Brexit will threaten just about every sector of the UK’s economy, but one industry that will be keenly monitored is tech. Luckily, the sector hasn’t been doing badly at all. According to the Tech Nation Report 2018, the digital tech sector is growing faster than every other sector of the UK economy by as much as 2.6 times.
In 2016, it was estimated to be worth £170 billion and that figure has climbed to nearly £184 billion this year. In addition, there are more jobs in tech, with employment rates rising by 13.2% between 2014 and 2017. From the report, we learn that 55% of the tech companies who responded are concerned about how difficult it’s going to be to access talent.
Industry experts are concerned that the tech sector will face problems like convincing global companies to operate in the UK at scale; attracting overseas investment; finding talent (particularly overseas talent); and reaching EU customers. While these concerns are widespread, there are also notions that many firms could benefit from Brexit.
Tech London Advocates founder Russ Shaw believes that one key factor that can help the tech space prosper is collaboration. He suggests that the UK must learn to explore new economic opportunities around the world beyond what Europe can offer.
The kind of collaboration Shaw thinks we need is one that will help us build knowledge exchange system and facilitate connections between businesses. Cocoon Networks’ China-UK Hi festival is an example of the kind of connections we should be looking at as China in particular is a tech powerhouse.
Shaw believes UK tech entrepreneurs can benefit from an international network of tech hubs that are closely connected. He is of the opinion that there ought to be policies which indicate that the UK is inclusive and open enough to play with global partners and ultimately, prosper on the international stage. To facilitate this, a flexible and dynamic immigration system is essential in that it needs to be able to adapt to the tech sector’s requirements.
Some believe that a weakened pound could be good in the long run, especially for certain kinds of stocks and the tech sector. Analysts at investment firm Schroders believe that tech could win big from Brexit, given enough time. This is because it earns a significant amount of foreign exchange. According to head of UK and Europe equities at Schroders Rory Bateman, most firms have a high percentage of income coming from abroad and this applies to both hardware and software, including cloud hosting solutions.
Even as we can expect the tech sector to do well, many tech companies remain reliant on a work force comprising talents from across the world. Bateman thinks the ability of companies to keep their competitive advantage can be negatively affected if they find it difficult to get top talents and retain them. That being said, the tech sector is looking good.