Brexit: Here's how leaving the EU could shake up the tech industry

Experts weigh in on what Brexit means for the industry and UK businesses in general
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The UK has voted to leave the EU, but what does this mean for the IT and tech industry?

This morning, a number of experts have weighed in on what Brexit means for the industry and UK businesses in general.

UK BUSINESSES

Following the results Phil Foster, MD of Love Energy Savings has shared his views on what this decision will mean to business owners and ways they can ensure to keep business costs down.

“One of the biggest expenditures for small businesses will be their energy, and the UK public have been warned recently that leaving the EU could have negative consequences on our bills.

With the possibility of rising energy prices, small business owners should look to cut back wherever they can. This can include introducing some energy efficiency policies for your office, whether that’s greener LED lightbulbs, installing bigger windows for more natural light or adding movement detectors to turn off your lights automatically. There are so many small changes to be made, and they all add up to save a great deal of money for SMEs.

“For small businesses who are looking to grow outside of the UK, airfares will be crucial. But if prices spike following the exit from the EU, entrepreneurs who may already be keeping a close eye on their bank balance may struggle to afford the journeys to the mainland.

“But thanks to modern technology, travelling hundreds of miles isn’t the only way to conduct a successful business meeting. There are dozens of different programs available to hold voice and video conference calls - all you need is a strong internet connection. My advice would be to consider investing in some decent computers, internet and software packages to ensure you keep communication with your clients, partners and customers a top priority.

In terms of recruitment/employment policies, Foster warns that the UK is still in the midst of a skills shortage, and EU migrants have provided many of the vital skills that we were lacking.

“There is a chance that the UK will no longer be the talent magnet it used to be, resulting in more bureaucracy and a reduced candidate pool for SMEs to dive into,” he said.

“However, the alternative view is that the Brexit will actually improve recruitment options for UK businesses. There is a very real possibility that the UK may now introduce a points-based system, such as that used in Australia, which could result in us welcoming in higher quality candidates.”

Here’s a personal comment on Brexit from someone working within the UK’s tech industry.

Matt Hunt, CEO of UK app developer Apadmi Enterprise, said: “The UK and EU are markets that have continued to offer tech businesses huge growth potential and the international business community has been overwhelmingly supportive of our industry. Technology does not observe boundaries and we have been lucky to enjoy an inspiring array of tech from the UK, Europe and even further afield, which we have been able to access and use for the benefit of our customers.

“The UK tech industry has been in a strong position and the only limitations we’ve faced to do business has been our own ability. With the impending Brexit, there is now a high level of risk and uncertainty over our future and questions are being asked as to how will we be able to build on our success and further grow without the support of the EU.”

Publication Computing has reported that shares in UK technology firms have plummeted thanks to the UK's decision to leave the European Union.

"This morning, the FTSE 100 fell by more than eight per cent, wiping £120bn off of the value of the UK's top 100 companies, but this has since steadied to a drop of 4.5 per cent, which is still significant (about £70bn)," revealed Computing.

"BT has seen a drop of 9.73 per cent, Vodafone has seen a dip of 3.35 per cent and TalkTalk has seen its share price dive by more than 12 per cent. Meanwhile outsourcing firm Capita, which bought Trustmarque last week for £57m, has seen a drop of 11.65 per cent, and Softcat has seen a huge 13.65 per cent drop. Accounting software firm Sage has seen a 3.11 per cent decrease, and Micro Focus has seen a drop of 7.70 per cent."

IMPACT ON SECURITY

Another theme that we’ve heard a lot about this morning is the impact Brexit will have on business and consumer security.

For businesses handling torrents of data, from social media, email and storage apps, this decision presents them with a headache about where their data will now reside, believes Blue Coat.

“British employees said they trust the EU most when it comes to where their data resides, even more than the UK. This leaves a confusing data challenge for businesses who now find themselves outside of the EU. Luckily technology, the very thing which caused this ‘data sovereignty’ issue, can help resolve this conundrum,” said the firm.

Following the result of the EU referendum, Tim Philips, managing director of Kroll Ontrack, commented: “Although the results of the referendum are clear, the full impact of Brexit on data transfers in litigation and investigations is dependent on whether or not Britain becomes part of the European Economic Area (EEA) or the European Free Trade Association.

“If the UK becomes part of the EEA and the EU finds the UK’s data protection safeguards to be appropriate this would make transferring data outside of the UK easier. However, it is likely that businesses will still have to comply with the new requirements to be implemented under the forthcoming General Data Protection Regulation, when transferring data across borders to comply with legal obligations in other countries. Both legal mechanisms and technology solutions are relied upon in these situations to safeguard the personal data of European citizens. 

“If Britain does not become part of the EEA, the situation is more complicated and it is likely that an arrangement similar to the EU-US Privacy Shield would need to be agreed. This will provide a safe passage for the transfer of data between the UK and other countries in Europe.”

Threat intelligence leader AlienVault believes that the UK will be more vulnerable to cyber attacks by leaving the EU.

Over a third of those who work in the IT security industry (38 per cent) fear that leaving the EU will make the UK more vulnerable to cyber attacks because they will no longer benefit from intelligence sharing with other EU states, according to new research conducted by Unified Security Management and crowd-sourced threat intelligence leader, AlienVault.

“Rather than offering an escape from the EU’s red tape, most people believe that they will still have to negotiate their way through complex legislation such as GDPR when Britain leaves the EU. But what’s more, a significant proportion of those surveyed believe that being part of the EU actually benefits them and their work. This is especially true of the industry’s attitudes towards intelligence sharing between EU states,” said Javvad Malik, security advocate at AlienVault.

“Cyber attackers pay no attention to geographical boundaries, transcending borders and jurisdictions to maximize malicious effect. The truth is that we can provide a stronger and more robust defense against emerging threats by working together and sharing information.”

THE VIDEO GAMES INDUSTRY

TIGA, a network for video games developers and digital publishers, has outlined the key issues facing the video games industry following the EU referendum news.

“The UK video games industry is a high technology sector that provides high skilled employment for over 30,000 people, including approximately 11,000 development staff and which contributes £1.1 billion to UK GDP. It is also export oriented, with at least 95 per cent of studios exporting. Following the referendum in favour of ‘Brexit’, it will be more vital than ever to strengthen (and avoid harming) those sectors where the UK has a comparative competitive advantage: for example, aerospace, defence, high-value manufacturing and engineering, high technology industries, higher education, low carbon technology and the creative industries, including the video games sector,” said Dr Richard Wilson, TIGA CEO.

“For the video games industry, it is particularly important that policy makers ensure games companies have access to sufficient finance, benefit from Video Games Tax Relief and R&D Tax Relief, have clear and stable IP rights and can access highly skilled people from outside of the UK. Any new points based migration system must not be onerous or complicated, otherwise the industry’s growth could be held back.”

Jason Kingsley OBE, TIGA Chairman and CEO and Creative Director at Rebellion, added: “The UK video games development sector is an export focused industry that sells content all over the globe. We have a highly skilled workforce, a creative and growing studio population and a heritage of thirty years of success. While uncertainty is unwelcome for business, the UK video games industry will remain strong, resilient and competitive.”

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