UK Tech Sector Reacts To Brexit: Some Anticipate Slow Down, Some Contemplate Relocation

In the aftermath of the United Kingdom voting to leave the European Union, UK's technology industry is reassessing its position, with many of them considering moving to a continental location. According to reports, Samsung, LG, and Acer have noted that the UK leaving the EU will affect their operations. From a BBC report:As news of Brexit broke, tech firms including BT, TalkTalk and software firm Sage reported share price falls. [...] "I have concerns that the local market might slow down," said Drew Benvie, founder of London-based digital agency Battenhall. From a report on The Guardian:Britain's financial technology sector is particularly hard-hit, with the prospect of losing access to European markets an unappealing one. "Fintech" has long been one of the UK's most promising growth areas, in part due to London's position as the financial capital of Europe. [...] Not one of the 14 billion-dollar tech firms based in the UK the Guardian asked said leaving the EU would be good for their business.Toby Coppel, the co-founder of venture capital firm Mosaic, said: "The next entrepreneur who's 22 years old, graduating from a technical university in Germany may, instead of moving to London to do their Fintech startup, decide to go to Berlin instead. I think that's one of the biggest concerns I have about the trajectory of the London technical ecosystem."

Comments

Don't Panic

[SuperKendall]

It's still really up in the air what "leaving" means, beyond "UK not subject to absurd EU regulations".

You can be pretty sure deals will be worked out such that mobility between EU states will be nearly what it was for professionals, doubly so for businesses.

The whole "financial disaster" angle is a load of crap, the pound is already re-stabilizing and didn't fall that far to start with!

Re:Don't Panic

[Hylandr]

The media has a tendency to turn a birds fart into disaster.

Re:Don't Panic

[Ash-Fox]

"The next entrepreneur who's 22 years old, graduating from a technical university in Germany may, instead of moving to London to do their Fintech startup, decide to go to Berlin instead. I think that's one of the biggest concerns I have about the trajectory of the London technical ecosystem."

Can we get stats on the last few years of 22 year old entrepreneurs from Germany that did a fintech startup in London?

Re:Don't Panic

[Kohath]

Because the same rich European elites who benefit from the pre-Brexit conditions will stand to benefit from those conditions mostly continuing. And they're the people in charge of the EU.

Re:Don't Panic

[Anonymous Coward]

Remember Norway is more or less an EU member, shares all the benefits and pays in but has no political power in EU. Benefits cost the same whether you are a member or not. UK was never a "full member", as UK had a lot of exemptions from rules and regulations while at the same time wielding political power. Power they wielded to make a mess of EU as possible.

Not having UK in EU might be a good thing, at least we'd have a lot less of bitching and bickering over nothing. The most stupid about this, is that if UK wants the benefits they will pay now full price as they will not have any political power in EU to reduce their members fee.

Re: Don't Panic

[Anonymous Coward]

WHAT smaller bureaucracy ?

A whole lot of that now has to be recreated, just for Britain. I'm sure there was a lot of pissyness "It's not ours" i.e. it's more expensive to buy our way through, but losing the EU doesn't automatically mean a drop in costs here.

Re:Don't Panic

[aepervius]

Firstly the "absurd" regulation angle is overrated : a lot of what people call absurd regulation were actually industry internal proposed regulation to offer standardization. Stop reading the sun or swallowing advert telling you stupid stuff about 109 pillow laws when in really it isn't.

Secondly it IS already happening. Some financial industry were allowed to be in UK because the UK was in Europe. If UK is not, those industry may not remain in London because by law they must be in a member state. So no matter the agreement , those have to GO.

As for deal being worked out, everybody be it the politician or the folk of each country , clearly said they won't give a good deal to the UK. Neither do they have an insensitive to ! They are already pressuring to have a quick brexit and short negotiation, which will almost certainly turn out not so good for UK.

Re:Don't Panic

[Anonymous Coward]

Because the same rich European elites who benefit from the pre-Brexit conditions will stand to benefit from those conditions mostly continuing. And they're the people in charge of the EU.

If the EU continues to treat the UK as nothing happened you can bet your ass the other big countries will give the finger to Germany and opt out as well. Starting from France and the Netherlands.

Re:Don't Panic

[Fire_Wraith]

The UK already had a pretty good deal, in that it basically was able to pick and choose - and even got extra concessions a few months back, in advance of the vote. At this point, further conciliation will only hurt the EU, because it will encourage other countries in the bloc to try the same, at which point, it won't be much of a bloc at all.

