It can be hard to tell exactly how Brexit Britain is faring during this time of uncertainty – reports highlight that either things aren’t as bad they seem or big fallouts are just on the horizon. In this week’s Brexit Tracker, major tech firms show they still have an eye on Britain, surveys show the tech sector faces some major losses and FinTech may be looking to jump the U.K. ship.
Tech Giants Boost Headcount
Some major tech firms have recently shown that they aren’t afraid to make an investment in the U.K. sides of their business.
Recently, Amazon announced plans to increase its workforce in the U.K. by 5,000 people upon its move to new offices in London. According to TechCrunch, 500 of those jobs will be focused specifically on research and development within the company’s Edinburgh, Cambridge and London research centers.
“We are hiring for all types of roles from flight test engineers, software engineers and corporate managers in our development centers and head office, to operations managers, supervisors, engineers, service technicians, HR roles and order fulfilment roles in our fulfilment centers,” Doug Gurr, U.K. country manager at Amazon, said in a press release.
Last year, the eCommerce giant added 3,500 new jobs in the U.K. and also opened up its first U.K. Amazon Web Services centers in London.
The announcement could be the first of many other tech darlings showing they are undeterred by the looming uncertainty of Brexit.
Last year, Google said it planned to bring on an additional 3,000 employees at its London office in the coming years, and Facebook noted it would hire 500 more staff members in the U.K. this year, increasing its Britain-based workforce by 50 percent.
Even Apple announced its intention to establish a new U.K. headquarters at the restored Battersea Power Station.
Surveys Say No
While the headlines of more companies increasing their U.K.-based workforces is seemingly good news, it doesn’t overshadow the results of new surveys from the Coalition for a Digital Economy (Coadec) policy group, which revealed the U.K.’s tech sector has some big issues just below the surface.
According to the reports, Britain’s tech sector faces three major impacts if the government doesn’t take actions — a significant drop in STEM skills due to low funding, visa restrictions blocking highly skilled workers from overseas and the uncertainty of how severely Brexit will impact the country’s highly international tech workforce.
“The U.K. is faced with a unique opportunity to become a world-leading tech hub, and it’s crucial the government does everything possible to increase the flow of talent to one of the U.K.’s fastest growing sectors. That means increasing the proportion of 16-to-19-year-olds studying mathematics and STEM subjects to a high level and a funding boost for software development training,” Alex Depledge MBE, chair of Coadec, explained.
The policy group, which represents tech and digital startups, said the government must reverse cuts to the U.K. budget that reduce the amount of funding from 2016 to 2019 to support fostering STEM skills. U.K. leaders are calling on the government to instead make major steps toward boosting the country’s STEM skills and improve basic numeracy and literacy.
Research shows that Britain will require an additional 2.287 million digitally skilled workers by 2020 to support its growing economy, with software developers remaining the most sought after hires, TechCrunch noted.
Coadec also warned about the risk of stifling a major growth sector of the U.K. economy by restricting the availability of skilled workers from other countries. This underscores the concerns that new curbs to immigration as a result of Brexit may have huge repercussions across the country’s tech sector and its ability to compete globally.
“For the U.K.’s tech sector to thrive, we have to find solutions to the current talent and skills shortages. It’s everything from how we build the capacity in the U.K. through education and how we attract the best from around the world through immigration policies. Post-Brexit, the need is even more pressing,” Taavet Hinrikus, cofounder of TransferWise, noted.
Hello, FinTech Exodus?
FinTechs may be one step closer to running for the hills as a result of Brexit.
The movement of FinTech firms away from what has traditionally been the FinTech capital of London has started to take root, reported The Guardian. Simon Black, who heads FinTech firm PPRO Group, told the news organization that firms in the sector, stretching from eLending to money transfers and beyond, have been looking to reallocate capital and resources outside the U.K.
Black said his own firm was looking at Luxembourg.
One of the major the issues at play in the sector is “passporting,” a system wherein U.K. firms can trade and do business on the continent, with that status usually granted to members within the EU. Though negotiations have been ongoing over Brexit, Black said that planning must take into account the possible end of passporting, with the necessity of seeking business licenses in other countries, and that process can take 6 to 18 months.
“I don’t know of a licensed FinTech company in the U.K. that isn’t looking at options,” Black said. “Everyone is thinking about it, and anyone that is any size, that is employing more than 10 people, is active. The exodus is beginning. It will be more visible in 2018.”
Other areas that Black said PPRO has examined run the gamut from Belgium to the Netherlands. Hiring and other activities have meant that the firm has had to spend more than £1 million just on startup costs, money that could have been kept within the U.K.
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