Life after Brexit - tech industry confidence slumps, but UK staff morale still strong

Profile picture for user slauchlan By Stuart Lauchlan August 10, 2016
Summary:
Post-Brexit vote, UK tech industry confidence has slumped, according to TechUK members, while other studies indicate that other nations take a different view of the implications.


Brexit

As we head towards the two month anniversary of the Brexit vote, have we moved much further on from the ‘nobody knows what happens next’ state of mind?

The sky still hasn’t fallen, even if the pound has, and the catastrophic prophecies of the armageddon pedlars have yet to come to pass. 

What hasn’t changed - and in fact, appears to be on the increase - is the number of surveys/studies into the post-Brexit impact on the tech industry and its players. Some of these have more validity and credibility than others; some of them are frankly opportunistic bandwagon riding. And the one thing that is certain - they mostly contradict one another in some way or another.

This week’s market confidence study from industry lobby group TechUK did catch my eye with a headline statement that 70% of tech firms are positive about growth prospects over the next two years. That sound pretty upbeat, until you realise that percentage is down from 93% back in March.

Key findings from the study:

  • One in five respondents (20%) describe themselves as very positive, down from 52% in March 2016.
  • Over three quarters (77%) of tech companies surveyed with a European HQ have those headquarters based in the UK.
  • The top three European markets for respondents were Germany (41%), France (36%), and the Netherlands (17%).
  • Just one in five companies (22%) are positive about the impact of the vote to leave the European Union on non-EU exporting over the next two years.
  • Nearly half of respondents said that the outcome of the EU referendum would have a negative impact on foreign direct investment (49%), capital investment (48%), and R&D spend in the UK (48%) over the next two years.

Julian David, CEO of TechUK, says:

UK tech is resilient and innovative but this substantial drop in confidence clearly demonstrates the need to be vigilant to immediate and pressing concerns faced by tech companies. To maintain the sector’s exceptional growth rate they need to be confident that they will have access to the digital single market, a talented workforce and that international data flows will be protected.

Our members are also very clear that there is also an opportunity for the UK. Now is the time to develop a world-leading digital infrastructure, and make the UK the place to invest and grow. Government must power this digital revolution, and the Industrial Strategy is a great starting point. Government needs to lead by example and take the opportunity to focus not just on protecting traditional industries, but on growing these industries through digitisation and supporting new industries that will drive the future economy.

As others see us

A second study, The Brexit Reaction Report from tech jobs board firm DICE, finds that morale among tech industry employees seems higher than among employers.

The report, which polled 1200 employees and employers, found that only 10% of employers have seriously considered moving their UK operations to another EU nation as a result of Brexit, despite 59% of UK tech employers worry that Brexit will make it more difficult to identify tech talent within the UK.

On the employee side, only 22% of UK candidates have altered their career plan as a direct result of the Brexit vote, although 44% of tech pros said they were more likely to look for a job in another European nation. Dublin (54%), Berlin (49%) and Amsterdam (47%) were the most popular destinations for those looking to work abroad.

Of course, Brexit is not a UK-only issue. The attitudes of other nations have an impact on the UK tech industry. According to a survey by Spiceworks, there are some divergences of opinion here.  For example, 36% of IT professionals in the US reckon that the UK will lose influence in the global IT market, while only 27% of UK-based IT people  feel the same way.

Meanwhile 34% of IT professionals across the globe agree a British exit will discourage tech talent from moving to the UK, against a backdrop of uncertainty over the status of EU citizens living and working there and global companies questioning whether the UK still serves as a good base for European operations.

Globally 41% of IT professionals argue that the UK’s exit from the EU is causing confusion in the IT market, while 44% of respondents in the UK saying Brexit will cause future uncertainty as it’s unclear what it really means for the UK, Europe, and the rest of the world.

In other words, nobody knows what happens next - just like it was back on 24 June.

My take

Another day, another Brexit reaction/predictions survey - and much, much more to come before we really do know what happens next.