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politicalbetting.com » Blog Archive » Guest slot: The impact of leaving the EU on London’s techno
politicalbetting.com » Blog Archive » Guest slot: The impact of leaving the EU on London’s technology start up scene
I have never been political. I’ve never joined any party, and my voting record is patchy. What I do is start technology businesses, and I’m on my third right now. Knowing rcs1000 (he’s an investor in my firm), I asked if I could write a piece for politicalbetting about the impact of leaving the EU on London’s technology start up scene.
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At least that's my optimistic vision for leave, which admittedly is quite similar to Adam Smith Institute's 'liberal case for leave'.
I'd always had the impression the Silicon roundabout thing was largely just UK politician hype-based, so good to hear from someone who knows that it is actually successful.
I'm surprised office space in London is described as cheap though!
Furthermore 90% of our University trainees in this sector leave the UK, because they cannot get employment thanks to the EU restrictions.
The EU has NEVER been a good opportunity for anyone apart from those inside the (expensive and undemocratic) club.
Many of my co-workers wouldn't have bothered with the hassle of getting a visa, no matter how easy it was to obtain. And experience from the US and the debacle of H1-B visas shows that any sort of similar quota-limited system is open to abuse. With their heavily oversubscribed system, large offshore tech companies send thousands of applications - of which perhaps 1/4 to 1/3 will be pulled from the pool. They don't really care which of their staff gets a visa, so long as 1000 or 2000 or 10000 of them do. On the other hand, small companies (and even larger ones, like Facebook and Google) only have that same 1/3-1/4 chance of getting a visa for the more highly skilled employee they actually want.
The UK tech sector - in particular Fintech, but also more generally - is just beginning to show the same levels of investment and interest as the US one. Now isn't the time to stifle it.
New university entrants will soon be possible - hopefully soon to be followed by a mechanism for institution and course failure/destruction.
These both go a significant way to solving any skill shortages, with immigration as short-term stop-gap to fill any slack. Don't favour the benevolent dictator (EDIT: intentionally hyperbolic) or unaccountable EU Commission - fight your corner in the post-brexit democratic arena.
Next.
Murray hits the spot.
Companies get a visa allocation and can use it when they want to hire?
Or people entering the UK have to show they have desired tech skills in the right area- but then they can come without a job and look?
It does seem to me though that the big advantages that London has is the depth of its funding markets and the critical mass of people. The critical mass of people is what is at risk and it is a vivid demonstration of the upside of an open immigration policy. But there are downsides. Only a tiny fraction of the flow of people are computer scientists.
Eh?
http://www.latimes.com/local/lanow/la-me-ln-gay-pride-la-weapons-20160612-snap-story.html
Incidentally, Silicon Valley (as an example highlighted in the article) is fully subject to US immigration controls, and is the most successful tech hub in the world.
Total failure to think outside the box.
This isn't difficult.
Silicon Valley has access to the entire US job market and a population of c.300m people, i.e. roughly the size of the EU.
The problem is that few politicians understand the needs of the IT industry, but they do understand Sun headlines.
http://www.electograph.com/2016/06/espana-junio-2016-sondeo-gesop.html?m=1
It's a disgusting tweet.
We are a specialist company advising the property industry, and it's very hard to find people with the right blend of skills and experience, especially for our offices outside London.
We've employed a number of excellent people from the EU and the process has been no different from taking on a UK citizen. More recently we've taken on a non-EU worker and the bureaucracy we've had to wade through has been unbelievable, all of it coming from the UK Government of course.
If we leave I fear (yes, that word) the pressure to reduce immigration to the tens of thousands will mean that this rigmarole will be forced on any employer who wants to take on any foreign worker, no matter how much particular skill sets are given 'special' status.
Now, maybe there is something wrong about the start-up culture. In my limited experience, working death march hours is not beneficial for more than a few days at a time, as people become tired (and sometimes half-drunk).
