When I first decided to write this article about the British tech sector after Brexit, I was determined not to produce another lamely coined ‘remoaner’ article. Prime Minister Hugh Grant (in the movie Love Actually) said about Britain ‘We may be a small country, but we are a great one’ a quote I believe to be true regardless of the Brexit decision.
Despite the gloomy atmosphere which has lingered since the vote I wanted to show that there is still room for hope and optimism. The British tech sector, in recent years has outperformed all its European neighbours it is said that 31% of all European tech companies are started in London. Reason why London has been crowned Tech capital of Europe, surely this is not about to change after the decision of June 23rd.
I soon started to see signs of a resilient sector after attending a ‘WeWork’ event hosted by ‘Barclays Entrepreneurs’. It was evident that there was still a lot of fight left within the sector. There was talk of the pound weakening being of benefit to those who wish to attract foreign investment.
This theory has been backed up recently by Venture Capitalist Suranga Chandratilake who said ‘traditionally expensive UK employees are looking cheaper.’ Despite the vote to leave, Britain’s economy is still performing a lot better than that of many of its European neighbours. UK based Deliveroo has recently attracted funding of £275m. Tech giants Facebook, Google and IBM have reiterated their desires to expand offices in London all of which comes as a significant confidence boost for tech companies based in the capital. London is continuing to lead the way.
The UK government has announced that it plans to invest more than £1bn in the UK’s digital infrastructure. Along with that they are set to start a £23bn investment fund to help boost R&D. Sending a message out to the world that Britain remains open for business.
Despite all of this you cannot help but notice the dark cloud on the horizon. Worries and uncertainties continue to grow within the sector. The uncertainties over what type of Brexit we face have proved to be a major concern to UK Tech companies. A survey conducted by Tech City UK found that 70% of people who work in Tech want clarification on the residency of EU nationals’ ability to work and live in the country. The British Tech Sector is crying out for some answers to key questions surrounding immigration and Britain’s place in the single market.
Smaller Tech firms have been hit the hardest by the uncertainties. There was an almost instant fall in the amount equity raised from crowdfunding in the first three months after Brexit. Dealroom.com’s data shows a 36% fall in investment in the UK compared to the same time last year. This uncertainty is likely to continue with the present government remaining tight lipped over its aims in the Brexit negotiations.
The UK is the European home for a number of leading Tech firms and as we have seen there is still a lot more it can offer the world. The UK government has shown its desire to maintain the country’s position within the industry but it faces stiff competition. Adeo Ressi a US born entrepreneur and investor has pointed to Berlin as possible future home for Tech firms post Brexit others have suggested Paris. Whoever the competition may turn out to be the government has to do more to show the world that Britain still remains the place to be in Europe and they must do so soon. There is only so long a sector with so much life and energy can remain optimistic in such uncertain times.
About the Author
This article was written by Samuel Ampah who is a Trainee Accountant on our Audit and Accounts team in our London office. Sam is also heavily involved with the Tech sector and is a member of our specialist Technology team.