In the UK, technology businesses are booming. In fact, since the Brexit vote in 2016, the number of new companies in this sector has continued to rise. The figures speak for themselves: in the eight months post-referendum, the amount of new tech businesses launched increased by more than 100%.
As an industry that was overwhelming for remain, this growth may be surprising. However, despite the boom, this is a sector that continues to face uncertainty about the impact of Brexit.
Here is how Brexit could affect UK technology companies.
Staffing Limitations
Tech firms could soon face challenges when trying to hire talent from the EU. Although this is not an issue that solely affects this industry, it is a sector that often attracts candidates from overseas. While it is thought there will be no immediate changes post-Brexit, it is unknown if EU employees will be permitted to stay in the UK long-term. As such, this could lead to a skills shortage in one of the UK’s fastest growing industries.
Tariffs and Trading
As part of Brexit, the UK will – in all likelihood – be leaving the Single Market. This means that British businesses will no longer enjoy free trade with the EU and instead, be subject to trading tariffs.
While large logistics firms like InXpress are preparing for changes, how much this will impact individual tech businesses will depend upon which markets they currently access. For example, a British tech business that has a large customer base in America or Asia, will be affected less than one that trades solely in the EU.
International Business
London is currently the UK’s tech industry hub. While the number of British tech startups is higher than ever before, it is facing competition from the EU with Paris now bridging the gap.
After leaving the EU, it is possible that other major European cities, including Paris, may become more attractive to international firms. This could see the UK, and particularly London, become less appealing to overseas investors.
Data and Privacy
On 25th May 2018, GDPR comes into force. Passed by the EU in 2016, the General Data Protection Regulation provides businesses with a set of rules with regards to managing personal data. This will apply to any business that operates within Europe, meaning it will affect British tech firms, even after Brexit.
With less than one year until Brexit, British tech businesses are naturally becoming increasing concerned. As such, while the industry is expanding rapidly, leaving the EU could still pose many limitations on the sector.
