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

Re:Don't Panic

[NotInHere]

Well yeah there are lots of ideas in the room. One is what maybe lots of the leave campaigners would like to see, is even more extra regulations only for the UK. Basically it gets all the profits without having to give its own share. Maybe even like the TAFTA where US companies can send their genetically modified crops to the EU? I don't know that this is something the EU will want to do.

Some things are really sure though:

1. The UK will need *some* countries to trade with. If its not the EU, then maybe some other country will do.
2. If the UK is given lots of extra regulations, other countries will demand this as well, like norway, or even current EU members. In fact already now there are demands coming in from current EU members.
3. The EU is in a much better position than the UK, simply due to sheer size. Threatening with an exit is always a good tool, but once you are out you have nothing to threaten with anymore, but still all the same problems.

Well lets see what the UK will do with that extra money they don't send to the EU anymore. Anyway, if they were actually paying what other countries of their size do, they would have spared lots more, but as they already had extra regulations within the EU, the part they have available now is much smaller.

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.

From what I can tell

[rsilvergun]

the trouble with Britain and America right now is that there's been 40 years of policy that benefits well educated upper middle class college grads and hurts blue collar workers. The Blue collar guys sucked it down in stride for those 40 years but it sounds like they're at their wits end. They're desperate to do _something_ but they don't know what. They've got a lot of ideology and beliefs that make it hard to go the Scandinavian Socialism route to solve their economic problems and there's no way they can compete on a global stage with slave labor let alone the coming robots. But they've got to do something Britain gets "Brexit" on over here we get Trump.

Not sure about the UK but 20 years ago phone polls would like the upper cast keep tabs on voting patters and focus their political campaigns, but now that everybody has a cell phone and you can't do polling calls to them the old political tricks aren't working. It doesn't do any good to have even unlimited funds if you don't know where to put them and you needed those phone polls to tell you what to do next. So Britain had no idea Brexit was coming (Cameron's resignation showed that) and the US is desperately trying to Stop Trump...

It's gonna get really, really messy from here on out.

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

[Mashiki]

You can find them all over the place. Many have also lost upwards of $20k/year because their wages were pushed down by companies bringing in 3rd world workers to do the same job. It's happened here in Canada as well, a company laid off all of their welders in the patch and replaced them with TFW's from SE-Asia. The guys were making $70k/year the new guys? $39k in turn wages were depressed when those guys went out to find new work. Two guys I met in the patch 3 years ago are making $59k now(that was 2 years ago when they found new jobs), that was the only work they could find.

So far the only skilled workers that haven't been hit are pipe fitters, machinists and mechanics(gas/diesel/jet), but they're trying really hard to push the people who live here in north america and are diesel/jet mechanics out and get TFW's or other replacements in.

Re:From what I can tell

[ultranova]

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 â" different ideas for different groups of people.

What happens when one of these collapses under the insanity of its economic idealism and the population takes refuge on the other?

The problem with the "laboratories of democracy" concept is that humans aren't lab rats and won't just quietly die in their cage if the experiment fails.

The problem in the Western World is the rolling disaster that's political and economic centralization.

First centralization ended feudalism. Then it ended the cycle of European wars that had been going on ever since Rome fell. Now the growing international economic institutions have made it all but impossible for the Great Powers to fight wars with each other, while political ones are busy closing the ozone hole and trying to deal with global warming. If this continues we'll have peace, prosperity and clean air! Oh the humanity!

Humanity has been building larger and more complex societies ever since the dawn of history. It's not a "rolling disaster", it's what lets me sit in front of my computer in a lazy Sunday morning, sipping coffee and writing this message, rather than trying to eat my maggots quietly so I'll hear when the neighbouring tribe comes to kill me for them. As far as I'm concerned, we need more, not less, centralization, since it enables life to be more than just a constant struggle for survival.

Among other ills, they create massive economic distortions (see the current college education bubble)

Education is an ill now? Perhaps you're referring to the college debt crisis caused by college education in the US being handled by for-profit private institutions rather than the state?

Re:From what I can tell

[AthanasiusKircher]

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!

Just wanted to note, since you mentioned the fall of the Roman Republic, that this sort of thing is precisely the flaw that arguably brought down the Roman Republic. The "root password" to any political system's governing structure is always appeasement of the masses. Montesquieu skips over the early elements of this story in Rome, but one of the harbingers of doom for the Roman Republic happened with the Gracchi brothers, who were some of the earliest Romans to seek radical populist reform. Concern about the rural poor and the plight of military veterans led to their attempts to circumvent many of the traditional Roman principles... including ignoring previous checks on power and re-election in their offices (Tribune of the Plebs). The Roman senators had the good sense to club Tiberius Gracchus to death.

The parallels to the Great Depression, Dust Bowl (affecting rural poor), marches of WWI veterans on Washington, and FDR's shocking election to 4 consecutive terms are just too numerous to go into a detailed comparison. After FDR's "New Deal" was repeatedly thrown out by the Supreme Court as being unconstitutional, finally the switch in time that saved nine overrode federalist principles in the Constitution that had functioned since 1789.

Now, of course the U.S. has gone on a different course than Rome did (with the upheavals under Sulla, Marius, etc.). But it's a little scary to me that the Roman Republic essentially lasted only 84 years after Tiberius Gracchus set it on the path toward ruin in 133 BC. Caesar crossed the Rubicon in 49 BC, and was effectively declared dictator for life (after a series of consecutively consulships), effectively moving the Republic into an imperialist empire.

I'll just note that FDR was elected in 1932 with populist rhetoric to overturn the old Constitutional constraints on government power. It's now 2016, 84 years later, and we have the threat of a Trump presidency, a guy who seems to view his position in the world as dictatorial to say the least.

I'm not some crazy numerologist -- just noting that the timeline between when the Constitutional breakdown started to occur and where we are now is a shocking coincidence. It's sad that the generation around the 1930s was when Latin study and Roman study of the classics really started to be expunged from school curricula. For the past several decades we've been starting out on a track toward dissolution of a Republic and toward an Empire -- something the Founders, who were very aware of Roman precedent when they designed the government, hoped to prevent. But few people know about such history anymore, so they don't see the danger.

For all you guys who like to make fun of liberal arts majors... here's why history is important to know something about: to avoid making the same mistakes others have in the past.

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: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.