Tuesday , 20 November 2018

Brexit-related concerns remain key for UK tech, says UK gov report

Two out of the highest three challenges going through tech firms within the UK’s high two tech clusters are associated to Brexit, in keeping with a UK government-backed report, and for a lot of the remainder of the nation.

That at the least is the one potential conclusion from the discharge at the moment of Tech Nation 2018, the UK’s annual state of the nation’ report on the nation’s tech sector. This 12 months’s survey interviewed 3,428 individuals members of the UK tech neighborhood, together with founders and employees in tech firms, however has been closely spun to de-emphasise the consequences of Brexit on the UK tech business.

The report acknowledged that the highest three challenges in London and Cambridge (which accommodates the world-renowned ‘Silicon Fen’ tech cluster) had been:

1. Entry to expertise (which will probably be affected by immigration guidelines earlier than and after Brexit)
2. Value of dwelling
3. Brexit

Cambridge’s had been:
1. Value of dwelling
2. Entry to expertise (once more, affected by Brexit)
3. Brexit

Outdoors of London, as soon as once more, two out of the highest three essential considerations can be affected by how immigration will play out earlier than and after Brexit.

In the remainder of the nation, entry to expertise was cited as the most typical problem – affecting 83% of the UK’s regional tech clusters. Entry a funding was a high Three problem in 49% of clusters and unhealthy transport hyperlinks had been additionally cited.

Funding is clearly additionally Brexit-related, on condition that funding from the European Funding Fund has collapsed for the reason that Brexit vote.

The European Funding Financial institution has slashed deals with UK VCs and personal fairness teams by greater than two-thirds, with no equal funding from the UK authorities in sight.

The large minimize pushed the UK out of the highest spot on the essential recipient of EU enterprise funding, which is the only largest supply of early-stage capital in Europe. France and Germany have now overtaken the UK as the principle recipients of capital from the European Funding Financial institution. UK VCs have expressed concern that the lack of EIF funding may have a “important” impression on funds.

Nevertheless, you in all probability gained’t get that impression from the way in which the report is being pitched to the media at a lavish launch within the centre of London at the moment. As a substitute, the report is stuffed with heady statistics concerning the UK’s booming tech business.

The report additionally makes completely no point out of the impact of the UK leaving the EU’s Digital Single Market.

Regardless of dampening down the impact of Brexit on the UK tech business, the report oddly highlights that tech firms should proceed to attract expertise from exterior the UK, even because the UK authorities continues to argue about what kind of Brexit it wants and has been embroiled with the Windrush immigration scandal.

The Tech Nation survey discovered London tech startups have the fourth most worldwide workforce on the earth, behind Singapore, Berlin and Chicago, with 54% of employees born exterior the UK.

In different phrases, with over half of London tech employees born exterior the UK, Brexit and its impression of the longer term immigration standing of much-needed tech expertise will proceed to overshadow your entire challenge.

The report additionally discovered that extra black, Asian and ethnic minority employees are employed in London’s tech scene than throughout the UK generally (15% v 10%).

It’ll hardly be of any succour them then {that a} recent report by the United Nations ‘particular rapporteur’ on racism discovered that Brexit has contributed to an atmosphere of elevated racial discrimination and intolerance. Different UK-based reports say there’s been a pointy rise in reported hate crimes for the reason that EU referendum.

And over 1,000 younger Jap Europeans who took half in examine by researchers from the colleges of Strathclyde, Plymouth and Durham, discovered increasing levels of racism and xenophobia of their neighbourhoods for the reason that Brexit Referendum.

Hardly the welcoming atmosphere Britain must fill the numerous jobs in tech proper now.

The remainder of the Tech Nation report outlines how the UK’s giant tech business, which has benefitted from the entry to expertise afforded by EU membership, continues to develop. Nevertheless, the report can hardly declare independence from authorities because it was launched and backed by HMG’s Digital Secretary Matt Hancock.

The report’s additional claims, which aren’t independently verified, embody:

  • The UK was within the high three nations on the earth for complete capital invested in digital tech firms in 2017, behind the US and China.
  • UK tech firms have extra overseas prospects than firms in Silicon Valley. In London, 33% of tech firm prospects are primarily based exterior the UK, in comparison with 30% in Silicon Valley and seven% in Beijing.
  • Digital tech firms in London are “probably the most linked in Europe”, second solely to Silicon Valley for worldwide connections. Twenty-five per cent of entrepreneurs the world over report having a major relationship with two or extra entrepreneurs in London, in comparison with 33% for Silicon Valley.
  • London tech startups have the fourth most worldwide workforce on the earth, behind Singapore, Berlin and Chicago, with 54% of employees born exterior the UK.
  • Tech communities throughout the UK are “extremely optimistic” concerning the progress prospects for digital tech firms of their native space, each when it comes to scale and variety of companies
  • Tech is increasing 2.6x quicker than the remainder of the UK economic system
  • Turnover of digital tech firms grew by 4.5% between 2016-17 in comparison with UK GDP which grew by 1.7% over the identical interval
  • Digital tech sector value almost £184bn to UK economic system, up from £170bn in 2016

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