Starting from the days of the dot com boom, the UK has worked to build a steadfast reputation as an international hub of digital innovation and has now rightly become a magnet for international investment.
The UK start-up scene stands proudly as the envy of the rest of Europe, with the number of start-ups founded in the UK across all sectors outstripping more established corporations for growth.
As of the beginning of 2015, 17 Tech Unicorns (businesses with a value of over $1bn) were based in the UK, with 13 headquartered in London. For context, the UK’s collection of unicorns accounts for almost half of the European total.
But a vote for Brexit on the 23rd June would undo this hard-earned success and significantly diminish the UK’s leading status. In what is an undoubtedly complex decision that the public faces, further complicated by the struggle to distinguish truth from fallacy in arguments from either side, it’s best to focus on the issue that’s possibly most relevant for the start-up industry – talent.
Good people are not so hard to find… for now
Tech talent is what drives the start-up sector. At present, nearly 16m UK citizens are employed by the digital economy, with new jobs created at almost three times the rate of the rest of the economy.
The UK has a prosperous tech start-up culture, which has developed over the years to become a significant contributor in the job market.
And something that’s valued above all else is the ability to scale, adapt and ultimately continue to grow. The digital economy develops at a rapid pace, with the next big innovation forever just around the corner. Ultimately, it’s more pronounced than in any other industry – if you stay still, you’re falling behind.
It must be said that this success is fuelled by many factors, but access to the best talent from across Europe arguably stands out as the most significant.
Despite the tremendous success in the sector, there’s a shortage of tech talent actually sourced from within the UK. This skill gap is filled by an immigrant workforce largely made up of EU citizens.
To be more precise, it’s estimated that 75,000 EU citizens are employed by the UK tech industry. Furthermore, over 20% of directors at nascent UK tech companies are foreign nationals, with most coming from other EU states.
In other words, the sector needs this migration of labour to fill key roles, and grow as a result. A restriction on movement within the EU would put this access in jeopardy, reducing the talent pool that companies can choose from, and also surrendering so much of the appeal that the UK holds for said talent pool in one short-sighted swoop.
You don’t know what you’ve got ‘til it’s gone
Not only is EU membership responsible for the multiculturalism that the UK is famed for, it also brings fresh talent and outlooks which help power and shape an industry that currently brings huge wealth to the UK.
During the referendum for Scottish Independence in 2014, the then First Minister Alex Salmond stressed that, in the case of a ‘Yes’ vote, the would-be independent Scotland would take in a record number of skilled immigrants, ridiculing stringent policies taking shape across the rest of the UK.
He saw the value of the skills that they brought in, and bemoaned the number of people that traditionally smaller countries lose each year to thriving hubs such as London.
And that’s the vital point that the Leave campaign are sorely missing. Whilst other cities and nations lament the brain drain of many of their best and brightest, the UK has the status and strength of economy to benefit.
The UK already suffers from a shortage of digital talent, and a skilled labour migration of the scale that’s likely to be brought on by a Brexit is the biggest single concern for the UK tech scene.
EU membership brings with it the huge opportunity to hire world-class talent, which is vital for the UK’s extremely multicultural tech scene. By leaving the EU, we could no longer expect to attract talented people from overseas to our shores that the tech start-up sector needs to thrive.
Compounding this problem, once the talent leaves for greener pastures, the investment will soon follow. As it stands, there’s more investment in UK start-ups than any other European country, allowing innovation to flourish. Yet, this would promptly dry up in the case of a Brexit result.
While Leave campaigners idealise the deals in place between the EU and outsiders like Norway and Switzerland, the likelihood of attaining a similar understanding is slim. Even if an equivalent agreement could be reached, it would undoubtedly be the result of a drawn out negotiation, during which uncertainty would be rife. And if there’s one thing that kills investment, it’s uncertainty. This kind of slowdown would indisputably deflate the start-up sector to a point from which it may never fully recover.
This is especially true with rapid tech innovators, such as Berlin and Paris, already pressing their claim to be the next major digital incubator cities for European start-ups.
Stay or Leave? It’s almost decision time
As the landmark day draws ever closer, arguments continue to be made by either side, with much of the information best described as in ephemeral condition, regarding accuracy or reliability.
However, one thing is certain regarding start-ups – talent, skills and passion are the lifeblood of this great industry. And limiting our access to the large proportion of people who fulfil this need would have seismic impact.
The UK start-up scene is prosperous, vibrant and responsible for a huge part of the modern economy. But more than that, it’s an asset and symbol of British pride. And any step that directly threatens or sabotages this is an intrinsically backward one. It’s for this reason that I will be voting to remain on the 23rd June.
