Lee Parry is the CEO of Enigma Recovery, an online service that helps users recover their valuable data when their tech fails. In this article, he discusses what a no-deal outcome could have in store for his business, and the wider tech sector.
With a no-deal Brexit looking increasingly likely, businesses across the UK are starting to brace themselves for serious disruption this autumn. And, while the tech sector will face many of the same challenges as other industries, it looks as though our departure from the European Union will affect us slightly differently. Here, I’ll take a look at the potential fallout for the tech sector if a deal isn’t reached by 31 October.
Overseas revenue should remain steady
Many industries could see their revenues severely affected by a no-deal outcome, particularly if they rely on parts and supplies from the EU, or export their goods overseas. But, owing to the digital nature of our products and services, our revenue streams are unlikely to be seriously affected by a no-deal Brexit.
Even though 85% of our revenue is generated overseas, customers access our services online, meaning our revenues are unlikely to be affected by any issues that crop up post-Brexit. So, we’re fortunate in that problems that may have a serious impact on other industries, like supply chain issues or queues at the border, won’t take a toll on our revenue.
Access to funding could be reduced
While we don’t have to worry too much about Brexit impacting our revenue streams directly, crashing out of the EU this October could still have serious effects. The EU currently offers a lot of funding for tech, including Horizon 2020, a research and innovation programme that includes an €80 billion funding scheme designed to promote Europe’s global competitiveness. The scheme welcomes bids from science, tech, and other industries that aim to promote innovation. Here at Enigma, we’re currently in the process of applying for a €1.5 million grant, but this could be seriously jeopardised if no deal is reached.
Although the government has made promises to protect all funding bids, exactly how this will work is unclear: the most likely scenario is that Britain will still be eligible, but will be treated as a third country. Whether funding could be delayed thanks to this uncertainty is not yet known. But, as the initial purpose of Horizon 2020 was to cut red tape and ensure businesses could access funds quickly, it’s unfortunate that this process looks set to become much more complicated, and potentially more time-consuming.
Hiring top talent could become complicated
Due to the nature of the tech sector, our workforce needs to be highly skilled, and it’s often difficult to find qualified people closer to home. Freedom of movement within the EU has made attracting and securing top talent from overseas much easier, but now, with no agreement in place, this is under threat. The government has even suggested that they might block all freedom of movement at the borders in a no-deal scenario, which would make recruiting overseas staff a bureaucratic nightmare.
Even if the government makes some allowances that would make recruiting highly skilled talent easier, it’s still likely to have a serious effect. In particular, I’d expect that many talented EU candidates may be put off from working in the UK, as they may be worried about getting caught up in travel restrictions at some point in the future. At any rate, it’s easy to imagine that many would rather seek work in other EU nations where freedom of movement is still in place, rather than risking a move to Britain. In short, mobility is very important in the tech industry, and losing this would put companies based in the UK at a serious competitive disadvantage when compared to their EU counterparts.
With a no-deal Brexit looking increasingly likely, tech businesses across the UK are preparing for disruption, particularly when it comes to hiring new talent from overseas and securing funding from EU schemes.
