Back in 2010, David Cameron gave a speech in Tech City, setting the ambition for the UK to challenge Silicon Valley’s dominance, saying he was ‘firmly on the side of the high-growth, highly innovative companies of the future’.
Giving him credit where it’s due, in many policy areas a lot of progress has been made, including on tax, intellectual property, infrastructure, regulation, trade promotion and digital government. Things can still keep improving (and see Coadec’s Startup Manifesto for some ideas how), but lots of the low hanging fruit have been taken.
The big area where things have gone backwards is on immigration policy, and this is where the next government must make progress.
There should be two aims for visa policy when it comes to the digital sector: first, encouraging entrepreneurs to launch their business in the UK, and second, making it easier for digital businesses to hire top talent.
Attracting entrepreneurs
We should be in no doubt about the value of migrant entrepreneurs. Data from the VC firm KPCB shows that 60% of the top US tech companies were founded by immigrants or their children, with companies like Google, Ebay, Yahoo, and LinkedIn all founded by 1st generation migrants. Here in the UK, one in seven of all companies has been founded by a migrant entrepreneur, and many of our leading startups, including TransferWise, Seedrs, Skimlinks, DueDil and YPlan were founded by international teams.
The UK competes to attract entrepreneurs to launch their business in the UK. Founders can shop around for the best place to launch, and the visa system is a big determinant in that decision.
But despite the introduction of an Entrepreneur Visa, it is still far too difficult for founders to come to the UK unless they have VC backing or significant personal wealth. Entrepreneurs with funding commitments from angel investors, friends and family, or crowdfunding platforms, often the most readily available sources of capital are not eligible.
This is in contrast to other countries with simpler requirements – Migreat have a good comparison of the best countries for entrepreneurs.
Helping startups hire
Digital companies rely on hiring top talent, which can often only be found abroad – especially for emerging fields like data science. Yet policy has made things worse.
Highly skilled workers can no longer come to the UK under the old Highly Skilled Migrant system. The post-study work visa was scrapped, meaning that foreign students can no longer stay and work in the UK after they graduate from our top universities. And the Tier 2 system is costly and time consuming for startups that need to move fast.
So what can be done? A few ideas:
Post-study work visas should be restored, especially for STEM graduates at leading universities. It is nonsensical that computer science and engineering graduates from Cambridge and Imperial can’t stay in the UK to look for work once they finish their courses.
Third parties should be allowed to sponsor Tier 2 visas on behalf of startups – for example a VC fund or accelerator could take on the bureaucratic burden of becoming a sponsor. This would allow the startups to focus on what they do best, building their product, rather than jumping through Home Office hoops.
Finally, the Shortage Occupation List needs urgent updating to include digital roles. This would mean that businesses can fast-track applications, and not have to exclusively advertise roles in the UK for 28 days first.
Politics in the way
The politics of the immigration debate are tricky to say the least, and I’m not optimistic for much change to be promised during the election campaign, but on May 8th as the new government assesses what to do next to support the UK’s digital industries, they could do far worse than to start with immigration reform.