Technology Investments and Brexit: Still No Clear Answers

tech sector investors

Will Brexit hurt or harm technology investment in the UK? No one really knows. One technology strategist might live in fear of the eventual separation while another fully embraces it. Still other strategists are taking more of a wait-and-see approach. As a technology strategist myself, I can say that there are still no clear answers even with Prime Minister Theresa May officially invoking Article 50.

So what are tech investors to do? The most important thing right now is to look at both short- and long-term goals. Despite Article 50 having been invoked, we are still at least a couple of years away from an official separation. During that time, representatives from both the UK and EU will be going through intense negotiations.

Between now and the official separation, a lot will happen economically and technologically. This suggests that short-term investments that appear strong are likely to remain strong for the next couple of years. Long-term investments may or may not come out strong, depending on how negotiations go.

So Far, so Good

If there's any good news relating to the tech sector and Brexit – and there is – it is the fact that technology investments have not slowed down as a result of the vote. In fact, we remain the European leader in attracting new investments. We've attracted some £28 billion just since 2011, compared to £11 billion for France and £9 billion for Germany.

Even more encouraging is the fact that growth in the technology sector is twice that of the economy as a whole. The amount the tech sector is contributing to our economy is up 30% in the last five years.

Mrs May has also said that the technology sector will remain a priority during negotiations. The May government has every intention of making sure we remain the European leader as well as a global leader in technology.

Not Everyone Confident

Despite the good news, not everyone is confident in the future of the UK technology sector. Broadband providers are a good example. According to Global Telecoms Business (GTB), the broadband sector is warning that Brexit may hurt investment at a time when they most need it. Broadband providers fear that just as they're getting ready to build the next generation of mobile infrastructure, they may not have the tech investors to make it a reality should Brexit negotiations not go so well.

GTB reports that the EU considers our telecom industry the largest in the economic block, accounting for just under 20% of the total EU28 economy. The question is, will they attempt to punish us for leaving the EU, or will they seek to preserve the broadband sector by allowing us to compete in Europe without barriers?

Any technology strategist who claims to have all the answers now doesn't really have a grasp of what's happening. We have to keep an eye on short-term investments while waiting for negotiations to give us a better picture of the long-term.

Sources:

1.The Telegraph – http://www.telegraph.co.uk/technology/2017/03/22/tech-sector-growing-faster-uk-economy-72pc-investment-outside/

2.GTB – https://www.globaltelecomsbusiness.com/article/b12k3stsj597y6/brexit-could-harm-uk-tech-investment

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Author: Chris Galley

Chris is a highly qualified CTO with broad technology background and multi-sector experience. He works as a CTO to businesses on a part time basis. He delivers strategy at corporate and product levels; including innovation, technical due diligence and post-acquisition ...


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