Latest survey shows renewed optimism from Tech leaders 

 

Following June’s Brexit vote, moral in Tech circles was low. 42% of those surveyed feared their business environment would get a lot worse. For a sector that relies heavily on EU talent and investment, the potential damage looked very real indeed. In this climate of shock and uncertainty, the immediate response from many was to hold back where possible on new hires and new developments – you could feel a collective intake of breath.

But something has changed. We’re breathing normally again. Tech City’s latest and largest survey shows a sharp rise in confidence. Almost half of the 2,732 tech businesses polled expect their business environment to get better in 2017, only a small 5% are still bracing themselves for the worst.

Only time will tell, but as Gerard Grech, CEO of Tech City UK rightly states ‘it is encouraging to find the mood becoming increasingly positive’. This survey comes in stark contrast to the pessimistic findings of KPMG back in September, where ¾ of CEOs (across all industries) were seen to be considering moving their operations outside of the UK. The Tech sector has always been a rather special case and for Grech, this new positive mood “reflects the resilience and underlying strength of our digital sector, which continues to grow and create jobs at a far faster rate than the wider economy”.

Let’s not forget some other positive signs, including strong endorsements from US tech giants. Back in September, Apple committed to its £9bn London HQ project at Battersea Power Station. In November, Google announced plans to hire 3000 more people across the UK, Facebook to create 500 new UK jobs in 2017 and IBM to open 4 new UK data centres.

Last week Snapchat followed this positive trend by choosing London for its EU HQ, and notably not, as many other companies do, to set up in Dublin.  High profile tax evasion scandals for Google and Facebook, and the limited future use of those Double Irish arrangements (these ensured companies paid very low taxes) from 2015 (for new companies) and 2020 (for companies already set up) might also play a part in removing incentives to move elsewhere. If Phillip Hammond is to be taken on his word (who knows), it’s the UK that might become the next corporate tax haven…and whatever you think of that strategy on a political level, big corporate investment would likely follow.

Not that the UK is losing out on that front as it is. According to data from London & Partners, private equity and venture capital firms invested more than £6.7 billion in British tech firms in 2016, up from £5.6 billion in 2015, and blowing rivals out of the water, with the Netherlands its closest rival on £1.3 billion. The UK received £1.5 billion + in the post-Brexit half of the year alone. This research also shows London’s strengths in cutting edge technologies, such as Big Data, Cybersecurity, eCommerce and Adtech, with firms in these areas attracting increasing amounts of investment in 2016, even after Brexit.  A relatively new area, Artificial intelligence also benefited from a sharp rise in VC investment in 2016, with London based AI companies receiving a record £100 million last year.

Around a third of its workforce is estimated to be made up of EU nationals and without access to skills from Europe, future growth prospects could be undermined significantly.

The one persistent cause of concern for Tech companies still centres on the uncertainty surrounding the continued flow of European talent to and from the UK. For future growth it is imperative the UK maintain its strong talent pool, which is at present one third EU nationals. Niklas Zennstrom, creator of innovative messaging service, Skype, takes a strong stance on this “London is (still) the best place in Europe to launch a global tech company…What the UK government needs to make sure is that technology companies still have access to the best talent in the world. If (that happens) without a lot of red tape, we are going to be fine.

It seems then that so long as the UK can protect its talent base, the overwhelming optimism of the Tech CEOs in TechCity’s survey will be proved right.

 

If you’re looking to hire the best marketing talent from within the Technology sector, talk to a specialist. Contact Melvin Day on mday@marketingmoves.com

0 0 votes
Article Rating
Subscribe
Notify of
guest

0 Comments
Inline Feedbacks
View all comments
Scroll to Top