(First published in E&T Magazine.) Making the best of it seems to be the signal emerging from the London tech community about the Brexit vote. There is talk of turning “adversity into opportunity” and mustering the entrepreneurial spirit that made them successes in the first place. Fintech channels the spirit of Dunkirk. Or maybe the Battle of Britain.
A post Brexit poll of the UK tech community shows that a third of tech firms are planning to put the brakes on new hirings. Three out of four businesses polled think the environment is going to get worse. Many cite worries about the development now of the Single Digital Market now that the UK is leaving and feel threatened by the uncertainties surrounding the ability of EU citizens working in the UK for British tech companies to stay in the UK. Academia, too, is heavily reliant on foreign talent: an astonishing 37% of academic staff in Biology, Mathematics and the Physical Sciences at British institutions are from outside the UK.
But Russ Shaw, the founder and chair of Tech London Advocates, a London tech lobby group, is desperately keen to show that London is still “open for business”. The twitter hash tag is #LondonIsOpen for a campaign that was launched by an open letter to London’s EU nationals to “assure then they were still welcome in a community they helped create”. It was signed by 150 tech leaders and other notables, including London’s mayor, Sadiq Khan.
Shaw argued that a wave of post-Brexit deals had “somewhat calmed the waters”. He gave a couple of examples. The Japanese firm Softbank has announced that it will acquire the chip designer ARM holdings for 24.3 billion dollars. While tech start up Magic Pony was sold to Twitter last month for 150 million pounds. Mastercard recently announced the acquisition of Vocallink which was another victory for London.
Putting on a brave face, Shaw wrote: “This is not the first time we have overcome difficulties, and sometimes uncertainty can lead to the creation of top-class companies. During the financial crash London began building a world-class fintech industry, and with the right circumstances similar companies could now emerge.”
But US private intelligence company Stratfor – which supplies its information at high fees to corporates and governments around the world – concludes that British science and technology may indeed suffer from Brexit. Britain’s academic institutions are both internationally reputable and competitive: but they are carried by EU funding.
Between 2007 and 2013, Britain contributed 5.4 billion euros towards the EU’s research budget but received 8.8 billion euros back. This helped Britain remain a global scientific leader despite spending 1.6% of its GDP on Research and Development, around half the figure spent by the United States and Germany. While Britain may still – as Switzerland is – be eligible for EU science funding, the sums may well be lower than they are today and, as Switzerland found, access is subject to the whims of the EU.
Switzerland was dropped from the EU’s science collaboration programme in 2013 after a local Swiss referendum came out against immigration; and was only recently reassociated with it but with much fewer financial benefits for the Swiss science sector than before, down 40% on a few years ago.
Few in the science and technology community would dissent from the demand that one of Theresa May’s top priorities ought to be compensate for the shortfall in funding caused by Brexit in order to keep Britain competitive. Those domestic R&D spending levels are nothing short of scandalous.