Brexit – The Potential Impacts For Digital Economy In The UK
Blog by Richard Manso, Founder & Director of Digital Republic Recruitment
It’s a historic day in the history of the UK whether you are a ‘Remainer’ or ‘Leaver’ but what impact will this have on our digital economy? I thought through some of the key issues and scribbled my musing on paper. I would be interested to hear your ideas on how this will play out.
Job Market
The most obvious impact will be the immigration policy that the government chose to employ post-Brexit. The likely points system could go either way depending on where digital staff fall in the highly skilled list and will depend on other selection criteria. If it comes down to actual need then it could work well but if it comes down to who we have a trade deal with it could lead to shortages. What is important is that digital bigwigs like Martin Sorell, for instance, are in constant dialogue with the key government departments so that digital staffing remains in their eye line!
Policies is one thing but perception is another and it’s interesting how much applications in the medical industry have dropped from EU nationals in the last couple of years despite the fact they could still come here. Let’s hope the government does a good job of telling the world we are still an inclusive welcoming country and are open for business.
Digital Hubs
If there isn’t a coherent digital and staffing policy that works we are likely to see digital hubs move to places like Germany or Spain where labour is cheaper and easier to secure. It’s also important that there is a real investment in peripheral sectors such as broadband and transport. Germany are already putting significant investment into this area and the UK government is talking in the same terms but clearly the 5 – 10 years will tell us a lot in terms of how today’s change will shape policy and therefore the direction of the digital economy.
Workers Rights
If you work in the UK in a while collar role you probably enjoy better workers rights than our American counterparts but your executive chair will not be as comfy as your counterparts in mainland Europe. Many commentators think that these will not improve in the long term and I guess this will be music to the ears of many employers. But trust me its not good news! Talent will go to the places, companies where they enjoy the best terms even if it’s not the UK and even worse it could lead to a brain drain with our best talent going off to other countries.
Tariffs/Prices
At the moment it’s business as usual in this area but if we are unable to agree a trade deal, the grim reality could be very different. It’s clear that higher digital taxes are on the horizon for a lot of major tech companies but could this be complicated by Brexit and made worse. Let’s hope not! The one positive is that digital services to not typically require lots of hardware, logistics and supply chain so this could negate any issues here but governments starting to clamp down on.
Legislation
The EU does not appear to be a major fan of Google so they could be quietly smiling come 11 pm tonight in the UK. However, organisations who have a 90% market share in Europe, trust me, there will still be plenty for them to think about and issues such as the right to be forgotten, monopolies and general data protection ( remember, e-privacy is coming to a place near us ). There will still be plenty for any pan-European organisation to think about.
Investment
This has remained reasonably buoyant in the digital economy since 2016 largely due to the devaluation of the pound making the country an attractive marketplace for inward investment. If – and this is a big if – the pound remains relatively devalued against the dollar and euro after Brexit, this appeal will continue. It’s likely we will see the government try to encourage inward investment with incentives. There is also the possibility that we still start to generate new customers from far and wide as a result of this.
Diversity
In a strange kind of way, Brexit could be good for encouraging diverse workforces in the UK. If we encourage entry based on skill rather than proximity then we could see more talent from Africa, Australia and the US enrich our digital economy. It could also be that we would be forced to consider people for roles who might not have necessarily have been considered such as NEATs or the disabled community.
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