How Brexit Could Slow Down Innovation in the UK's Tech Industry

Britain's decision to leave the European Union could have a major impact on the tech industry, slowing down innovation and causing a red-tape nightmare for companies seeking talent from overseas. Not only will it be harder for them to employ skilled staff, major technology sectors in London and Bristol could slide into obscurity as the rest of the world seeks to trade with greater, more sustainable economies.

According to a March poll conducted by techUK, 70% of Britain's tech industry supported remaining in the EU, 15% supported leave, while 15% were left undecided. With such one-sided figures, it's no wonder there's still a deep sense of apprehension in the tech world.

One of the biggest worries is that new startups won't have the opportunity to compete with the massive U.S. talent pool. If the Freedom of Movement Act is abolished, it would make it far more difficult for skilled tech workers from across the channel to relocate. While the exact terms of the agreement are yet to be established, signs are pointing towards an Australian-like point system. While many British citizens were using Brexit as a means to control the influx immigrants, the tech industry, has the opposite agenda. In fact, most tech experts will agree that there's not enough of it!

Places like Shoreditch have undergone major changes over the last decade, moving from a relatively poor, East London district, to a major global player in the tech industry. It has even been given the nickname "Tech City" due to the large density of both established and startup companies in the video game and computing business. Immigration and the sharing of resources across boarders has served as a catalyst for this expansion. Despite many years honoring the Freedom of Movement Act, the UK still has a major skills shortage, and Brexit will only make things more difficult. This isn't ideal considering that, now more than ever, the UK's tech industry needs to perform at its very best.

But a slower rate of migration is just one of the dangers. The real challenge in the next two years will be to prevent an out-flux of tech workers. Many of Britain's crème-de-la-crème are now looking to protect their right to move freely between EU member states. And in doing so, the only sure-fire option seems to be to move overseas before Brexit occurs. This may permit workers to apply for duel citizenship in the future, and thus gain the ability to cherry pick where they want to live. Therefore, Britain could be left with a major lack of talent, resources and connections. Simply put, it's a concoction for disaster!

And it's not just the digital computing sector that could be affected. Many distributors and manufacturers working in Britain are also fearing the future. According to electric radiators supplier, Eco Stores Direct Ltd – who specialize in researching and negotiating trade deals with Europe's top environmentally friendly manufacturers – "the introduction of trade tariffs could levy on imports and make it difficult for businesses to trade in the Single Maket, even if access is granted." While the Digital Single Market is an entirely different beast and may remain unaffected, tariffs could slow down the trade of physical tech products, such as computer parts, phones and even microchips, as businesses try to navigate the choppy waters of the English Channel.

But it's not all doom and gloom!

On the opposite end of the spectrum, Britain now has a huge opportunity. Tech companies that don't trade in the European Union may find London an attractive base to establish their business or open up new subsidiaries. In addition, the data sharing industry could hugely benefit as they may no longer be subject to EU legislation, which could help Britain compete with large-scale American corporations.

But what will happen now? The British Government have made it clear that Brexit will be implemented; however, they've also made it clear that they're in no rush to speed up negotiations. Prime Minister Theresa May recently stated in a press conference with Germany's Chancellor, Angela Merkel, that she will not trigger Article 50 in 2016. Which at least gives British tech companies more time to limit any potential damage.

But all of the predictions really do mean nothing. While nobody is denying that the tech industry will be very different in the coming years (as it always is!), the most likely scenario is that Brexit will cause short-term turmoil and prompt companies to adjust their current business model. Whether or not this will lead to prosperity is still yet to be seen...