British withdrawal from the European Union, also shortened to Brexit (a portmanteau of “British” or “Britain” and “exit”), happened last week. The result of this referendum was 51.9% in support of an exit (17,410,742 votes) and 48.1% (16,141,241 votes) to remain with a turnout of 72.2% and 26,033 rejected ballots.
The European Union – often known as the EU – is an economic and political partnership involving 28 European countries (click here if you want to see the full list). It began after World War Two to foster economic co-operation, with the idea that countries which trade together are more likely to avoid going to war with each other.
It has since grown to become a “single market” allowing goods and people to move around, basically as if the member states were one country.
The effects of the Brexit vote have been felt in all spheres of the economy, from a free fall of the financial sector, labour, immigration and importantly tech.
Opinions have been made on the effects of the potential exit especially from tech, sample the predictions below
Digital economy jobs
Earlier this year, the Tech City cluster of businesses reported that 1.56 million people were employed in digital companies in the UK, with 328,000 of those in London.
The report also noted that the digital economy grew a third faster than the UK economy as a whole.
But does this success now hang in the balance?
“I have concerns that the local market might slow down,” said Drew Benvie, founder of London-based digital agency Battenhall told BBC
Some have met the news with optimism, however.
“Technology is a sector that will only increase in importance and works without borders,” said Tudor Aw, head of technology at KPMG UK.
Taavet Hinrikus, the co-founder of money transfer company TransferWise speaking to the Telegraph said the vote “is not good news” for the tech sector.
“The two main benefits of being part of the EU are access to talent – because of the free movement of labour – and the fact that you can ‘passport’ regulation so if you’re regulated in the UK, you’ re regulated across the EU,” he said.
“We expect a significant decrease in new incorporations in London in favour of Berlin, as well as an influx of successful London start-ups,” said chief executive Christoph Gerlinger.
Amazon was on the chopping block yesterday, losing more than 3%. It has long used the UK as a shipping hub for the rest of Europe, with distribution centers roughly evenly divided between the U.K. and Germany. It has invested more than $6.3 billion in the UK.
But Brexit presents, at best, uncertainty that cross-border shipping will remain frictionless for companies serving Europe from the UK, from Amazon AMZN -1.09% to hardware manufacturers.
In the wake of the leave vote he said Europe’s first major tech company, the kind to rival Google and Facebook, could well come from Paris or Madrid rather than London.
“I’m not sure if the headquarters of the future will be in the UK – or Paris, Munich or Madrid,” he said.
Mr Hoberman urged the Government to retain strong links with Europe, in particular access to the Digital Single Market, an EU initiative designed to remove barriers for digital goods.
“We don’t have enough pan-European giants because its still too hard to scale properly across Europe. The single digital market is a very exciting project for the rest of our European friends,” he said. “Can we keep access to it? That would be what a success would like in this new world.” Read more
We will continue to observe the resultant effects on the tech economy