After Eurovision, douze points or nul points for UK tech investment pre-Europe referendum?
- Summary:
- The UK doesn't stand a chance of winning the Eurovision Song Contest any longer, but will the forthcoming referendum on Europe lead to nul points for investment?
It was Eurovision Song Contest weekend here in Europe (and Australia this year, for some reason), the annual festival of song that’s intended to symbolize the unity of the European nation states, but which in fact simply exposes the cultural fault lines that exist across the region.
As usual the UK came near the bottom of the pack when the results came in.
Every Eurovision round of voting is riven by political voting for neighbouring countries, with the entry of countries from the former Eastern European block magnifying the problem enormously.
And with the UK’s ambiguous stance on even being part of Europe at all, the chances of scraping into the top half of the leader board get more remote with every passing year. (Although the ignominy of null points went to Germany this year!).
Our prospects aren’t going to get any better between now and 2017 either, as the re-elected-with-a-majority Conservative government makes good on its commitment to hold an ‘in/out’ referendum on whether the UK should stay part of the European Union or withdraw.
With the opposition Labour Party now doing a ‘reverse ferret’ on its policy of not supporting such a referendum, a vote is now inevitable in some form or another. So, null points Royaume Uni for some time to come I’d say.
But away from the fripperies of Eurovision, there are some serious technological implications about a so-called BrExit from the EU, not least the uncertainty that will be inevitable in the run-up to a poll and which could have serious impact on inward investment plans.
Cloud in Europe
Among the non-US firms most heavily investing in Europe over the next few years is Salesforce, which has already opened a UK data center to service UK customer needs and will be following this up with similar centers in France and Germany.
Last week at the Salesforce World Tour event in London, Salesforce President Keith Block made great play of the UK being perceived as the hub for the US firm’s advance into Europe:
We are absolutely committed to the UK and Ireland and international growth is a huge part of our strategy. The UK is the hub of EMEA, the engine of growth for us.
Would that still be case if the UK withdrew from formal EU membership, I asked Block later. His stance was very firmly that this was not something that would impact on Salesforce investment in Europe.
Earlier I’d asked Salesforce’s EMEA Chairman Steve Garnett the same question. He offered up a personal view, not a Salesforce corporate one, but one shaped by several decades as one of the UK’s top technology executives after stints at Oracle and Siebel:
My personal view is that we are part of the European community and we share a lot with them. Sure, do we want some better rules and regulations and not quite so much red tape? I can understand that from a business point of view but I would prefer to be in the EU as opposed to outside it.
He added the same point as Block would later. that Salesforce would remain committed to European investment:
I think, whether we were in or out, the phenomenon we are seeing today and have been seeing for the last 10 or 15 years with Salesforce would supersede any sort of divide. We see our expansion in countries that are in the EU [and] outside the EU, so to some degree, I don't think it matters massively. But personally, my preference would be to stay.
Reform needed
The need to reform and cut red tape was picked up by Stephen Kelly, CEO at Sage, who stated:
I would love to see the debate be about reform and cutting red tape and cutting crazy regulations. For a small business with five employees, if they go to six employees, it costs another £15,000 in health and safety charges – that's crazy.
“We've got to cut red tape and reform. That should be the debate and that will help businesses across Europe. That's the key aspect we would like to see – the real issues being debated rather than just those that are populist.
Kelly made an interesting point about his firm’s traditional small business customer base - perhaps it doesn’t really have a day-to-day impact?:
I am a champion of small and medium-sized businesses in the UK. The reality is that businesses like consistency and stability; we don't like uncertainty. So when you double-click into it, you've got to look at the specifics – if you are a florist up in York, does it really matter? Ninety per cent of business for most SMBs is within a 30-mile radius.
Digital sidelines?
There is another angle beyond investment however. With the European Commission hellbent on standardising every technology issue it can find, from data privacy though intellectual property to cloud computing, the UK is already standing outside Brussels desired direction on almost all of these.
As negotiations in these areas continue, it’s questionable how much attention will be paid to British objections if it’s assumed other member states that the UK won’t be around to have to live under them anyway. Given how long most directives take to become law, it’s possible the UK authorities won’t even have to vote on them!
Charlotte Holloway, head of policy at UK technology industry group TechUK, makes the point that Europe as a whole could lose out here:
Navigating the EU Referendum question will be a real political challenge. A Digital Single Market built in the image of the UK's world leading digital economy could be an important part of the narrative about how the UK can lead and influence the debate in Europe in a way that works for Britain.
It is important for government to stay focused on what matters to the UK economy – a smart tech enabled policy agenda could deliver real dividends by 2020, whether that be through new high-value job creation, increased productivity, or deficit reduction through smarter public services. Whilst political capital will necessarily have to be expended on political issues of the day – ministers must stay focused on what matters.
My take
Business needs stability. If the powers-that-be at Tech City in London, for example, are to continue to woo foreign investors in, there needs to be continuity and predictability.
Prime Minister David Cameron formally starts work on his hoped-for renegotiations with other EU member states this week. With the zeal of a born-again convert - or a party trying to find an angle on an embarrassing political about-face - the Labour Party’s now calling for the referendum to come before 2017, a sentiment that Cameron seems to be himself pushing.
It would be best for everyone for there to be an answer to all this as soon as possible, whether it’s douze points or nul points from the British jury for Europe.
Disclosure: Salesforce is a premier partner at time of writing