Could the UK become the next Silicon Valley?

Posted: 1 June 2016
Author: Mark Hurren

With the EU membership referendum drawing ever closer – and polling data suggesting the vote could still swing either way – many tech startups, as well as more established IT companies, are understandably giving consideration to how the UK’s tech talent pool might be affected by a Brexit vote.

Freedom of Movement

It’s fair to say the UK’s burgeoning FinTech industry currently benefits from EU-wide labour mobility policies. The skills gap between the recruiting requirements of established FinTech firms in London (and other growing tech hubs like Manchester, Leeds and Edinburgh) and the tech talent available in the UK is currently being plugged largely by workers from elsewhere in the EU – particularly Eastern European nations, which have an especially good reputation for science and tech graduates.

Campaigners in the “Remain” camp have warned that British industry as a whole – and the technology sector in particular – will suffer should EU migrant workers be lost in the event of the UK exiting from Europe. The argument being that tougher and more expensive visa requirements would make EU workers more likely to seek jobs in other tech hubs within the European Union, such as Berlin or Stockholm.

But would the UK’s technical IT sector really be worse off if we choose to split from Europe?

With change comes opportunity

It’s true that if European workers are denied easy access to the UK jobs market they may be less likely to seek work here. At the same time, if we’re freed from our commitments to current EU labour movement agreements – which many believe are unfairly weighted against workers from outside the EU – the UK would be in a better position to negotiate and revise our own visa and immigration rules, which parliamentary policymakers could utilise to bolster key segments of British industry, including FinTech.

Under our existing visa policies, many information technology candidates from outside the EU find it difficult to get Tier 1 or Tier 2 work visas, so it’s reasonable to speculate on the level of tech talent that UK firms are missing out on as a result.

FinTech booms in Hong Kong, Singapore, Tokyo and Seoul are benefiting from highly qualified technology professionals from Asian nations, such as Malaysia, the Republic of Korea and Sri Lanka. Is there any reason why the UK’s world-leading FinTech sector shouldn’t be able to tap into that same talent pool? The UK technology market is arguably less saturated so competition for jobs isn’t quite so high, but the earning potential is very good – surely this would make the UK a more enticing prospect?

Immigration points-based system

The UK’s current visa system for non-EU migrant workers is already based on a points-based system, similar but not identical to the Australian model. A post-Brexit review of our immigration policy needn’t necessarily require a drastic and fundamental overhaul; it could instead take the form of a revision to how points are allocated for key attributes such as qualifications and experience.

The current system also allows for additional points to be awarded for workers entering jobs on the government-approved “national shortage occupation list”. This scheme – or something similar – could be utilised in a post-Brexit context to support and even grow particular industries and segments of the UK economy.

If Britain does choose to leave the EU it will undoubtedly have an effect on our growing FinTech sector, and the IT industry in general, but that impact may not necessarily be negative. There will almost certainly be disruption in the market, and salary levels may well shift with the changing workforce; however, Brexit could be the catalyst to policy changes that will allow specialist tech firms (both large and small) to attract the best talent from inside and outside the EU. This would cement the UK’s position as a global FinTech leader and might even pave the way for us to become the next Silicon Valley.

As always, we’d love to get your opinions on how a Brexit might affect the FinTech sector, and the technical IT industry in general, so please drop us a line. We look forward to hearing from you!

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