Leaving the EU would render tech unicorns HQs rarities in London, says Russ Shaw, founder of Tech London Advocates
London’s tech community is virtually unanimous: EU membership is good for digital business. A Tech London Advocates’ survey released this week found that 87 pc of London’s technology community thinks that the UK should remain part of the European Union.
This resounding ‘Yes’ to EU membership should come as no surprise: technology companies are geared to drive efficiency and innovation in global communities. Sharing ideas, experience and skills is fundamental to the digital community. For us, ‘Brexit’ flirts with a situation of economic uncertainty that is entirely avoidable, bad for the digital economy and bad for the country as a whole.
Over the past decade, London’s technology sector has become one of the world’s centres of digital innovation because of the key benefits that EU membership provides: talent, trade and power. I fear that these three keys to success will be damaged if the UK were to leave the EU.
The EU’s free movement of labour has enabled London’s tech sector to grow exponentially over the last several years. With no need for visas and work permits, London’s start-ups and scale-ups can welcome the best and brightest from across the EU at short notice and often at no extra cost. This gives British technology companies access to a population of more than 500 million – larger than the US. This is a unique talent pool that we cannot allow to slip from our grasp.
EU membership provides London’s tech community, and the British economy at large, with an unrestricted trade flow. In 2014, nearly half of all UK exports of goods and services were destined for the EU. It is this trade flow that has been, and will continue to be, a key economic driver of UK growth and prosperity. Imagine London’s start-ups and scale-ups having to pay export tariffs on 50 per cent of all their outgoing services. The financial impact would be crippling.
As an established or emerging economy, nations need trading partners that have the capacity to drive growth and sustain natural setbacks. EU membership boosts Britain’s global profile and often reassures investors from across the globe. Brexit could plant dangerous uncertainty in the minds of these global investors by bringing a high degree of uncertainty if Brexit were to occur. Membership also enables Britain’s businesses to benefit from the bargaining power that comes with belonging to a significant trading bloc. It would be incredibly shortsighted to walk away from the economic security and international clout that this bargaining power provides.
London is the shining star of Europe’s tech constellation: according to research conducted by GP Bullhound, 13 of the continent’s 40 ‘unicorns’ (billion dollar tech companies) were founded in the capital. Global companies want to operate in London to have access to our growing technology sector, but also because the UK is seen as the gateway into Europe. Brexit would render unicorns and global HQs rarities in the capital.
We hope that representatives from other industries will follow the lead of the tech sector and speak out about the benefits associated with EU membership. For now, we are proud to launch the ‘TLA EU-Yes’ group, and we look forward to highlighting how EU membership helps London’s tech community, achieves excellence and continues to be the fastest growing sector of the economy. Let’s embrace our membership of the Union and continue to reap the benefits, which will provide significant economic growth for all to benefit.
Russ Shaw is founder of Tech London Advocates