We outline some of the key arguments in the tech sector for and against a Brexit
Tomorrow people go to the polls to vote on two very different visions of the UK’s future – one inside the European Union and one outside it.
But which decision will benefit companies in the technology sector most? A survey conducted by industry trade body techUK with 277 of its members found that 70 per cent are in favour of remaining in the EU, saying they could better negotiate free trade deals.
Another study, by Juniper Research, found that 65 per cent of respondents believed a Brexit would harm the tech sector, citing less EU funding and London becoming less attractive as a tech hub.
However, most of the 35 per cent of respondents voting leave claimed the UK’s tech sector is largely unaffected by geographic boundaries, and said leaving the EU would free up business from red tape.
Here we outline the EU referendum’s pros and cons for people in the technology industry.
Cyber attacks against the UK outside the EU
The UK would be more vulnerable to cybersecurity threats outside the EU, 38 per cent of 300 IT security workers believe, according to an AlienVault study.
The security firm’s expert, Javvad Malik, said: “With the EU referendum just days away, the IT security industry seems to be siding with the ‘remain’ camp. But what’s more, a significant proportion of those surveyed believe that being part of the EU actually benefits them and their work.
“Cyber attackers pay no attention to geographical boundaries, transcending borders and jurisdictions to maximize malicious effect. The truth is that we can provide a stronger and more robust defense against emerging threats by working together and sharing information.”
Vital for growth
Microsoft, Accenture, Hitachi, IBM UK and many other tech companies believe staying inside the EU will ensure the industry continues to grow.
In a letter published by the Times, they wrote: “We believe staying in the EU is the best choice for the UK economy. According to techUK members, most of whom are small businesses, being part of the EU makes it easier for them to trade and do business across Europe. It makes the UK more attractive to international investment and makes Britain more globally competitive. A decision to exit the EU would leave tech firms and their customers, facing significant and prolonged uncertainty and leave the UK side-lined on key decisions that will shape a digital market of 500 million consumers.”
Staying inside the EU also gives the UK access to the digital single market, which contains 500 million people – leaving it could see UK companies pay tariffs to trade and be forced to negotiate their own free trade deals with other countries.
Data location disaster
Larry Augustin, CEO of SugarCRM, believes a vote to leave could force companies storing their data in the EU to move it.
“Brexit potentially creates a new UK data regime where companies need to manage customer data crossing the new digital border between the UK and the rest of the world,” he claimed. “Storing EU customer data in the UK no longer satisfies EU data laws. Likewise, UK customer data stored in EU countries would need to comply with separate UK data laws. Changing processes and systems to comply with the new legal landscape around customer data will take both time and money.”
No more red tape
More than one in three UK respondents told Juniper Research a Brexit would either have a positive effect on Britain or no effect at all.
Around 85 per cent of those voting leave claimed Brexit would free the UK from EU red tape that has slowed the industry’s pace of innovation, and 46 per cent said new trade deals with other countries would compensate for the loss of EU trade privileges.
These would lead to the UK developing a less restrictive immigration policy for non-EU workers, 65 per cent of pro-Leave respondents said, while 59 per cent argued there would be more opportunity to sell products outside the EU.
The tech industry would be fine anyway
Nearly one in five UK respondents to Juniper’s survey believe a Brexit would have little or no impact on the UK’s technology industry.
Most pointed to the global nature of the technology market, while 63 per cent said the UK would become an attractive tech hub “for its skills, innovation and an attractive business climate”.However, just 16 per cent believe trade deals that benefit the tech industry inside the EU could be replicated if the UK votes to leave.