Brexit: Should the UK IT industry stay or leave?

Immigration, skills and the economy tackled by technology luminaries

With less than a month to go until the all-important Brexit vote, politicians and the mass media have largely succeeded in turning the entire matter into an overblown, over-dramatic and self-indulgent soap opera.

It's now reaching the point where many people are just utterly confused as to what choosing ‘In' or ‘Out' would fix or damage - a giant Ker-Plunk tower of promises, threats, myths and spin.

To try to gain some clarity Computing asked a number of IT industry leaders: Is it best for the IT industry if we stay or go?

Kate Craig-Wood is founder and MD of cloud hosting firm Memset, and offered a number of reasons for staying in the EU.

"In essence, not only would Brexit starve us of much-needed talent (immigration), it could deter big tech companies looking to enter Europe using us as a stepping stone and also would likely de-frock London as the centre of Europe's digital economy, further depriving us of much-needed funding/investment," she said.

"We have an outstanding tradition in the UK of being good at high-tech startups. Nearly half of the world's $1bn+ tech firms began in the UK. London would undoubtedly lose its position not only as Europe's digital heart, but also the world's most important financial centre under Brexit. Both would be severe blows to British technology firms and professionals."

Craig-Wood argued that, while UK tech startups have "long envied" Silicon Valley and its ability to quickly turn fledgling ventures into dynamic young enterprises, it's actually the unified nature of the vast US market that allows this to happen.

"Foundations have been laid to make that happen in Europe, but Brexit would mean stepping back from that huge opportunity," she said.

Craig-Wood also believes most pro-Brexit talk of regulations around starting and maintaining businesses is "daft".

"As a small business owner who has started her own company from scratch with her own hands, by far the most onerous pieces of regulation have actually originated here in the UK, not Europe," she told Computing.

"But don't take my word for it, if you look at the OECD research, Britain remains one of the most lightly regulated major economies in the world.

"Also, unified regulation is again a step towards a unified market that we - the mighty British technology industry - are by far the best placed to exploit."

In firm opposition to Craig-Wood is Peter Chadha, IT consultant and founder of Dr Pete's Technology Experts. He's also hot on immigration and regulation, and is convinced a Brexit will bring improvements in both these areas.

"The thing is, technology is a sector that's international, and some of the best technical people come from outside of the EU," Chadha said.

Brexit: Should the UK IT industry stay or leave?

Immigration, skills and the economy tackled by technology luminaries

"If you look at places like Russia and the Ukraine, as well as India, the US and Canada, these are some of the places you can get superb, innovative and smart programmers from," he continued.

Chadha doesn't believe the official figures for net immigration to the UK from the EU, and thinks "it's a lot higher than that", but his main concern is how the rules are "toughened up" for the rest of the world when UK-based companies try to recruit skills from outside the EU.

"If we had a meritocratic system - like Australia - we could get those skills from wherever they are," he said.

Chadha is critical of "how few hubs" exist in Europe offering high-grade technology skills.

"There's Germany, and bits of Spain. Romania and Bulgaria you occasionally hear about, but you don't have that much technology in Europe compared to the rest of the world, so the quality is a lot less," he said.

"I'm not saying you don't get good people in Europe, I'm saying you're cutting down the opportunity for a certain set," Chadha added.

Chadha said he is interested in immigration that "adds value".

"So why do we have to only have them from the EU? There are many, many hurdles before we can even think about getting people from outside the EU," he said.

Ross Mason, founder of integration firm MuleSoft, believes there are valid points on both sides. He agreed with Craig-Wood about the danger of the UK losing easy access to the single market.

"The only way Great Britain can be great in this new digital era is to ensure that British companies can easily deliver digital products and services beyond the physical shores of its island," he said.

The scenario of the UK struggling to sign trade agreements in a post-Brexit world is the crux of the argument for many in the "remain" camp, and Mason believes "digital borders" could be equally as important, and that the UK would find itself cut off from some of its most important trading partners.

"The European Single Digital Market Initiative is being put in place to allow the free movement of data and digital services between member states. This means the digital cost of doing business would go up [if the UK left], requiring IT vendors to support a wider range of preferred payment methods, as well as manage additional layers of compliance and other costs that may differ between the UK and the rest of EU," Mason said.

But Tim Critchley, CEO of secure voice comms firm Semafone, disagreed.

"If Britain were to leave the EU, IT companies could at least take comfort in the fact that when it comes to selling software, and in particular cloud-based solutions, physical borders don't often disrupt the distribution of products. Thanks to this, selling technology to different markets across the world doesn't generally rely on big, unilateral trade discussions," he said.

He also disputed Chadha's description of skills deficit in Europe.

Brexit: Should the UK IT industry stay or leave?

Immigration, skills and the economy tackled by technology luminaries

"These days our IT networks and infrastructure rely far more heavily on Eastern European tech experts. Countries like Slovakia, Hungry and Poland offer a great pool of resources. In fact, about 15 per cent of Semafone's UK workforce is sourced from these countries," he said.

"No longer having access to this stream of talent would be a huge hurdle for companies to overcome, particularly those that are in the process of expanding operations.

"[Brexit] will put more pressure on industries and the government to innovate in order to compete," he said.

"It could shake up the status quo and drive new strategic thinking to leverage UK resources as a hub to help develop emerging markets, such as Africa. The UK tech scene hasn't seen many new and exciting developments in a long time - recently there hasn't been any defining technology that the UK is known for."

Mason believes "a bit of fire from underneath" due to increased competition could see the UK "pick up the pace".

Going back to his point on trade, Mason also wondered whether Brexit would encourage "UK economy builders" to "recognise the urgent need" for the country to boost digital trade.

"UK banking, for example, can transform itself into global banking platforms where they are part of many value chains instead of trying to own the whole customer experience in one bundle."

Chadha believes the UK has a number advantages over the wider EU when it comes to supporting digital business.

"There's a reason why [tech entrepreneurs] come to the UK, and it's because we have a reasonably-sized economy of our own, and we speak English," he said.

"You could argue that in Ireland people speak English too, but there isn't enough of a customer base to establish yourself there. If you're a large corporate, you could just set up in Ireland [fairly easily], but mid-sized firms would still look at the UK."

Chadha believes "English law", which he believes a Brexit could only strengthen, is another attraction.

"Try and set up a company in France and see how many weeks it takes," he said.

"People give me these nonsense arguments that there are lots of reasons people set up businesses there, but because of Napoleonic law, setting up a business of over 50 people in France is extremely complicated."

Overall, Chadha is adamant that a Brexit would cause few waves for the UK's IT sector.

"People will say 'Oh my god', then 'Oh well, business as usual'."

Are you now more confused than ever? Should the UK IT industry go or stay? Join the debate by leaving a comment below.