Blog: The Brexit-fast Panel Debate.

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The Business Brexit-fast Panel Debate – July 28th 2016.

The first Like Minds breakfast event since June’s EU Referendum featured a panel discussion on the potential impact to the UK tech sector of operating outside the European single market.

We were back in the mezzanine lounge at 12 Hay Hill and thirty minutes of networking over some healthy breakfast options ensured a spirited audience settled into their seats for the event itself.

Minter Dial founder of the Myndset well-known European entrepreneur and regular Like Minds contributor moderated.

The questions and comments proved to be an excellent stimulus for the discussion that ensued. The panel itself consisted of:

Janet Coyle who is Principal Adviser for Growth at London & Partners, who supports high growth and scale-up companies as they make the move to international markets, as well as providing connections to Silicon Valley investment.

Bindi Karia who is a start-up expert and advisor. She sits on the board of TLA, has worked at Silicon Valley Bank and Microsoft Ventures and now works closely with the EU startup commission arranging funding for outstanding tech opportunities in the UK.

Russ Shaw who is the founder TLA, which is a network of private sector business leaders promoting London’s tech sector.

After the Brexit vote, the focus is now on how to lessen its impact on the international staff vital for tech growth in London and across the UK. And with the introductions over, Minter got things rolling. Here’s a flavour of the discussion that ensued.

The emphasis on ‘business as usual’, especially, reinforced the sense that London – and especially the tech sector thriving within London – was very much an insulated bubble that was in danger of becoming increasingly separated from the aspirations and concerns of much of the rest of the country.

Minter Dial: The stock market is exactly where it was 360 days ago. Has it all been much ado about nothing? Some sectors may be down — real estate — but others are up — tech. Is the answer to managing the response to Brexit really about controlling the narrative?

Janet Coyle: It’s almost impossible to control the press but we all have a huge role to play. London & Partners have been using social media to promote the #Londonisopen tag.

Bindi Karia: We’re still right in the middle of it. There is a lot of emotion and what we need is to deal with cold hard facts.

Russ Shaw: It’s very much a longer term play and, although the narrative is important, we have to watch carefully the difference between FTSE100 companies — that tend to trade globally and in US$ — and FTSE250 companies, for instance. The smaller companies are more affected by local conditions. It’s key that we move as quickly as possible to a period of stability and certainty.

MD: What can we look to for signs of the way things will go?

JC: The new London mayor and his team are already providing a strong message in support of diversity. It’s important to keep reiterating that the London ecosystem is great for tech.

BK: Looking around, it is plain to see widespread resignation and acceptance that the vote has happened and we have to get on with things. It’s a typical British response; we’ve ‘made our bed’. On the flip side, there is a lot of confusion and there is no doubt that the vote has fractured the country in some way.

RS: Keeping calm is good but from the early calm and acceptance has come a desire to be more proactive: the tech community has come together as never before. We’re trying to drive the agenda forward. There’s a need to prepare for any changes to immigration rules — new visa regulations, for instance — but also to create a national digital skills training scheme to develop talent here, especially in areas hit by manufacturing decline.

BK: It’s also important to look at the numbers. The EU provided £3 billion of funding into UK business. All the recent talk of £200 million since the Brexit vote is simply spin: those contracts will have been signed well before June 23rd.

JC: Yes. Funding takes about 9 or 10 months to negotiate. We landed a contract after much negotiation and it was signed on June 23rd. Funding was cut off to the UK on the 24th. RS: It underlines the importance of the private sector now. We need to step in to replace EU funding.

BK: Businesses will also need to work harder to find angels and seed investors. Look further afield — to China, say. It is positive that the UK has an unrivalled open mentality. RS: The EIS/SEIS – tax breaks for investing in small businesses – was the best thing the coalition government did for the tech sector.

It is, perhaps, not so much the way the tech sector copes with rule change and market opportunities or limitations that will dictate its continued success, but how well it can learn to look outside its traditional boundaries and seek to ameliorate – or at least acknowledge – the issues experienced by much of the population who are not reaping the benefits of a thriving tech sector within London.

Minter then opened the discussion to the audience to ask questions of the panel.

Q: From a closed market of 500m we now have opportunities to reach a much wider market. India. China. The provision for export tax credits could help generate massive business.

RS: The digital single market across Europe made it very easy – in terms of everything from copyright and IP and licenses – to grow quickly in 27 countries. This is harder to replicate on a global scale. India yes. And the largest source of foreign students to the UK now is from China. We need to extend visas to allow students to stay beyond their course if they want to start companies. These will then link back to home markets.

Q: What are the signals to look for that will tell us the tech sector is healthy or going belly-up?

BK: The levels of limited partnership investment into UK startups as opposed to mainland startups.

RS: We can look at immigration numbers and how those break down. We’ve just sent a message to the EU that says, “don’t come here”. The uptake of skilled migrant visas will soon tell us if we are we able to continue to fill the tech skills pipeline? However you cut it, we have a shortage of talent.

JC: I don’t think limits on talented migrants will happen. London is full of international talent. What we need to watch over the next 1 to 2 years is the movement of tech companies to other EU cities.

BK: We also need to track companies that may move by their growth stage. In other words, are they startups or are they further along the growth curve?

Q: What are the prospects for London in the short term?

JC: EU companies want access to London and the UK. We have unrivalled benefits: our dense population and high digital take-up; links with the universities; investment and financial services on tap; and a time zone that is perfect for global business.

RS: UK labour laws are more straightforward than many across the EU. Firing/hiring is quick and easy. Dublin, Berlin, and Paris have their own sets of unique problems. One city to watch may be Amsterdam, which has echoes of the UK’s approach.

BK: A strategy moving forward for companies in London and UK will be simply to put heads down and find customers. The best entrepreneurs don’t make excuses.

Q: Is there any chance that Theresa May will trigger a new vote?

RS: It’s possible but there’s a strong voice in the country that still wants to leave. May herself has said that Brexit means Brexit. We have to assume it will happen.

BK: I think that, whatever happens, the UK will end up in a better situation.

RS: Yes. We’ll get through it and there are wonderful opportunities ahead. London will be continue to be a world-leading tech hub. It’s important topPlan through the uncertainty. There is no doubt that the take-away from the discussion was a sense of optimism for the tech sector, no matter what the effects of Brexit might bring. As with most sectors, it will be uncertainty over the long term that will cause harm.

However, in the networking afterwards, I spoke with a few people who were worried that some of the assumptions made during the discussion indicated that the reasons behind the ‘leave’ vote were being ignored.

The emphasis on ‘business as usual’, especially, reinforced the sense that London – and especially the tech sector thriving within London – was very much an insulated bubble that was in danger of becoming increasingly separated from the aspirations and concerns of much of the rest of the country.

It is, perhaps, not so much the way the tech sector copes with rule change and market opportunities or limitations that will dictate its continued success, but how well it can learn to look outside its traditional boundaries and seek to ameliorate – or at least acknowledge – the issues experienced by much of the population who are not reaping the benefits of a thriving tech sector within London.

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