ANALYSIS: Technology firms lament political uncertainty but tell Silicon that its Brexit that still really matters
It wasn’t supposed to be this way. Prime Minister Theresa May was supposed to be celebrating an increased Conservative majority and a strong personal mandate to negotiate the best possible Brexit deal for Britain.
But as the clock struck 10 on 8 June, the exit polls suggested that a hung parliament was in the offing. Her campaign of ‘strong and stable leadership’ had come undone against a Labour party surfing on a wave of momentum and youth popularity.
As millions of people awoke to the results on the following morning, their thoughts were almost certainly not about the future of the UK technology sector. But now that the dust has settled somewhat, Silicon will do just that.
To be fair, we should have seen it coming. Our poll showed 43 percent of readers were backing the Labour party, ahead of the Conservatives on 29 percent, the Liberal Democrats on 14.8 percent and the SNP 5.2 percent. This is in stark contrast to 2015 when the Conservatives won a similar poll.
Normally, you’d expect the sector to back the Tories. After all, pro-business policies are important for the people that buy and sell technology and they want stability. But Brexit has put that all in doubt.
The Conservatives have placed technology at the centre of the post-Brexit economy and nominated as one of the five main challenges it wanted to address in the next Parliament. The Liberal Democrats were the only other party to make a point of tech in their manifesto, with Labour only mentioning it in passing and the Greens and SNP almost ignoring it. UKIP actually did.
But large technology firms were all against the UK leaving the EU and our pre-referendum poll showed that just a third of our readers believed the British tech industry would be better off if the UK was a member.
There are concerns about access to funding and talent, while the UK’s burgeoning fintech sector’s future hinges on the outcome of Brexit negotiations.
What Brexit means for tech is still up in the air. KPMG says the UK and London will continue to attract talent and funding and has praised the government’s promise of funding and support, while a separate report suggests 70 percent of tech workers are considering leaving the UK.
Ignoring the reasons why the wider public didn’t back the Tories, it’s possible to see why our readers didn’t. But the outcome of the vote is a less certain political environment for our tech firms and their customers.
“For startups this is a mess,” Rachel Carrell, CEO of Korukids told Silicon. “Of course the main thing is that we don’t know what’s going to happen. But uncertainty for a few days or weeks doesn’t particularly matter when you’re building a tech company. The longer term stuff is far more important.”
So what about the government’s plans for technology? Until the ink dries on the Queen’s Speech we won’t really know. But it’s probable the planned ‘loose’ coalition with the DUP will have little to no serious impact.
A read of the DUP’s manifesto offers nothing about technology (although it does want to abolish the BBC Licence fee) but it is believed most of its demands will be for additional money for Northern Ireland.
Experts suggest there will be little to no disruption for government technology programmes.
“The government’s digital strategy is established and mainly uncontroversial,” said Jessica Figueras, chief analyst at GlobalData Public Sector.
“Government will continue to invest in digitisation, legacy renewal, cyber security, data management and analytics, amongst other things. And there’s increased appetite across the political spectrum for more investment in R&D, digital skills and communications infrastructure. That’s good for the tech industry – and the country as a whole, most importantly.”