Education? It is a decade since I was involved in recruiting programmers but back then we often found new computer science (CS) graduates could not program even in languages they believed they knew. I discussed this with an Oxbridge CS professor who pointed out that during the 1980s, a CS course was mainly conducted in C and Unix: C was used in the OS class, the algorithms module, graphics, and so on and so forth, with other languages used sparingly if at all: perhaps lisp for AI. Now with the expansion of the field, there is a danger students don't so much program as fill in boiler plate in an IDE while learning to write "hello, world" in 37 different languages.
There is little emphasis on training. Easier to grab a plug-and-play programmer from abroad. Lack of investment in training is not, of course, confined to the tech sector.
So yes, OP has identified a real problem but the EU does not seem especially relevant one way or the other.
I do find it distasteful to see Mrs Cameron wheeling out her poor children to provide their considered opinions.
Its all looking a bit desperate isnt it?
Not that it matters too much. Inside the EZ it almost irrelevant what colour of government people choose to elect. They have very little discretion about their big picture fiscal stance anyway and absolutely none about their monetary policy.
The EZ is the future of the EU and it is undemocratic.
But the trouble with that I would guess is that it is a lot of hassle for the company...
I can imagine this is an even bigger problem in what sound like goldfish bowl conditions near "Silicon roundabout" or w/e.
But it highlights the more nuanced advantages of being in the community of the EU vs the equally nuanced ('cos we'd manage somehow outside) disadvantages of being outside.
The point being, why would you vote to give yourself a disadvantage in business?
(Ans will there come from those who have no idea whether and when the EU affects our sovereignty: "because our sovereignty is being violated")
http://www.citb.co.uk/
It is the same sort of thing with doctors, nurses and curry chefs -- easier and cheaper to have them trained abroad than here. With Royal Ascot starting tomorrow, we are reminded there has been a large influx of stable staff from the subcontinent (not in the EU).
"The London tech start-up scene is probably – outside of the Valley – the best place to get people to work 16 hours a day in the world." I read this and thought how many EU Laws are you breaking?
www.pollstation.uk/eu-referendum/poll/
The problem is that there are also a lot of downsides to an open ended immigration system as well. The pressure on housing, public services and congestion. The disincentive towards training when you can pick up relevantly qualified people off a never ending shelf. The unfairness for those victims of our educational failures who never get a chance. Like everything in life it is a trade off.
Leaving the EU doesn't make it easier to deal with the rest of the world. You don't get to do more with the test of the world just because you do less with Europe. It makes it more difficult in fact because everything is linked. If you are a globalist, Remain is your obvious choice. Equally anti-globalisation, a big trend at the moment, informs the Leave vote.
People aren't worried about immigration because 100k or 300k people turn up.
They're worried because of the *outcome* - the impact on their lives.
A well designed visa system that allowed high skilled techies in wouldn't worry the average joe.
I would expect it to become a bit easier to hire from outside the EU, mostly because I don't expect it to become as hard to hire from the EU as it currently is to hire from outside.
http://www.migrationobservatory.ox.ac.uk/briefings/characteristics-and-outcomes-migrants-uk-labour-market
We already get immigrants of high calibre. Leavers really just want to reduce their number drastically, regardless of the impact on the economy.
Immigration control is not incompatible with a dynamic and entrepreneurial economy and to claim it is is a totally false choice.
You should also consider the dead hand of EU regulation on future start-ups as well, with their caps, limits and quotas.
Brexit sets us free of all that.
It is not hard to imagine the company moving its HQ to Paris, Berlin or somewhere else on the Continent if Leave wins and visas come into operation. Funnily enough I understand most of the 250 British staff will vote remain. Turkeys don't vote for Christmas.
As someone newly retired staying or leaving will have little personal impact on me, but I will vote Remain to help protect my family which seems as good a reason as any other. The lies and scares on both sides of the argument have been despicable. As most are coming from Conservatives on either side, it is a very depressing indictment of our government.
But TBH, the claim that immigration will be substantially reduced following a Leave win is also untrue. You don't tell that to somebody who is telling you that immigration is the reason that he is voting out; you just listen and nod.
