Back to Brexit – What Will The Impacts Be On The UK Tech Industry

Everyone has been focused on the impacts of the pandemic, which have of course been sudden and wide ranging, but it is worth looking forward and planning for the other looming event that will no doubt have a considerable effect on business in the UK – Brexit.

While there has been a lot of speculation and talk from companies about what the implications might be, there is a very important aspect currently that could have very big implications for the UK tech industry. 

We are referring to the issue of state aid. With the current EU regulations, there are a number of restrictions on how aid can be given to specific industries designed to restrict state funding to companies in a way that could distort trade and competition with other EU based companies.

It is well known that both Boris Johnson and top advisor Dominic Cummings are very keen to boost the UK tech and science industries post Brexit and create the UK’s very own silicon valley and it is clear that companies such as Apple believe there is great potential post Brexit with the redevelopment in Battersea brought on by their commitments and acquisitions.

Up to this moment, the use of funding has typically been focused at the very early stages of research and development in universities, but the current potential sale of ARM, the AI company DeepMind being bought by Google, and our dependence on the Chinese firm Huawei’s 5G technology has really highlighted the need for investment further down line to ensure UK companies have the opportunity to develop and expand in their own right. 

The UK has more start-ups than anywhere else in Europe, and successful ones at that – at the end of 2019 the UK had 77 start-ups valued over $1 billion which is twice as many as Europe’s next most successful, Germany.

Although UK start-ups are hardly underfunded with over $13 billion venture capital secured last year, it is obvious that the pressures from tech giants and banks beyond our borders to acquire both the IP and Talent have hindered the growth of a mature tech hub here on our own shores. 

The question is, will the addition of state aid make a difference in building a more mature tech hub and aid the development in more home-grown companies like ARM?

While state aid and incentives themselves will definitely assist the development of the UK tech industry, the more important aspect will be its potential to boost confidence in the future and longevity of the UK tech market, and the additional private investment that may result even before any aid schemes are set up. 

If we can inspire investors and companies to have a longer-term vision on the value of UK companies, continue to innovate, and expand our reach into growing market sectors such as FinTech, Ed-Tech, AR, advanced AI, and quantum computing – with the previous investment in grass roots R&D – the UK has exceptional potential to be giant in the global tech markets. 
 

What are your thoughts? Let us know what your views are on state and how you would like to see government support utilised to nurture and develop the UK tech industry. Do you think the current discussions and plans for state aid will help or are there better and more efficient ways to help the tech industry?

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