A new study warns that the UKs leading position as the tech start-up hub of Europe is under threat.
Research by venture capital firm Balderton shows that Brexit may negatively impact the UK's ability to attract foreign employees, due to the drop in the value of the pound, meaning that salaries are less competitive, as well as the proposed restrictions on freedom of movement of people.
Whilst the UK currently employs almost a third of all tech start-up employees in Europe, the tech sector is the one most reliant on foreign workers. The report by Balderton claims that "the attractiveness of the UK to this highly mobile workforce could decline rapidly and that the high costs of hiring staff who need visas could become a significant issue, should policies towards skilled workers change significantly post-Brexit".
According to James Wise, partner at Balderton, once Brexit occurs recruiting from the European mainland could prove time consuming as candidates will need to apply for a Tier 2 visa which can time up to 16 weeks to be issued. "Tech companies hire very quickly and grow quickly," said Mr Wise. "Hiring in a couple of weeks is the norm, so having to go through visa system that would take 16 weeks would severely diminish our ability to be competitive."
He added: "London, together with Paris and Berlin, dominate the tech scene in terms of employees and investment today. London in particular has benefited significantly from migration, with over 40pc of the tech companies founded last year having at least one non-native founder.
"But the relative weakness of the pound since the referendum vote, together with developer’s willingness to be mobile and work in smaller tech hubs, could reduce the relative advantage the capital enjoys without proper policy support post-Brexit."
Beavis Morgan – specialist advisers to the tech sector
Whilst we don’t yet know if we are headed for a hard Brexit or a soft Brexit, we do believe that London will continue to shine as one of the world’s leading technology hubs.
Being centrally located within walking distance of “silicon roundabout”, our business experts at Beavis Morgan specialise in working with entrepreneurial people in the tech sector, helping them set up and run their own businesses and guiding them through each stage of the process, whilst navigating the challenges and advising them in making the right decisions both now and for the future.
Whether you are a local or international investor, we are also able to identify and review potential business targets on your behalf, as well as undertake due diligence, deal structuring, advise on efficient tax planning, and provide a comprehensive range of professional services to help you make the most of your investment.
To find out more about how we can assist, contact Steve Govey or your usual Beavis Morgan Partner.