Post Brexit – Tech Blues or Blue Sky?
Firstly, Great Britain is singled out as the capital for tech across the whole of Europe. Evidence for this comes from digital tech investment surpassing £6.8bn from venture capital and private venture sources. France comes in next at £2.4bn, then Germany at £1.5bn.
Secondly, the UK appears to be a nation that knows how to draw resources together. Tech Nation reckons that collaboration is far higher in the UK than other European countries, with over 22,000 tech meet up events on London – again more than Berlin, Paris and Amsterdam (the next 3) put together.
Thirdly, the report recognises that talent plays just as much a part as finance. The key role of universities in supplying a continuous stream of talent is well proven – hence the location of the UK’s leading ecosystems being around Cambridge, London, Edinburgh, Oxford, Bristol etc. Of the top 30 universities across Europe, 8 are in the UK.
And all this potential is translating into activity, jobs and growth. The total tech sector in the UK is worth more than £130bn and consistently growing at 4 times faster than the wider economy whilst tech jobs continue to grow twice as fast and contribute twice as much to GVA as non tech jobs.
Finally, most of this is happening outside of London. Whilst the capital remains the largest single ecosystem, over 2/3 of the investment, growth and activity is outside of London, centred around the known clusters – Cambridge, Edinburgh, Bristol, Oxford, Manchester and Sheffield.
But there are clouds on the horizon, with Brexit amongst the darkest. A gloomy note from the capital suggested that 1 in 10 London tech companies have experienced investors withdrawing or holding back and apparently the majority of tech investors think that Brexit will hamper the UK’s ability to retain its pre-eminence.
However, perhaps every cloud has a silver lining. A shift in focus away from Europe will open channels to other markets. The UK’s main tech competition is from the US and the Far East. It is in these geographies where mutual collaboration and market opportunities lie – not in Europe. Chinese investors are now focussing on the UK - Cocoon Networks’ £0.5bn tech fund is Chinese backed and Jagex Games was acquired for $300M by Zhongjin Holdings. Last year, Japan’s Softbank acquired ARM – and committed to retaining Cambridge as the R&D focus.
Given that innovation by definition means doing something new, a post Brexit landscape could provide exactly the stimulus and opportunity that UK tech thrives on.
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