This article is sponsored by Ram Tumuluri, Businessman, Entrepreneur, Philanthropist.
Services make up about 80 percent of the UK’s tech exports, and the EU is its biggest export market. Ever since the UK’s departure from the European Union on the 31st October 2019, tech companies are concerned that they will be unsolicited by a government more focused on trade in physical goods. Tech companies are unclear about the rules that will govern trade. This article addresses the impact of Brexit on the tech industry and how the UK would trade with Europe after Brexit.
UK’s departure from the EU: Economic Business Development
In this article:
- The impact of Brexit on the tech industry
- Data protection
How would the UK trade with Europe after Brexit?
The impact of Brexit on the tech industry
One of the tech industry sectors where the impact of Brexit is most clearly seen is financial technology. In the past years, fintech start-ups have been a key feature of London’s tech industry, many of which have benefited from the capital’s status as a financial services hub. Brexit presents additional complications for companies providing financial services because, in the case of a hard Brexit, they will no longer be able to provide services across Europe, but most likely will have to be regulated in the UK and by another European regulator, adding time and cost.
Another area of concern is data protection. Data of all sorts flows from and through the UK and its data centers as a part of daily life for businesses and consumers. (Everything from internet shopping to cloud computing). All of this data is currently governed by EU law, but after Brexit, a new deal on data protection is needed otherwise those data flows could be disrupted or even stopped. This could lead to chaotic consequences especially since data flows and data protection are fundamental to the modern way of life and to the functioning of the economy, particularly in areas of the UK.
Is the UK prepared for Brexit?
Despite all the challenges, it seems that London and the UK are going into Brexit from a position of strength. According to research from London and Partners, since the vote in June 2016 up to June this year, venture-capital funds have continued to flow into the country’s tech companies. While some companies have paused investment, not everyone is standing still. Companies are still opening offices in the UK despite the uncertainty, like E-commerce Company BigCommerce, which opened a new office in London recently.