The people of Britain have spoken, and by a miniscule margin, voted to leave the European Union. We all know what this could mean for the economy, immigration, jobs, fishing and even VISA-free travel, but what does Brexit mean for technology?
Tech is big business for the United Kingdom. The UK’s IT industry is worth £58 billion to the economy annually. London-based tech firms alone raised £1.09 billion in venture capital last year. There are 42.4 million smartphone users in the UK, and that’s steadily rising. We’re the world’s fifth biggest economy, and technology and science make up a big part of that.
Leaving the EU will have consequences for every sector, and technology is no exception. No one can say for certain what will happen when (presumably) leave, however Norway – who chose not to enter the EU in 1994 and was often cited as an example by pro-Brexit campaigners – delivered a warning that being alone is not all fun and games.
Of course the politicians can be wrong, the experts can be wrong, and the business leaders can be wrong – this is new territory. They can also be right, and some of the world's most influential technologists have been quite vocal about the EU referendum.
What are big tech companies saying?
There’s no shortage of corporate bigwigs wading in on the EU debate, and that’s a good thing. When it comes to Brexit, it’s important to get a view of what our country’s biggest technology business leaders believe will happen. It’s their livelihoods on the line, after all.
It’s no surprise that the Remain camp has garnered the lion’s share of support from big business. The majority of UK exports to the EU, across both services and manufacturing, can largely (though not exclusively) be sourced to the major corporations.
Some of the key tech players throwing their lot in with Remain include: Bill Gates (Founder of Microsoft), Richard Branson (Founder of Virgin), Stephen Hawking (Award-winning physicist), Stephen Fry (Actor and technology columnist), Dr Ian Robertson (Board member at BMW, Gavin Patterson (CEO of BT), Martha Lane Fox (Founder of Lastminute.com), Dido Harding (CEO of TalkTalk), Ronan Dunne (CEO of Telefonica O2 UK), David Stokes (CEO of IBM), and Tim Berners-Lee (inventor of the World Wide Web).
Here’s Richard Branson talking about his fears for Brexit:
Bill Gates said that a post-Brexit Britain would be a “significantly less attractive place to do business and invest”. He added:
“While ultimately a matter for the British people to decide, it is clear to me that if Britain chooses to be outside of Europe…it will be harder to find and recruit the best talent from across the continent; talent which, in turn, creates jobs for people in the UK.”
And Chris Kenyon, the Senior Vice President at Canonical – the British minds behind the Ubuntu operating system – said:
“Canonical supports the Remain campaign, and believes the UK will fare better, socially and economically, inside the European Union. Employment conditions, safety standards, scientific advancement and economic vibrancy all improve with access to larger pools of talent and customers.”
Microsoft founder Bill Gates supports the Remain campaign
Kenyon added that the UK has a “special deal” with Europe, that is “a better deal than any other country will ever obtain, or that the UK could ever attain again”.
The technology industry’s Leave camp is a little smaller, granted. Nevertheless, important industry leaders have spoken out in favour of a Brexit vote, including: Sir James Dyson (Founder of Dyson), John Caudwell (Founder of Phones4u), Lord Kalms (Former Chairman of Dixons Retail), and even Julian Assange (Creator of Wikileaks).
Here’s Julian Assange talking about why he believes in Brexit:
Speaking to the Daily Telegraph, Sir James Dyson said that the UK would “create more wealth and more jobs by being outside the EU than we will within it”.
“When the Remain campaign tells us no-one will trade with us if we leave the EU, sorry, it’s absolute cobblers. Our trade imbalance with Europe is running at £9 billion a month and rising. If this trend continues, that is £100 billion a year.”
Related: EU Roaming Charges
What are tech start-ups saying?
So we’ve heard from big business, but there’s more to the UK economy that giant corporations. What does the UK’s booming tech start-up sector have to say about the prospect of Brexit?
Well, it seems that the vast majority of start-ups are keen to stay in the EU. A recent study by Coadec found that 81% of people in the digital start-up sector are hoping for a Remain vote. The sample size was 175, including 126 start-up founders, 26 start-up employees, 19 investors, and four others.
The study revealed that the key issues for the Remainers were:
- Access to a large single market, with harmonised regulations
- Free movement of labour, giving access to a talented workforce
- Having a ‘seat at the table’
- Stability and security
The key issues for Leavers, meanwhile, were:
- Over-regulation and red tape
“These results aren’t surprising,” explains Coadec in its survey analysis. “The UK’s start-up community is international in its outlook and in its composition. Founders come to the UK from across Europe (and the world) to launch and grow their businesses. They look to Europe for talented staff to help them grow. And they aim to sell and expand across a trading block of 500 million consumers.”
The Coadec survey isn’t alone in its findings, either. A survey from Tech London Advocates found 87% of start-ups wanted to remain, while research by techUK found that 71% wanted to remain in a reformed EU.
In fact, a Brexit vote could be felt very acutely by many of the UK’s tech start-ups. That’s because of the uncertainty over immigration legislation and the possible loss of free movement of labour.
Robert Newry, who founded technology recruitment service Arctic Shores, believes that the current interest in UK start-ups will “dry up” if we leave the EU:
“We currently have 14 employees, four are European, three of whom are first-generation. We need multi-lingual staff and we can’t find all the expertise we need from within the UK. Brexit would cause us not just hiring issues, but contract and revenue ones too.”
Today, Britain’s EU membership guarantees free movement of people. But if we leave, there’s a chance that the UK could place new restrictions on who can enter and leave the UK. However, if the UK negotiates access to the single market post-Brexit, it’s highly likely we’d have to accept free movement of labour as a caveat anyway.
