Government research last week has shown that Britain is creating more $1 billion technology companies than any other country apart from the United States and China. This cheering news, revealed as London Tech Week began, shows that over the past twenty years, U.K. based entrepreneurs have built a staggering 72 companies that have exceeded the ten-figure threshold—known as “unicorns” in the tech industry. 13 of these companies have achieved unicorn status over the past year alone. For those of us looking for reasons to be optimistic about the country’s future (and who isn’t?!) this news has been very welcome. Despite unfavorable headwinds created by Brexit, the British technology sector is undeniably still disrupting and innovating—creating jobs and wealth. For those of us concerned about the sector’s long-term future, assurances were also given that tech businesses will be less exposed to a no-deal Brexit than their counterparts in other industries. For one thing, proposed changes to immigration policy, placing a minimum threshold on salaries for skilled non-British workers, would be less of an issue for the tech industry, where pay levels are comparatively high. Yet, as a tech entrepreneur myself, although I recognize and value the success of the U.K. tech sector, I would like to sound a note of caution. I agree that tech businesses are less exposed to a no-deal Brexit than companies in other industries but they are absolutely not immune and complacency could be very dangerous right now. The human cost of Brexit uncertainty There are so many issues negatively impacting businesses today, but for me the most important are problems being created with our most valuable resource—the people working for us. Tech companies are not made up of robots and algorithms, they are made up of people—many of whom come from outside the U.K. and are currently deeply anxious about how much longer they will be able to stay and be welcome here. Problems associated with hiring skilled E.U. workers and question marks over passporting rights are presenting many British business leaders with real challenges. They are also creating confusion and anxiety among workforces across the country in a range of industries–including tech. I am deeply concerned that if we do not address these concerns, and clarify our nation’s post-Brexit trading position, we could see a brain drain which would put an end to the U.K. tech industry’s hard-won success. Access to investment For entrepreneurs, the availability of finance is critical to seeing their business vision come to life. For many years, the funding landscape has benefitted from the European Investment Fund (EIF), the specialist provider of risk finance set up to benefit SMEs across Europe by enhancing their access to finance. Most VCs in London used the EIF to seed their funds, but since the Brexit referendum, the EIF hasn’t invested in a single fund in the U.K. The way in which entrepreneurs are supposed to access finance to grow their businesses is changing rapidly and most of us are totally unprepared for these changes. In tandem with this report on the strength of Britain’s tech sector, Theresa May announced investment of more than £1.2 billion to ensure the continuation of the sector’s success. This is hugely welcome and I’m sure will pay dividends to the country’s economy, but this cash injection alone is not going to fix the fact that the whole ecosystem is changing, there is so much confusion out there and nobody is injecting any clarity into the proceedings. I cannot believe that this won’t have a profound and negative impact on our tech sector. The impact on gaming My business is in the U.K.’s thriving games industry which, despite being in the tech sector, is particularly exposed to Brexit uncertainty. In a poll of the industry taken just before article 50 was invoked in March 2017, 40% of U.K. games companies said they were considering relocating to the E.U. after Brexit, because of concerns that they would be unable to deal with the ensuing skills shortage. I have no plans to operate from anywhere other than Britain but I have been approached by seven different sovereign states, all of whom are offering tech businesses like mine very attractive incentives to relocate. Other business leaders will also have been made similar offers. It feels like a matter of time before one of my peers moves operations away from Britain. No to no deal Before those of us in the tech industry breathe a sigh of relief and congratulate ourselves on surviving Brexit unscathed, we need to grasp the reality of the situation–the precise way in which Brexit is going to impact the British tech industry is not clear, but it will be significant and it could well be devastating. Precisely how it will hit the sector is unclear and it is precisely this uncertainty which is crippling many British tech businesses. We need to end the confusion, introduce clear-headed clarity and do everything we can to strengthen the industry. Our politicians flirting with the idea of a no-deal Brexit is a huge mistake and could imperil businesses like mine that have so far benefitted from our open infrastructure and welcoming culture. Now is not the time for complacency. Now is the time to ensure we don’t throw away one of this country’s greatest assets before it’s too late.
The Brexit’s failure to clarify its post-UK immigration position could lead to a talent drain from the thriving tech sector. In a 2017 poll, 40% of Brexit games companies said they were contemplating relocating to the EU after UK due to ensuing UK-induced talent shortages in the sector. EU countries are offering many tech firms attractive deals to relocate. The government's impending £1.2bn ($1.5bn) investment into the sector may not compensate for the ambiguity that threatens the industry.