The Expected implications of Brexit on the UK Tech Sector
The tech sector currently accounts for about 10% of the UK GDP and represents one of the most growing industries in the country. Britain has more Unicorn (billion-dollar) tech startups than any other European country which has prompted economists to label it the Unicorn capital of Europe.
In 2020, when many businesses were grappling with the effects of Covid-19, more than 5 UK tech startups attained Unicorn status.
But, the pandemic is not the only threat to the UK tech industry. There is also the effects of Brexit to worry about.
As of January 2021, the UK is officially out of the EU and this will impact how people move and how business is conducted between the UK and EU nations.
In this post, Tech News Pros explores what Brexit means for 4 key areas in the tech sector.
The implications for tech companies
For tech business owners, one of the major concerns is trademarks and industrial designs. Fortunately, since the UK opted to make a deal, all trademarks and industrial designs that are currently registered in the European Union will still include operations in the UK. However, going forward, the registration process for new licenses and trademarks will follow different procedures for the UK and other EU members.
On the upside, Brexit represents a business opportunity for tech companies as businesses look to leverage technology to stand out. For instance, with the uncertainties surrounding the handling of data post Brexit, we are going to see an increased demand for cloud infrastructure.
We have already seen how businesses capitalized on tech solutions like remote working software to get ahead of the pandemic.
And while Brexit affects how UK businesses collaborate with other businesses in the EU, it also opens up an opportunity for these businesses to collaborate with other nations like Japan, US and other European nations that are not EU members.
The impact on data flow
How data is shared between the UK and EU nations will depend on the data regulation laws that the UK sets to replace the EU GDPR and whether the EU Commission approves the UK as a safe country for its members’ data.
Nevertheless, Tech News Pro is confident that both parties will find a healthy compromise seeing as data is a key asset in the decision making process for businesses both in the UK and other EU nations.
Failure to reach an agreement on data flow would leave businesses with a hard and costly task of finding legal mechanisms to enable them to legally share data between themselves.
Travel regulations arising from Brexit will affect the UK talent acquisition
The free movement of people between its member countries has to be one of the main benefits of being in the EU. However, with Brexit now official, non-UK residents coming into the country will be subject to British immigration laws.
This might discourage foreigners from wanting to work in the UK and seeing as 8% of the current workers in the UK tech sector are from the EU, you see how the sector stands to lose. Worse still, reports indicate an increased demand for professionals such as developers and cybersecurity experts that the UK can’t fill on its own.
The good news is that the government will be putting up measures such as allowing EU workers in the UK to apply for settled or pre-settled status free of charge to encourage them to stay in the country.
The impact on investments in the tech sector
In 2019, investments on the British tech sector rose by 44% to reach a record $13.2 billion. Growth will not have been as significant in 2020 due to the pandemic and experts fear that Brexit could have further ramifications on investment.
Almost half of the investments in 2019 originated from the US and Asian investors who saw the UK as their gateway to the EU. That gateway has now been closed.
Nevertheless, the UK tech sector can still attract investors if it maintains a pool of talented workers and leverages on current and emerging tech to stand out.
After all, investors are attracted to businesses with the best chances for success.