How exactly does the UK's exit from the EU impact the technology world?

tech2 News StaffJun 24, 2016 10:52:28 IST

A survey of UK workers showed that more than 65 percent think Brexit will have a negative impact on the global tech industry, according to a report in CNET. The workers surveyed feel that UK belonging to EU allows for better mobility of talent, and a Brexit would leave London as a less attractive technology hub. A Brexit would also dry up sources of investments for startups, and the country's 18 unicorns.

Tech City News concurs, that talent and funding would be most affected by Brexit. Additional time and resources will have to be spent by companies just to adjust to the changes that Brexit would cause. The positive side is that an Brexit would allow UK companies to renegotiate international contracts, and free up homebrewn technology from being compliant with at times expensive EU regulations.

The Brexit would send ripples across the pond as well. Microsoft is one of the few major tech companies to take a side, and has urged for the UK to remain a part of EU in an open letter, "We appreciate and respect that there are a range of reasons that motivate people on both sides of the debate, but as a business that is very committed to this country, our view is that the UK should remain in the EU". The Guardian has made that letter available online.

The major problem for other companies operating in the EU, are the EU tech regulations. UK is among the countries that prefer lighter regulations, as against France and Germany which intend to impose more strict regulations on technology providers. A Brexit could mean that harsher regulations are imposed on tech companies, however, it could also bean that the tech companies face easier regulations in the UK. Two examples are lesser taxes, and easier rules on privacy, reports the Wall Street Journal.

Closer back home, the impact would be felt in the way of increased demand of Indian tech services, according to Live Mint. Brexit, which will only completely happen by 2019, will hinder flow of labour in and out of UK. However, this does not restrict the work itself being outsourced, and as UK is one of India's bigger customers for such services, Indian tech service companies stand to benefit.