fbpx

UK tech startups ‘must be prepared for Brexit’

Brexit

Tech startups and other small businesses must be better prepared for the possibility of a future outside the European Union, according to attendees at a Brexit event hosted by cloud-based accountancy software provider Xero.

With the Brexit referendum looming, and scheduled to take place on 23rd June, participants at yesterday’s debate in London evaluated the impact that Brexit would have on small business enterprises.

Dealing with uncertainty

“What SMBs don’t like doing is trading in uncertainty and the prospect of leaving the EU is shrouded in doubt,” said Emma Jones, founder of Enterprise Nation.

Although participants agreed that businesses and the general public are generally uninformed, it soon became clear that startups must be better prepared both financially and logistically for the possibility of leaving the EU.

“Businesses seem to be grinding to a halt as confidence in the future falls,” said Amy Harris, co-founder of CrunchBoards.

As the debate progressed, questions were also raised about the potential cease of European funding in the form of the European Regional Development Fund and how this would affect areas that have hugely benefited from this kind of external support.

It was clear to attendees that businesses in the UK must come to terms with the idea that this funding might be pulled if the referendum vote results in Brexit. In so doing, startups and other small-sized firms must be prepared to cope with this, as there have been no clear indications that EU funding would be replaced from elsewhere.

Input in a reformed Europe

According to the Department for Business Innovation and Skills, small businesses accounted for 99.3% of all private sector businesses at the start of 2015 and 99.9% were small or medium-sized (SMEs).

Given that small and medium enterprises are considered to play such a significant role in Britain’s economic engine, participants at the debate believed these enterprises should have more input in European-level decisions if Britain were to stay in the EU.

James Swanston, CEO of Voyage Control agreed that if Britain does stay in, some things need to change. “There are some legitimate issues that the EU needs to deal with, as we can’t ignore that it is harbouring some failing economies.”

Millennial’s voting behaviour

With Brexit being such a hot topic in the media, it is hardly surprising that many publications are conducting polls in an attempt to gain insight into the eventual result on 23rd June.

“The polling shows that Brexit appears more popular among the over 50s than those below, and from our experience, connectivity is certainly the order of the day for younger people,” said Gary Turner, UK managing director at Xero, adding:

“Collaboration and international trading are naturally instinctive ways for younger generations to work while the older generations will be used to a more traditional style of business, which could explain the difference we’re seeing in the polls.”

A British Silicon Valley

The debate touched upon reports that some of London’s FinTech companies had openly said that they would consider moving their business elsewhere in the event of Brexit.

In fact, Reuters reported last month that seven out of 10 FinTech firms would move their headquarters outside of Britain if the country were to detach itself from the EU.

With tech startups increasingly emerging in the UK, attendants raised the question of whether a Silicon Valley equivalent would help to cement tech innovation in the UK and keep it here.

If Britain were to leave the EU, most participants agreed that the country had to develop a strong identity to make it an attractive home for an array of businesses.

To round off the session, Turner asked participants to share their views on whether Britain would vote to stay in or out of the EU.

Although 90% of those present said they believed the vote would be for Britain to remain in the EU, many questions we raised.

“London will almost certainly have majority to stay in, but the rest of the country is harder to gauge,” said Swanston.

What’s your take on Brexit and its potential impact on UK tech startups? Let us know in the comments section below.