Is there an economic case to be made for the United Kingdom leaving the EU? How will Brexit affect new businesses starting out in budding tech hubs all over the UK? Entrepreneurs and investors from both sides of the debate gathered at Business Rocks 2016 for a live-streamed debate.
Brexit would close off the UK to tech talent
“Shortage of talent is the number one problem for the digital community,” says Russ Shaw, Founder of Tech London Advocates, a not-for-profit organisation dedicated to positioning London as a world-leading city in the technology space. Shaw adds that 87 per cent of the advocates within TLA have stated their intention to vote “remain.”
The “Leave” side argues that unwieldy regulation is slowing down business growth and puts larger corporations at an advantage over smaller ones. Jenny Tooth OBE, CEO of the UK Business Angels Association, believes that we stand to lose far more than gain.
“It’s so easy to talk about regulation,” she says, “but what we’re really talking about is the loss of our markets, our access to talent, our opportunities to attract the skills we want to this country… It’ll take years to work all of this out. The alternative models they’re suggesting are absolutely crazy.” She points out that of all the British start-ups getting major funding at the moment, at least a quarter have non-British founders from elsewhere in the EU.
The UK will be left behind the rest of Europe
The European Commission is currently working to implement its proposed Digital Single Market strategy, which sets out to “digitise European industry.” This will allow governments, businesses and research institutions access to a standardised set of the latest digital tools across 28 member states without regulatory disruption. Such a harmonised approach ensures that citizens across the EU don’t miss out on valuable goods and services.
It is believed that the Digital Single Market has the potential to create thousands of new jobs and pump billions back into the economy with the creation of innovation hubs all over Europe. Without it, a series of online barriers would rise up between Britain and the rest of the EU, making collaboration and trade needlessly complex.
Brexit would also cut off millions in EU funding to academic research in the UK, leading to a plateau in innovation. “We get so many things from Europe that we can’t get elsewhere,” says Tooth. “We have been the biggest recipients of research funding from the R&D programme in the EU… We would be losing so many of the advantages that we get directly from Europe.”
Is it just too big a risk?
There are concerns that the huge amounts of uncertainty brought on by Brexit would have an undeniably negative impact on consumer confidence and undermine the UK as a whole. Of course, the “Leave” side would argue that nobody can predict with any surety whether that will really be the case, and that the opposite could in fact be true.
“It’s possible, but not probable,” says entrepreneur and accelerator venture partner Volker Hirsch. “I wouldn’t subscribe to that business plan, and neither would a consumer… There are way too many uncertainties. And this isn’t scaremongering; this is just looking at stats and probability.”
“Britain is fast becoming a tech nation, and the best place to launch a business in Europe,” says Shaw. “[Brexit] will be the start of smaller businesses in the UK selling less of what they do.”