No, the EU is probably going to react very negatively, if only to make an example out of Britain. They'll play hardball, because economically speaking, Britain needs the other EU members more than the EU needs them (even if there will be pain all around). Look at where British trade goes now - something like 36% of it goes to major EU members. That's more than they trade with the USA and China combined (~20%), and that's aside from the fact that right now it's Britain using EU trade deals with the USA and China, not its own separate ones. The EU is going to insist that all its regulations apply to any products made in Britain that are sold in the EU, and at that point, it becomes cheaper for the manufacturers in Britain to apply the same to their domestic market. The reason the EU will do this is simple - they don't want France going "well we want our own special deal too." No, they'd rather freeze Britain out as an example.

Re:Don't Panic

[peppepz]

Exactly, the EU zone has only been beneficial to business

Yes, an open market is the best possible condition for creating jobs. That's what anyone with a basic competence in economy says, so there must be some truth in it.

and the Soviet Bloc countries (business moving there for cheap labor and eventually even further east was the whole objective for the forming of the EU). Before the EU and even now, similar business-friendly arrangements have been made amongst European and even Asian countries without any EU government involvement.

So the EU is evil, but also the EU doesn't matter, because rich people will move their businesses to China anyway?

The EU and later on the Euro destroyed the sovereignty of individual nations (now only nations by name only for traditions' sake),

People elect both their local governments and the European parliament. Their local governments nominate the European government and it also has to be approved by the European parliament. And that government has very limited powers to begin with. The EU didn't destroy our sovereignty any more than the administrator of a condominium destroys the flat owners' ownership.

Of course, if member states send into the EU institutions their worst politicians who failed at home, it's a problem. But hardly a fault of the EU.

the Brits were at least smart enough to maintain some of their distance when the Euro came along.

The Brits have, among other things, a religious leader as unelected, unreplaceable Head of State and Lord Spirituals sitting alongside elected members of the Parliament. To each his own.

The EU socialized the losses of its members on a continental scale (Greece etc) while the affluent Western Europe had their middle class evaporate to pay for it and many of those countries (Netherlands, Belgium and France) will soon follow the UK.

The EU budget accounts for 1% of the total taxes paid by European citizens, how can one see its wealth evaporate because of a fluctuation of up to 1% in his expenses? It's globalization what hit the middle class; it has allowed us to pay less for iPhones without automatically giving us back a way to pay for food and housing. But I can hardly see how being a smaller country in the global maket can help fight that.

Plus, this whole "the North paying for the South" subtly racist propaganda is toxic. Britain was the poorest among the big nations when it joined the EEC. Currently, it is France, Italy and Spain who pay for the British rebate and not the other way around.

Re:Don't Panic

[jonbryce]

That has happened because the situation in Northern Ireland has changed. One of the main reasons why they wanted Northern Ireland to become part of Ireland is because of the benefits than free trade and an open border with the South would bring. Being fellow members of the EU meant that they could have those benefits while still being part of the UK. After the border was opened, unemployment in Newry, a city close to the border, fell from 30% to 6%, thanks mainly to people from the South visiting the city to go shopping, and businesses being able to export their goods much more easily to the South.

Re:Don't Panic

[Barsteward]

the remain responded with facts (and a bit of over egging the pudding) but the small minded people are not really interested in facts, scare mongering headlines are all they read and unfortunately, the right wing papers are too eager to supply. Facts are always lost in a story.

Blown way out of proportion

[Anonymous Coward]

Every bit of damage done now is self inflicted. The UK is still the UK. No country has refused to do business with them. People who are panicking shouldnt be in the finance industry. This is going to make the people who invest very rich when everyone realizes what dumb dumbs they were for dumping their shares.

Considering our office in Newcastle...

[Anonymous Coward]

has zero people born in the UK and about sixty people born in the EU, this is going to hurt. The UK economy is driven by people that are not from the UK, even if the vast majority of the the people driving the economy aren't from the UK.

Re:Considering our office in Newcastle...

[ledow]

I can't share the exact quote with you, but my girlfriend is a Dr in a London hospital department. Her lab basically tells you if you have cancer if you are one of the millions of people who live in or around London.

