An entente that's less cordiale - the UK and France's battle for tech talent post-Brexit

Profile picture for user slauchlan By Stuart Lauchlan December 5, 2016
Summary:
The digital ministers of the UK and France sat down at the TechCrunch Disrupt conference in London yesterday to discuss talent after Brexit. The entente was still cordiale, but there's competition ahead.
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Matt Hancock

One of the many questions emerging out of the Brexit vote in the UK is that of how current European Union (EU) partner countries will react to the prospect of what will effectively be a free pass to poach investment away from Britain?

Already London’s Tech City has seen the German FDP Party sending a truck with an advertising hoarding around the streets encouraging start-ups to ‘Keep calm and move to Berlin’, while various French politicians have made no secret of wanting to take over London’s position as the financial center of Europe.

Yesterday, at the TechCrunch Disrupt conference in London, the digital ministers of the UK and France - Matt Hancock and Axelle Lemaire - sat together on a panel that suggested that while the entente was cordiale for now, this might not be the case for much longer, despite Hancock attempting to paper over the cracks:

It’s tempting to see all this as a competition. You can see from Axelle and I that we are both quite competitive people, wanting our countries to be the best. Actually there’s a huge amount that’s beneficial. London is stronger when Paris is stronger in the tech scene. It’s not a zero sum game.

While concurring that it might indeed not be a zero sum game, Lemaire made it quite apparent that the French position is going to be one of attempting to woo disaffected or concerned tech talent post-Brexit:

Why the UK is so good at innovation is that they are in a capacity to attract the best researchers in the world. I was in Cambridge and was very impressed by this very powerful med-tech corner that they are creating. But the researchers are extremely worried at the moment because when you enter into a research contract it’s for a minimum of five years. If you work on Artificial Intelligence at the moment you do need European grants and fundings.

Start-ups do benefit from transfers of technologies coming from research centers — so what is going to happen if on one hand, UK government passes tax deals for big companies…but on the other hand they do not have the ability to fund the long term investments that are still needed to anchor this whole innovative economy. These are questions we are asking ourselves. I believe the answer is easier to find at the European level.

Global, not European

For his part, Hancock tried to steer the conversation away from a purely European perspective, which given the topic of the panel was about a talent brain drain post-Brexit was always going to be a futile exercise. But he gave it his best shot:

The question on research is how you get the best of global research. Of course the European angle is very important and we’ve got to work through that over the next couple of years. But ultimately research knows no boundaries. There’s a global research community who talk to each other much more than they did even ten years ago. So, we’ve got to take a global approach and make a success of it globally.

He also stated:

You can’t just see this through the European lens. You’ve got to see this through the lens of what is the talent we need to make sure that the UK can stay at the front.

Lemaire meanwhile was quite happy to discuss how to pull in global talent:

Paris and France more generally are certainly in a good position at the moment in Europe, but also on the international stage, to attract the most innovative people. But it’s not only the cynical strategic position. What is also important to remember here is why we want to have freedom of movement for people. We consider that if we belong to the European Union, it’s because it was built on certain values…one of them being freedom. And it does translate in concrete rights, such as the freedom of movement of people.

We are going through a massive revolution which is digital. Economies used to be built on agriculture. Then they were built on manufacturing and what we would consider today as traditional industries. Tomorrow they will be built on data, thanks to people. So human resources are becoming the key assets, not only for start-ups, to become competitive. People are becoming the number one asset for companies and the new business models that they need to invent. So, yes, France wants to be one of the most attractive countries in the world for this asset.

In support of that ambition, Lemaire cited initiatives such as the French Tech Ticket, a visa program to invite tech entrepreneurs to come over with a grant, with seed money and a visa for themselves and their families. She also pointed to Station F, an accelerator which is going to open up in January as the biggest incubator in the world for start-ups.

