Brexit – Where Will It Take UK Digital?

Brexit – Where Will It Take UK Digital?

Whether you’re happy about the Brexit decision or not, it’s important to appreciate the ramifications for industry. The digital sector is a major and growing player in the UK economy. The highlights of this budding sector before today’s result were:

  • 382,000 people are employed in the IT sector in London. (techUK Manifesto)
  • This sector has been responsible for 30% of the capital’s job growth since 2009. (South Mountain Economics)
  • There are 1.56m recognised digital tech economy jobs in the UK, alongside 58,000 digital tech businesses. (Tech City)
  • Tech jobs grew 11.2% between 2011 and 2014; the rest of the UK workforce grew by just 4%. (Tech City



How could Brexit negatively affect these trends?

The techUK manifesto also provides this handy graphic about the challenges the industry currently faces. The chart demonstrates how a shortage of talent and a need for software developers is the biggest problem. Brexit will only cause more difficulty for companies to acquire the skilled staff they need (which will also hurt Britain’s reputation as a tech hub).

A major issue is the Tier 2 visa cap (Tier 2 is for skilled jobs coming from outside the European Economic Area). This cap this was previously limiting talent searches to within the EU. Now even EU members will need these Visas. This is without considering the axed post-study work visas abolished in 2012.

There are further considerations with regards to trade, investment, regulation and infrastructure. One of particular interest to those in the web industry is the cyber security implications. In May 2016 the EU signed off on a new data protection framework to replace the 1995 Data Protection Directive. This new framework, GDPR (General Data Protection Regulation), will apply to all member states as of the 25th May 2018. The NIS Directive (Network and Information Security) is expected to follow in the footsteps of GDPR and the e-Privacy Directive (April 2016) in August this year.

As the UK already has its own Data Protection laws, there is uncertainty as to how these would affect the UK after the Brexit is complete. It’s dependent upon whether or not these laws are in effect prior to the successful exit as to whether Britain would be forced to adopt them.

Although the reality is that Brexit will have little impact upon Britain’s choice to follow these rules or not, there is an extraterritorial effect to the GDPR meaning businesses in the EU that process personal data AND any organisation established outside the EU which offer goods or services in the EU or which monitor the behaviour of EU data subjects have to abide by these rules.

Think that your company can get away with not following these rules? Think again. UK businesses may be subject to fines of up to 4% of their annual global turnover for failing to comply.

The exit is two years away and things could end in the fairytale way we’re now hoping for. This article doesn’t discuss the positivity that could happen as a result of the change because my attitude here is prepare for the worst and hope for the best. Keep these factors in mind. Look after your staff, look at bringing in young talent and nurturing them into the employees you will need and most of all, make sure you give thought to EU laws which will affect you, whether the UK is in or out of the EU!

Stephen Collins