In her department, which requires high-end medically-skilled professionals, her boss posted after Brexit. The basic gist was "Don't worry, everyone, your cancer diagnosis will still be safe in the hands of our department consisting almost entirely of Spanish, Italian, German, French, Polish, Greek, ...... personnel for the time being".

Throughout the NHS the picture is the same. Majority EU and then Non-UK workers. Or universities. Almost all the major universities have majority non-UK lecturers and professors (which actually means something here - a professor is a much higher grade of personnel than in the US, you'll be incredibly lucky to meet a professor outside of academia).

And it's not just as simple as "things will carry on". My girlfriend came over as an EU citizen. She has "leave to remain", so she can stay and live and work in the UK. But to get permanent citizenship, she would have to marry or go through a lengthy immigration process (including a stupid test asking questions about kings and queens that I, as a natural Brit, would be baffled by). Coming out of the EU could revoke that leave to remain. Nobody's sure at the moment and we only have two years to work that out.

If that's taken away, or the paperwork involved in heinous, or even if the process that's required is overwhelmed by all the EU people working in the UK suddenly applying to stay here, then you have quite a situation that is an awful lot of effort to sit through. And they are already disgusted and feeling unwanted because of the Brexit vote.

It's like a state voting itself out of the USA. Imagine how you'd feel as the out-of-state worker who's just been voted against, made to feel unwelcome, contemplating being in a "foreign" state, and may have to jump through all kinds of hoops to carry on your normal life that you've had for YEARS.

We're going to lose an awful lot of talent, from students coming to our universities to the lecturers teaching them, from the waitresses on minimum wages to the doctors earning a fortune. And there's no way that it will become a zero-paperwork process for any of the above, which just adds costs and hassle.

We're now basically a foreign country. If you're American you may not understand that - do you have automatic right to live in any other country in the world? Because before the vote, we have had that guaranteed for decades. We can just up sticks, go to Sweden and start up a life like anyone else, without even bothering with paperwork or visas.

We've (potentially) just thrown that in the bin, which means a lot of people who found that convenient and wanted to live in Britain are now unwelcome and may be forced to leave, or put under such scrutiny that they decide to go to one of the other dozens of countries just 30 miles away, where they don't have any of that hassle.

Watch the NHS, education, and the large businesses. They're all about to suffer, even if they don't immediately collapse.

Re:Considering our office in Newcastle...

[blind biker]

I can't share the exact quote with you, but my girlfriend is a Dr in a London hospital department. Her lab basically tells you if you have cancer if you are one of the millions of people who live in or around London.

In her department, which requires high-end medically-skilled professionals, her boss posted after Brexit. The basic gist was "Don't worry, everyone, your cancer diagnosis will still be safe in the hands of our department consisting almost entirely of Spanish, Italian, German, French, Polish, Greek, ...... personnel for the time being".

This is proof of class warfare at its best (worst): the financial elites have figured out that paying for highly skilled personnel educated in Britain was too expensive. It is much better to import highly educated but cheaper labor from abroad. Incidentally, Britain used to have effectively free higher education a couple of decades ago, but the same financial elites (who hold the real power, including political) decided that such social benefits are now unnecessary, since labor from abroad comes pre-educated.

Re: Congrats to Britain

[Anonymous Coward]

You mean England, which is the only piece of the UK which will be out of the EU in five years. Scotland will be independent, Northern Ireland will reunite with Ireland, and Gilbraltar will become a self-ruling part of Spain.

Scotland and Ireland can't separate

[Anonymous Coward]

Scotland would be loaded with 130 billion pounds of debt.

Re:From what I can tell

[RichPowers]

"I see similar signs from the U.S. (300 million people), where increasing polarization suggests different groups of people (not necessarily divided along state lines) seem to have different ideas for the best way to proceed, but are getting more and more upset at each other for forcing everyone to go either one way or another."

Montesquieu believed that republics could only survive if they were small. I'm sure this was influenced by his study of the ancient Roman Republic and how it turned into an empire ruled by autocrats and generals. (See "Considerations on the Causes of the Greatness of the Romans and their Decline" -- very readable and considerably shorter than Gibbon's more famous work on the subject.) The fact that tiny Switzerland is probably the most sensible republic in the West is due, in part, to its very smallness.

The Framers of the U.S. Constitution were familiar with Montesquieu; indeed, the entire point of the federal system was to (attempt to) harmonize the need for a stronger federal government to handle things like shared security and trade while still leaving considerable sovereignty to the states.

