Brexit and London’s Tech Sector

Britain recently held a referendum leading them to the notable decision to leave the European Union. This ‘Brexit’ leaves many questions unanswered, including questions on how disbandment from the EU might affect the technology hub that is the city of London. 

Recent statistics provide us with a picture of what the answers to these questions may look like.

#1 ranking. The European Digital City Index ranked London as number 1 in all of Europe.¹ This ranking is based on how well a city supports digital entrepreneurship. Under research put out by Bloomberg Philanthropies London is considered the FinTech capital of the world.² London’s position as a technology hub cannot be overrated. More people are employed in London’s tech sector than in any other city’s tech sector in the world.³ London’s booming tech sector causes the city to quite possibly be Europe’s most influential city in the realm of technology. 

1.46 Million People were employed by digital companies according to a 2015 study.⁴ This growing industry boasts the city of London to be the headquarters for 20% of the United Kingdom’s tech companies.⁵ The technology sector in the UK employs many people with international interests, contributing to its influence as a major global technology hub. England’s exit from the European Union may potentially make smooth interactions with the rest of Europe hard on employers and employees. This is a present fear for a business sector within London that understands global and Pan-European interaction to be vital.

$1.6 Billion was raised by London-based tech companies in the first nine months of 2015, beating out the $1.3 Billion that was raised in 2014.⁶ The $1.3 billion raised in 2014 was double the amount raised in 2013 and ten times the amount raised in 2010. London continues to be a metropolitan area on the rise. Over the next ten years, London’s tech sector is/was expected to deal with over $13 Billion of economic activity.⁷ Over the past years London has been experiencing a new wave of momentum. The “Brexit” situation may halt the momentum of growth that London is experiencing.

87% of technology firms in the UK wanted to remain a part of the EU prior to “Brexit,” according to data provided by a London technology industry group.⁸ “Brexit” may have an immediate impact on how organizations interact with and through the city of London and the state of the United Kingdom. There are already present fears amongst those within London’s tech sector that the exit from the EU will make it much harder for British Tech businesses and organizations to reach other European countries and their companies- potentially affecting London’s status as a major global technology and FinTech hub.

60% of Londoners voted to stay in the EU.⁹ Statistically London voted differently than the UK which voted to leave the union by a narrow margin (51.9% to 48.1%).¹⁰ London on the other hand voted to remain. Part of the reason for this inconsistency may be that London’s Tech sector is crucial to the UK’s economy, and valuable to the world’s business sector of technology. Those in that industry have international ties and understand that the decision to exit from membership in the EU may halt London’s tech growth. Many believe that this may cause movement away from London’s tech sector towards the tech sectors of other major European cities.

Brexit has left many unanswered questions within the UK, and London’s sector of technology is strongly feeling the uncertainty.

References

1, 3.	↑	European Digital Forum, and Nesta. “{{ Metatags.fb_title }}.” European Digital City Index 2015. European Commission, 2015. Web. 01 July 2016.
2.	↑	Mandel, Michael, Dr., and Jonathan Liebenau, Dr. “London: Digital City on the Rise.” Mikebloomberg.com. Bloomberg Philanthropies, June 2014. Web. 1 July 2016.
4.	↑	Tech City. “Welcome to Tech Nation 2016: Transforming UK Industries.” Tech City UK. Nesta, 2016. Web. 1 July 2016.
5.	↑	Tech City. “For Investors – Tech City UK.” Tech City UK. Nesta, 2016. Web. 01 July 2016.
6.	↑	Pattie, Ben. “Record Venture Capital Investment in UK Tech Sector over Last 9 Months.” Record Venture Capital Investment in UK Tech Sector over Last 9 Months. London & Partners, 08 Oct. 2015. Web. 01 July 2016.
7.	↑	London Partners. “Mayor of London and Leaders of Global Tech Scene Come Together to Launch London Technology Week.” Mayor of London and Leaders of Global Tech Scene Come Together to Launch London Technology Week. London Partners, 16 June 2014. Web. 01 July 2016.
8.	↑	Hern, Alex. “Britain’s Tech Sector Overwhelmingly Opposed to Brexit.” The Guardian. Guardian News and Media, 04 Mar. 2016. Web. 01 July 2016.
9, 10.	↑	Coles, Malcolm, and Ashley Kirk. “EU Referendum Results and Maps: Full Breakdown and Find out How Your Area Voted.” The Telegraph. Telegraph Media Group, 1 July 2016. Web. 01 July 2016