Alex Hemsley, who co-founded Global M, an international technology recruitment start-up based in London, said that being in the EU makes it much easier to hire people in the tech sector:
“The great thing about being a member of the EU when it comes to hiring is that the search for talent is not constrained by borders or hindered by red tape and therefore startups are free to concentrate on sourcing the best talent quickly and efficiently to support their growth.”
Nick Bolton, who created Rota, an app that connects hospitality companies to rated staff, believes that Brexit could “cripple” a number of tech start-ups in the UK.
“One of the biggest challenges facing tech start-ups is the shortage of good quality developers and many of these highly skilled workers currently come from the EU.
Bolton argues that the only thing worse for fundraising than a declining economy is an uncertain one, and that Brexit is likely to cause both: “Venture capitalists will look at more certain, stable economies and avoid pouring money into London.”
Investment in science research
Technology isn’t just about business, though. The UK is one of the largest recipients of research funding in the EU, which has significant impact on science and tech.
According to the Royal Society, we receive a greater amount of EU research funding than we contribute. Between 2007 and 2013, we received 8.8 billion euros for research, development, and innovation activities. It’s estimated that we contributed around 5.4 billion euros to Europe’s research coffers in return.
Naturally, scientists welcome this cash, which might explain a Nature poll that revealed 83.46% of researchers oppose Brexit, regardless of whether they intend to vote. A further 4.63% are unsure, and 11.91% want to leave the EU. And even amongst researchers that intend to vote, 80% are against leaving the EU.
Professor Stephen Hawking called the prospect of Brexit a “disaster for UK science” in a letter to the Times newspaper, signed by over 150 fellows of the Royal Society. The letter reads:
“First, increased funding has raised greatly the level of European science as a whole and of the UK in particular because we have a competitive edge. Second, we now recruit many of our best researchers from continental Europe, including younger ones who have obtained EU grants and have chosen to move with them here.”
However, Professor Angus Dalgleish, of St George’s Hospital at the University of London, who is campaigning for Brexit, argues:
“We are standing up against what is a very large body of people who feel that if we leave the EU it will be a disaster for funding and collaboration – and we completely refute that. The bottom line is that we put far more into Europe than we get out. Any difference we can more than easily make up with the money we would save.”
However, it’s not actually guaranteed that the government would match the EU’s research spending if we vote for Brexit on Thursday. There’s a real risk that the recouped funds could be used elsewhere, leaving tech research high and dry.
How would Brexit affect technology for the average person?
If you’re not spending your days in a Shoreditch café, churning out ‘game-changer’ apps by the dozen, you have to wonder how the EU’s impact on technology affects the average person.
Well, to answer the age-old question of what has the EU ever done for us, here’s a quick run-down:
Scrapping EU roaming charges
Last year, the European Union announced plans to lower the price cap on roaming charges as of April 30, 2016. Better still, roaming charges across Europe will be scrapped entirely from 2017. That means you can’t be charged extra for using your phone texts, minutes, or data when travelling within the European Union.
That’s an impressive feat, and here’s why. Unlike the USA, Europe’s phone market is hugely complex and fragmented, so getting them to operate on a level playing field is very difficult. It may be fair to say that this simply would never have happened without the existence of the EU.
And you care about this, apparently. Research from Broadband Genie recently revealed that 74% of Brits think it’s important for the government to negotiate a deal to eliminate European roaming charges in the event of a Brexit.
European Union has scrapped roaming charges across EU (Coming 2017)
Rob Hilborn, Head of Strategy at Broadband Genie, said:
“Like much of the EU debate, it’s hard to cut through the political rhetoric and find hard facts, and that’s no different when it comes to roaming. What is clear is that, regardless of the results on June 23, consumers are demanding the abolishment of EU roaming charges.”
Holding corporations to account
The European Commission, the executive arm of the EU, is also an excellent body for holding corporations to account.
The UK, by comparison, has been less successful. Earlier this year, Chancellor George Osborne came under fire after calling the UK’s tax deal with Google a “major success”, despite backlash against the £130 million agreements leniency.
But the EU has no qualms about putting pressure on Google. Earlier this year, the Commission formally charged Google with unlawfully “preventing competition” in the mobile (read: Android) and search (read: Google) markets. There’s still some deliberation to go through, but the result could a fine against Google for 10% of its global turnover. Considering its annual revenue in 2015 was $74.5 billion, that’s no small sum.
Without the EU, it would be much harder for countries to organise collective pressure on multi-national monopolies.
The EU also acts as a buffer against national governments trying to infringe the rights of their citizens. Richard Patterson, the director of security, privacy and comparison website Comparitech, puts it neatly:
“While the in-out debates have focused mostly on immigration, spending and so forth, it’s also important that the public gives consideration to their right to privacy. The UK’s proposed Investigatory Powers bill – or Snooper’s Charter – would make it easier for the government to snoop on its citizens, but so far the EU courts have been holding the bill back as it is at odds with European Law. Without this protection, the public’s privacy could quite literally be at the stake.”
Patterson added that we could end up in a situation where British citizens have “far less protections than their EU counterparts”.
The UK was split nearly 50/50 on Brexit, but the same certainly isn't true of the technology sector. It seems that, on balance, Britain’s tech and science industries would have liked us to stay in Europe, and that makes sense. Much of the UK’s technology industry is based in London, a city that has benefited massively from the European Union. But in small towns far detached from the hi-tech capital, it’s likely that the benefits are less conspicuous.
Nevertheless, almost everyone gains from research in science and technology, and rulings like the abandonment of EU roaming charges are hard to gloss over. Had the referendum only been open to geeks, a Brexit vote just wouldn't have happened. Fact.
It seems that contrary to popular belief, sometimes, computer says yes.
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What’s your view on Brexit? Let us know in the comments.