So to your point: if California wants to be the next socialist utopia with a massive welfare state and useless state-funded high-speed trains, have at it! Likewise, New Hampshire can go full libertarian. It's the whole "laboratories of democracy" concept – different ideas for different groups of people. Totally scalable regardless of population, if the federal government lets it happen, and lets states fail or succeed on their merits.

But Washington directs and influences too much of the economy, e.g., the military-industrial complex is a massive jobs and pork project for literally millions of people. The federal executive branch has so grossly overstepped its constitutional functions that it's horrifying and disgusting. Trump and Clinton would be far less dangerous to the republic if the office was considerably more modest and Americans didn't treat the President as some messianic figure who will deliver them jobs and other goodies! (Remember the days when presidential candidates ran "front porch" campaigns and submitted simple State of the Union letters to the congress instead of performing embarrassing and grandiose speeches?)

The problem in the Western World is the rolling disaster that's political and economic centralization. Brussels, Washington, the central banks, and other supporting institutions are all guilty. Among other ills, they create massive economic distortions (see the current college education bubble) and when everything inevitably explodes, they "save the day" – sort of like the fireman who burns down his own house and trumpets the great job he did later putting out the fire.

Lastly, dwell on this fact: the House of Representatives has had 435 members for almost a century, despite the massive growth in both population and size of the federal government. This means the ratio of citizens to representatives only grows more unfavorable, and at a time when it matters most! Concurrently, U.S. senators are no longer selected by state legislatures, leaving state governments without any way of directly influencing federal legislation. This is a total disaster for the federal republic and the chickens are coming home to roost.

Re:From what I can tell

[Calydor]

It is not only a matter of being too big, the EU spans too many countries with too varied economic backgrounds and stabilities.

I'm not only talking about Greece; the former east bloc countries like Poland are also a problem because they use the same currency but needs a lot LESS of it for the same gain. In an extremely simplified version, numbers completely made up:

In Poland, a loaf of bread costs 1 Euro. Hourly wage is 5 Euros.
In England, a loaf of bread costs 2 Euros. Hourly wage is 10 Euros.

So far, so good. Basic necessities cost the same percentage of your wage, not much difference. However ...

In Poland, a loaf of bread costs 1 Euro. Working in England for 8 Euros per hour lets you gain a lot more back home while wage dumping in a country that isn't your own. With enough people doing that problems start growing for the host country.

Public Serpants in Brussels and D.C.

[tanstaaf1]

If you haven't visited Washington D.C. recently you ought to. For our "Servants" in Washington, Money is clearly not an object -- they will drain every drop of blood from every private sector citizen in all 50 states, and derelict all other cities, to make sure they and their patrons are maintained in the style to which they have become accustomed. And then they will extract more. It hasn't taken the leaches in Brussels long at all to build their palaces and award themselves outrageous pay and perquisites. They have to keep up with the "Joneses" in D.C., after all. This UK vote was obviously not according to the Serpants' plan -- neither there nor here. I can hardly believe they didn't just print the money to "accidently" miscount the vote. I'm sure Obama/Clinton would have authorized a loan for that cause if asked. Look to Switzerland for a better idea of how it is possible to be part of the EU for purposes of trade yet still largely sovereign. This is a huge opportunity for the UK to pull itself out of the black hole which has been dragging down their economy for some time. Good for them. Too bad we can't do something equivalent over here.

Re:From what I can tell

[getuid()]

Not going to change much for the average person.

EU is a bunch of national politicians patronizing their voters first, by introducing unpopular laws and measures they couldn't possibly introduce directly.

Then it's the same national politicians patronizing each other across borders -- Greece, Italy, Spain, Britain, even Germany... everyone gets their share of being patronized against doing useful stuff, necessary for the middle and the lower class citizens.

Last but not least everyone is being patronized by Big Business, who's effectively running the EU.

If Brits succeed in exitting, then if anything, it will at least show the rest of the EU conuntries that doing things just "because EU" is not the only option. That hast at least a marginal hope of getting some useful change.

Don't get me wrong, the concept of a unified Europe is cool. But the EU is not a unified Europe, it's a patronizing institution run by business, for business. We can try this again in 20 years, properly done, startgin democratically first and economically later, not the other way round.