After a historic vote out recently, Britain has decided to leave EU. The decision itself was a surprise for the rest of world and so might be the implications of this decision. Although the enforcement of decision is likely to come in action not until October this year, but we have already started seeing the impact it has made on the tech and IT industry.
Now that the decision to back leave is made, there has been mixed opinion observed among seasoned professionals of the IT industry. Among them, few comment the EU leave as a disaster for the IT industry of the UK and say that it will impact technology in the worst way. Not only this, they also raise concerns on deteriorating impacts on research, development and job market for the given sector.
While on the other hand, the majority believes that Britain’s exit from UK will have a positive impact on the opportunity market for the locals. Segregation of booming Eastern European IT industry will not help boost a healthy competition but also will UK to harness talent within.
With that said, let’s take a look at 5 most protuberant ways Brexit will affect the technology and IT industry in the UK.
- A blow to European Tech firms with main offices in UK.
A ‘for’ decision to Brexit has given a massive blow to European software development and IT firms operating in the UK. Being a part of EU made a lot of things easier in terms of tax regulations, license to business terms, employment regulations, etc. With the exit, everything will take an about turn and things have to be started over. According to a statement by one of leading European IT firm operating from the UK: ‘Leaving the EU showcases some challenges for the tech sector in the UK, while London in particular has enjoyed a long period of being the European center for technology development.” No matter what decision may these firms take as to choosing a region for their core operations, it will in anyway have a financial impact on UK’s economy.
- Change of skill-set exposure to IT firms.
Several technology firms, especially the tech start-ups have enjoyed an amazing pool of talent for a long time. Having access to a skillful pool of talent across Europe was a blessing in disguise – which most IT firms will definitely miss. Most of the work-force employed by various IT and software development firms have been EU nationals. With the Brexit, they either would have to obtain British nationality or UK government would have to work very hard to retain a huge amount of population contributing to their economy.
- Availability of funds for startups.
UK has been one of the most looked forward to hubs for seeking investment for a technology startup. East London has invested in several and witnessed acceleration of many startups working out of Europe. With such grounds already set, it was shock to come across a decision as of Brexit. Several investment firms and venture capitals have already warned that if the negotiations succeed and Britain decides to leave EU, they will stop investing any further in local firms. Definitely an impact which should accounted for.
- Data security.
When speaking of technology, one can never ignore the fact of data security. Several questions have resurrected as to where will the data be stored now, what security measures will firms take to secure data, what regulations at government level will be set for breach of data, etc. Such questions regarding data management have created a lot uncertainty among people who already had several concerns on data security breaches.
- A stop to research grants.
Exiting from EU implies that UK will no longer have the privilege to receive massive research grants as it had been receiving in the past. According to statistics, from the year 2007 to 2013, the EU funded almost £7 Billion of research expenses. Although British officials in this perspective claim that their contribution to such research programs was equally injected, it is only a matter of time they will be able to pick the funding pace as it used to be.
In a nutshell, several positive and negative implications will and are taking place after the vote out for Brexit. However, the fact of the matter still remains, how soon can Britain overcome the negative impact caused by the vote out.