Until the UK formally notifies the European Union of its intention to leave by triggering what’s called “Article 50”, there can only be speculation as to what the consequences will be on the British economy, much less the tech industry.
This is the inconvenient fact that is making planning for the British exit, or Brexit, almost impossible, but it’s nonetheless important to try and anticipate what will be required because so many sectors of the UK economy is connected to the European market.
Among the many concerns to have emerged recently in the UK is one to do with startups, which some people consider to be the lifeblood of any economy; another question is to do with recruitment; and yet another is about regulations.
But those are not the only issues: the potential exodus of tech companies – both startups and established successes – from the UK to mainland Europe is also a real worry.
In a letter to City AM, published this week and signed by some 24 business leaders from the tech industry, the potential problems surrounding recruiting suitably skilled staff was raised.
“If tech communities were no longer able to recruit workers from the 27 EU countries, or from other states, many businesses would see their growth slow down,” the letter reads. “Government measures in recent years to encourage founders and entrepreneurs to invest in the UK would be wasted.”
Meanwhile, Blockchain CEO Peter Smith says he is “deeply concerned” about how Brexit will affect the UK tech industries.
Smith told Business Insider: “The UK simply doesn’t have enough talent to compete globally. It’s going to put a lot of businesses in a tough position. If you’re in London it’s because you want to compete in a global market and no single market has enough talent to compete globally on its own.”
With blockchain becoming increasingly important in the financial technology industry, this could be a more significant development than most.
Speaking to Business Cloud, Cornelia Yzer, senator for economics, technology and research for the state of Berlin, says many in the London fintech industry is “quite eager” to move to Berlin.
While some say London has a more conducive, tech-friendly environment, the eventual decision about whether or not to move abroad depends on the eventual deal reached by the UK and Prime Minister Theresa May, who is currently at her first European Council meeting in Brussels.
May and her government have steadfastly refused to divulge details of any deals they are making or are likely to make, arguing that giving away the UK’s negotiation position would undermine its ability to reach the best agreements.
But one thing the government has said is that it plans to trigger Article 50 some time in 2017. This is a year before the EU introduces the General Data Protection Regulation, which is designed to strengthen data protection rules to protect individuals.
If Britain manages to extricate itself from the EU before GDPR comes into force in 2018, then companies in the UK would not be required to abide by the new rules, although they may choose to do so.
What this all means for the future is still unclear, as is almost everything else, but the UK government minister responsible says changes will occur on an “evolutionary basis”.
Elizabeth Denham, the UK’s newly appointed information minister, says the UK should have its own data protection rules in place by the time it leaves the EU.
As quoted on Out Law, Dunham said: “We believe that future data protection legislation, post Brexit, should be developed on an evolutionary basis, to provide a degree of stability and clear regulatory messages for data controllers and the public.”
Dunham indicated that future UK law surrounding data protection would be equivalent to its UK counterparts, but whether business leaders from outside Europe or even inside will see it that way is impossible to say.
Meanwhile, the UK’s Information Commissioner’s Office says: “It is extremely likely that GDPR will be live before the UK leaves the European Union.”
Therefore, says the ICO, we may as well carry on with it. “In a global economy we need consistency of law and standards – the GDPR is a strong law, and once we are out of Europe, we will still need to be deemed adequate or essentially equivalent. For those of you who are not lawyers out there, this means there would be a legal basis for data to flow between Europe and the UK.”