Just yesterday, the Prime Minister committed additional funding to the UK tech sector along with another thousand visas for world-class talent. Whilst policymakers and journalists celebrated the return of tech to the agenda of Number 10, the response from tech entrepreneurs, founders and businesses was somewhat more subdued.
Why? Research from tech leaders in London has shown that the capital’s fastest growing industry is already feeling the strain of Brexit. One in three tech companies has experienced a potential hire fall through as a direct result of Brexit. Two thirds believe Brexit has negatively damaged London tech’s global reputation, having a direct impact on investment and sales opportunities.
The scale of the challenges facing tech companies as a direct result of Brexit puts the government’s announcement into perspective.
UK tech companies will need to fill hundreds of thousands of extra jobs by 2020 – significant multiples more than the number of new visas being introduced by the government. The European Investment Fund invested £2bn into London tech funds from 2011 to 2015 – which dwarfs the £61m promised in the upcoming Budget.
Theresa May is absolutely right that the UK tech sector has proved Brexit fears wrong, but this success shouldn’t be politicised.
The support of Number 10 sends a useful and important message to the international tech community, but London tech companies, for example, are thriving because they are ignoring some of the domestic turmoil and focusing on growth and a new international tech landscape.
According to the Tech London Advocates research, the London tech community believes future investment will come from North America (32%) and East Asia (25%), rather than Europe (14%). Rather than waiting for government endorsement, tech entrepreneurs have been out there building relationships with these international tech hubs – courting investors, customers and buyers to celebrate London tech as the ‘go-to’ destination for world-class tech innovation.
Since the EU Referendum, Improbable has received $500m from the SoftBank Vision Fund, ARM was acquired by the Japanese arm of SoftBank for $31bn and Twitter paid $150m for AI firm Magic Pony. These are British tech companies attracting the attention of the largest tech companies and funds in the world.
These would be significant investments in any country or tech cluster – whether that be Silicon Valley, Bangalore or the Pearl River Delta. The private sector isn’t proving Brexit wrong, it is getting on with business and building valuable businesses.
One area in which government can undeniably play a role is immigration. Perhaps it is a sign of how politically toxic the debate around immigration has become that 1,000 new Tier 1 visas are so cherished.
The facts are simple. The UK is not producing tech talent fast enough to meet demand. There are many examples of fantastic digital skills and coding initiatives but they are yet to scale to the point where they can satisfy the growth of tech businesses over the coming years.
As such, our visa policy and immigration system require a substantial overhaul, particularly when considering that hubs around the world, most notably Canada, are developing immigration systems that are open and welcoming to top talent. Significant changes to the Tier 2 visa system, which will be for the bulk of skilled migrants is needed, and needed soon.
The UK tech sector can compete on the world stage and the private sector is championing the capital as a globally competitive tech hub built on a diverse ecosystem of talent in spite, not because of Brexit.