Google’s post-Brexit vote of confidence in the UK

SUMMARY:

Brexit hasn’t stopped Google from upping its investment in the UK as CEO Sundar Pichai flags up the benefits of doing business in Britain.

Pichai and UK digital minister Matt Hancock
Pichai and UK digital minister Matt Hancock

With the post-Brexit planning still up in the air (if we’re going to be polite about it), some good news yesterday for the UK government as Google made a massive £1 billion commitment to a new HQ in London and 3000 new jobs by 2020.

Assuming all goes to plan, that should be comfortably past the actual Brexit. While there have been a slew of headlines about big businesses threatening to up sticks from the UK post Brexit, Google CEO Sundar Pichai was talking up the UK yesterday.

The UK has been a tremendous market for us. We see big opportunities here. This is a big commitment from us — we have some of the best talent in the world in the UK and to be able to build great products from here sets us up well for the long term.

Pichai told the BBC that the new HQ decision was taken having built Brexit into consideration:

The innovation we see here, the talent we have available here and how on the cutting edge of technology we are able to be here makes it an incredible place for us to invest,” he said. We do value how open and connected it is and we can bring in talent from anywhere in the world and we value those attributes and we are optimistic that those will stay true over time. So we did [make the investment decision] taking into consideration [the Brexit referendum], but we are very optimistic.

The new HQ will be an extension of Google’s existing campus in the Kings Cross area of London. Once built, the three building campus will house 7000 employees by 2020 and will be the first wholly-owned and designed Google building outside the United States.

Politicians on both sides of the Brexit debate were united in their praise for the Google investment. Chancellor Philip Hammond said:

It’s further proof that Britain is open for business and that we continue to be an outward looking, world-leading nation.

Meanwhile Mayor of London Sadiq Khan, no fan of Brexit,  said:

This is a vote of confidence in our great city – creating high-skilled jobs, supporting growth and demonstrating that London is open to business, new investment and talent from around the globe. London is one the world’s leading technology hubs and investment into the capital post-Brexit remains robust, so Google’s expansion will further strengthen our city’s reputation as a global leader in digital technology.

Love-in

The love-in continued elsewhere yesterday as Google announced plans to train UK workers in free face-to-face digital skills lessons in 100 cities and towns across the UK throughout 2017.  On offer is five hours of free digital skills training to anyone who wants it, with both face-to-face and online mentoring on basic web skills available to users.

This is an extension of Google’s Digital Garage, launched last year, which reckons to have been accessed by a quarter of a million people in the UK. Pichai said:

No matter where you live, no matter where you’re from, no matter what your job is – you deserve access to all the information, education, and opportunity the web has to offer. Our aim is to make sure that every individual and business in the UK has the support they need to make the most of online tools to innovate, compete and have fruitful careers in the digital age. Whether you’re a student looking for your first job, a small business trying to attract new customers or a musician promoting their music, I’d like to encourage you to take advantage of the free training we are making available.

This is music to the ears of Matt Hancock, UK Minister of State for Digital & Culture, who joined Pichai for the announcement yesterday:

Today’s pledge from Google is very welcome in supporting that national goal. It will help more people to get the tools they need to contribute to society and enjoy the benefits of the internet.

Indeed so excited is Hancock that he’s pinned his enthusiastic endorsement of the Google news at the top of his Twitter feed! With the digital skills deficit being a major threat to UK productivity – as cited by the CEO of Barclays Bank in July – such private sector funded free training is of course helpful.

To top off a busy day, Pichai also announced that Google will be providing virtual reality hardware to one million UK school children by the end of the school year in 2017.

My take

On the face of it, a lot to be pleased with here and a clear vote of confidence in the UK tech sector, coming on the back of Apple’s decision to base its own European HQ in London’s Battersea Power Station development. With the leaking of Deloitte’s ‘no plans in place for Brexit’ memo yesterday, the Google news was immaculate timing for the government.

That said, there was a clear cautionary note struck by Pichai when he talked about the importance of open borders and free movement for skilled migrants into the UK to provide the necessary levels of staffing for Google.

Immigration levels and freedom of movement are of course among the major sticking points to date between the UK government and the Junker administration at the European Commission, so it’s clear that Google will monitoring what develops during the Brexit negotiations there.

It’s tempting to add a note of cynicism in here as well by contemplating that Google may work on the assumption that it’s likely to get better treatment from the UK government than it will from Junker and the Eurocrats. The firm is under pressure over its tax arrangements, while the Commission’s top anti-trust official Margrethe Vestager is coming after Google like the Witchfinder General.

In contrast, Google’s links to the Conservative Party in the UK, particularly to the David Cameron regime, are strong and have been widely commented on. Tax is an issue in the UK as well, but in January this year, Google agreed to pay a £130 million back taxes settlement to the UK Revenue and Customs, a sum which critics dismissed as derisory.  That issue isn’t going to go away any time soon.

Still, yesterday’s three announcements will inevitably be seized upon by the government and by Brexit supporters as indicative that the scare stories about companies fleeing the UK are, as yet, unfounded. 

Image credit - Google