The UK has voted and Brexit is now a reality. While uncertainty over what this means for the technology, media and telecommunications (TMT) sector sets in, we look at the possible implications an EU exit may have on this innovative industry.
Britain has long been seen as a hub for creative excellence and tech innovation. This attracts money from foreign investors, who often see the UK as a gateway to the European market. With so much uncertainty, only time will tell if Brexit will dampen the appeal of investing in the UK. Challenges could emerge, however, if investors perceive that it has become harder for UK businesses to trade with Europe and attract foreign talent.
While the terms of a UK exit from Europe are unclear, it is likely that the UK will be affected by a restriction of free movement amongst skilled workers. Media and tech businesses rely on a pool of young creative talent, many of whom come from the EU. It’s not unusual to find that a large minority of staff in creative businesses are from the EU. There is a risk that Brexit could make it harder for these people to come to Britain and therefore starve the creative industries of much-needed talent.
Following the vote for Brexit, London may also face increased competition from European cities that are keen to replicate what has been achieved here, for example, Tech City in Shoreditch. Pre-Brexit, the UK was still seen as the leading tech hub, America/Palo Alto aside. Post-Brexit, we may well be overtaken by other European cities, such as Berlin, which have a strong tech presence and could be seen as a favourable alternative to avoid complexities around trading with the EU.
What is certain is that businesses in this space are resilient and will adapt to whatever the wider economy, and indeed a potential Brexit impact, has to throw at them.
For any advice on how Brexit may affect your business, please contact David Blacher.