The only genuine reason for voting remain is if you believe in a united states of Europe. If that is your view, Brexit has nothing to offer. But to vote remain because it will become too difficult to recruit able European techies following Brexit is 'soft'.
I work in the service sector too and everyone is worried. Advertising in the UK is second only to the US and in terms of creativity probably above them. British agencies have a presence in nearly every country in the world.
What this vote is telling them -particularly as it's based on a quasi racist campaign-is very worrying indeed
http://www.telegraph.co.uk/news/2016/06/12/when-it-comes-to-the-single-market-you-dont-have-to-be-in-it-to/
@tlg88
>Interesting thread - but this sounds more like a case for reform of our higher education. Also, say one of these startups produces the next Google, what good is it to the UK? I don't want to sound like a chippy lefty, but how much tax do tech companies like Google pay in tax here or anywhere else?
Why wouldn't they pay significant taxes?
ARM, for example, paid £74m of "income taxes" on £450m of "cash generated" in the last calendar year. Plus payroll taxes plus CGT by shareholders etc.
Don't forget that the demented warblings of the "Fair Tax" trolls are 99% hot air and manufactured outrage.
But how do we address the need for companies to be competitive while the system is being mended (assuming it is). Should they be required to provide training to compensate for an inadequate education system? Or should they accept a lower level of employee because it's not fair to Brits who have been failed by the system?
Yet again, the EU is a symptom not a cause.
I'm a computer science graduate and have gone through two immigration systems including the US H1B. Neither were that complex.
But the US has a population of over 350 million. Its talent pool is bigger to start with. We have that equivalence with EU membership. We lose it once we go and start requiring visas.
In an industry I know a little about, football, the work permit rules for non-EU players have just been tightened up to give British players a chance because all EU players have to be treated as if they were British.
What we need to look at is having different category visas, it would be like the US O1 visa and no restrictions ir caps placed on their numbers, then the H1 visa with a very high cap of 400k (essentially unlimited) and restrict unskilled migration to very small numbers. I would also allow spouses to work unlike the US. I would even remove the "sponsorship" element so that people who are here that lose theor jobs can stay to find a new one until their visa expires rather than beinf packed off home.
Damm those plebs and their popullist ideas.
I think one of the most ludicrous statements I have seen on here is the view that you would have to prove that you could write in Linux to an immigration officer. I have never put more than a CV forward and never, not ever once be questioned by any immigration service or officer anywhere in the world about skill ability. I'm afraid that view just shows a complete total ignorance of a balanced immigration process and to be honest if you thought you would ever have to do that then you just ain't worth employing.
For the record I have worked in around 100 countries worldwide and my passports ( I have two authorised passports to allow occasion applications when I may be travelling elsewhere) are stuffed with visas none of which were that arduous to get. Quite often a third party service was used with little or no hassle to me or the companies involved. In affect there is an industry that does all of this for you. Just check out Google and type visa required for a specific country and see results.
Fantasy stuff from the isolationists.
They realise that take away immigration (they profess and I believe them not to worry about it), and all you are left with is some nebulous sovereignty guff which they are hard-pressed to put their finger on and which, in any case, does not compensate for the very real diminution in our trading environment and more general risks to our economy that a Leave vote entails.
The simple fact is that if we want to leave the EU and restrict free movement there will be prices to pay. This will be one of them. Hopefully London will remain competitive, but the nature of the tech scene will change, and we will create opportunities for other European centres.
And history has repeatedly shown us that the populist answer is rarely the right one: a mistake that we may be about to make once again.
The solution is to make London and the south east bearable and we could start off by improving the infrastructure and public services. Again, not the EU's fault. Don't forget all the non-EU, or Commonwealth immigrants that PB Leavers are so keen to accept instead of the Romanians and Bulgarians we get now.
The Internet has reduced the friction holding back trade in ideas, commodities and people.
More controls on any of those things will crank it up again, to the impoverishment of us all.