deal passing parliament, GDP is set to be 4% lower than it would have been if the UK had stayed in the EU – and even worse in a no-deal situation.
Meanwhile, concerns over data policies and how data can be shared in a post-Brexit environment are serious threats for any forward-thinking business who rely on data as the lifeblood of their business. The realities for the tech sector are therefore clear: Brexit is a fundamental long term challenge for the UK tech sector.
So how can tech companies prepare for the UK’s departure of the EU?
Attracting talent post-Brexit
Brexit poses a real threat to the ease with which cross-border hiring can take place, and crucially may create barriers that will put off potential hires from applying to UK companies in the first place. The biggest hiring concern is developers: a task that is notoriously challenging in London already, and often requires overseas recruitment efforts to find the right person. With Brexit, this process could be made even more difficult once EU nationals are harder to employ.
The government has attempted to reassure EU nationals and businesses by reaffirming the rights of already settled EU nationals. For example, the government has removed the fee to apply for settled or pre-settled status. However, it still hasn’t done enough to reassure business and tech leaders than the UK will remain an attractive destination for new EU tech migrants.
On the contrary, EU nationals haven’t been relocating here just because it’s been easy. People are attracted to the UK because we boast many of the most forward-thinking and transformative tech companies that attract the most ambitious individuals, who thrive on the pursuit of innovation.
Companies that can think in smart ways and take proactive measures to attract these individuals will always thrive. From experience, we’ve found that the key to attracting the best talent is to hire those people who share our core values, and that in turn attracts like-minded people.
To that end, at Ometria we run both competency and values-based tests for applicants so we know that not only can the candidate do the job, but do it in a way that translates well into our ethos. Putting culture first is essential for any growing business, and diversity of thought and background is the most important ingredient for that.
UK tech at the forefront of innovation
The UK’s decision to leave the EU doesn’t just disrupt freedom of movement: it also has a huge impact on data. The government says that the UK “will seek to maintain the stability of data transfers between the EU, Member States and the UK”, but the lack of detail on how the government plans to deliver this outcome is a major concern.
The House of Lords points to worries around what this could mean and the possibility it will put the UK at a competitive disadvantage. This is particularly serious given the fact that around 75% of the UK’s cross-border data flows are with EU countries.
The ability to access and interpret data is vital to the whole business ecosystem, not simply the tech companies. From retailers to service providers, many businesses rely on data in order to understand their customer-base and interact with them in personalised ways.
Consumers increasingly expect a Netflix-style hyper-personalised experience with every interaction – and the loss or interruption of data flows from the EU would spell trouble for this, ultimately impacting the experience that the end-user has when interacting with their favourite companies. Ultimately, data empowers businesses of all kinds to understand their customers as individuals, rather than decimal points.
Given that many businesses are increasingly cross-border, data must be able to flow freely across different regions, and a no-deal Brexit threatens the UK’s ability to do this. This means that tech companies, brands and consumers alike, will suffer in the case of a deal that limits UK organisations’ access to data. The government needs to be clearer on this issue, and fast, to enable the kind of innovation we now expect from UK tech start-ups and organisations.
In a no-deal scenario, Brexit threatens the UK’s position as the centre of European tech investment. It was a vote towards isolationism in an ever-connected world, and there’s a possibility that, post-Brexit, the UK will potentially attract less investment from other areas in the world.
In order to overcome the potential problems caused by this, and for the UK to remain a hub of world-leading tech innovation, businesses need to work harder to prove themselves. Investors will always follow the companies most likely to succeed.
We continue to attract investor attention due to the fact our AI solution genuinely revolutionises the ways our retailer customers process and use data to personalise for the customer, leading to fast growth – something investors can sniff out a mile off, EU or no EU.
Carving a strategy for success post-Brexit requires tech companies to be proactive in ensuring they have the culture, talent and ability to manage the waves of uncertainty that the UK will undoubtedly face as the country leaves the EU.
All of us in the tech community need to make sure that we are aware of the scale of the challenge that Brexit presents in order to remain a hotbed of global innovation.