Hancock played his card here in the form of recent investment decisions - and confirmations of earlier decisions - by US tech vendors to set up in the UK:

Post-Brexit, as a Remain voter, I was worried about the impact on the economy. But over the past month or so, we’ve seen an increasing number of investment decisions come to the UK in a way that we’ve been really cheered by, decisions by Facebook, Microsoft, IBM and others to invest in the UK. They’ve taken stock after the Brexit decision and come to those decisions and gone for the UK.

Apple’s decision to invest in the old Battersea Power Station in a really big way, which came after the Brexit vote, that was about where do we build our European HQ. It wasn’t about taking away from anyone else, it was about where do we build for the future. Those decisions keep coming back to the UK and to London.

Dodgy ground

Hancock also talked up the recent decision by the UK Treasury to make available an additional £1 billion for investment in broadband infrastructure. That one was just too easy for Lemaire, who countered:

The total amount of public and private investment in high-speed broadband  in France up to 2021 is €21 billion. The French plan is the only one that has been entirely and globally validated by the European Commission. It is not considered as state aid because we’re not favoring one telecommunications company rather than another one.

In light of BT’s dangerous ongoing near-monopoly in the UK, that last comment's undertones bear consideration. But Lemaire was on more slippery ground when she opened up the political and societal implications of the Brexit vote:

Who voted for the Brexit? That is the real political challenge. I think it’s all very well to talk about how are we going to attract the best talent in London — but will they feel welcome by the rest of country?

Given the rise of the Front National and Marine Le Pen, there’s a degree of glasshouses and not stone throwing here, made worse by Lemaire’s airy dismissal of Le Pen as “not a mainstream politician” despite her poll standing in the forthcoming Presidential elections in May. The answer, said Lemaire, is digital education and investment:

When you look at people who support Marine Le Pen, they are people who live in rural areas and in the suburbs, not those who are supposedly the ones who are most affected by migration, but those who fear about the future more generally. We’re putting one billion euros on the table to invest in digital education. We won’t see the result tomorrow morning, we’ll see the results in one generation, in ten years time.

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Axelle Lemaire

Given the election is in less than six months time, ten years might be considered a tad too late, but Lemaire’s argument does raise the question of migrants and visa systems post-Brexit.

On this point, Hancock was clear that an Australian points visa system is not on the cards for the UK  and he didn’t want to touch the idea of a STEM passport, as proposed by Hillary Clinton during the US Election and incredibly unlikely to happen under Donald Trump.

So what will be happening? The response was mission statements and, brutally, waffle:

We are clear that have to be open and welcoming to the brightest and the best from around the globe. If you think about what’s happened over the last few years, we’ve had freedom of movement within the European Union. Outside of that we haven’t and we’ve had a fairly tight visa system. We need to make sure that we are clearly attracting and winning  that global war for talent.

Ok. Fair enough ambition. How is the UK going to pull it off?  Well, by:

Getting the systems right, getting the systems in place, using the best technology actually to ensure that those systems are effective. We’ve been doing this with visas to individual countries over the past few years, improving significantly, for example, the visa system with China through a lot of work to make sure that it works effectively, it works technically.

Or put it another way - he didn't know the answer.

My take

If this was a competition, then France won on the day.

The UK position on most things - as is generally the case with Brexit at present - was built on holding statements, such as this comment from Hancock on a revised tech visa system:

Clearly we’ve got to get this right over the next two and a bit years.

Clearly we have indeed. But equally clearly, there isn’t a plan in place as yet.

But in that pursuit of global talent, there are plenty of reasons for people to want to come to the UK, added Hancock:

People come to places where they want to live. The UK culture scene and London in particular as an amazing place, one of the best cities in the whole world to live your life, is an important part of attracting talent.

Maybe it's just me, but I’m deeply unconvinced that choosing to pick a battle with the French on the basis of culture is a winning strategy.

The one thing Hancock was clear about though was there’s no turning back on Brexit:

The decision’s been taken, the vote happened.

That being the case, there needs to be a lot more thinking done very quickly. Hancock said:

We want to continue to attract the brightest and the best from right around the world.

Sadly, you don’t always get what you want. You need a plan. And there isn't one at present.