How Britain’s technology industry shrugged off Brexit fears


How Britain's technology industry shrugged off Brexit fears

Just days after the result of the EU referendum was announced, a German political party hired a van for an unusual publicity stunt.

It drove around some of London’s most fashionable neighbourhoods for 12 hours with a bold message for British technology start-ups: “Keep calm and move to Berlin”.

It was the opening salvo of an extended campaign by Germany and France to poach nervous start-ups which were worried that Brexit would cripple the technology industry just as it had begun to flourish.

One poll conducted before the 2016 referendum found that 87pc of people who work in technology planned to vote to Remain. And on the day the result of the vote was declared, one serial investor wrote in a text message “Whole thing is s***. F*** me.”

Nearly four years later and with the UK poised to leave the EU within weeks, new data show that investment into UK technology start-ups is stronger than ever, with growth in investment in 2019 outpacing the US and China.

Research from Government-backed Tech Nation and Dealroom shows that British technology start-ups raised a total of $13.2bn (£10.1bn) in 2019, up 44pc on 2018. 

Total investment in the US and China remains significantly higher, but investment levels in those countries dropped 20pc and 65pc respectively last year.

Eric Schmidt, who served as chief executive and chairman of Google from 2001 to 2017, summed up the resilient atmosphere well. Speaking at an event organised by Mckinsey in London in November, he said: “Britain is a particularly good platform to do global things. There’s enough unicorns here [startups worth more than $1bn] that the system will generate enough learning to continue to generate more capital. Markets are accessible… You have a real asset here. Don’t screw it up.”

The trend of the UK outpacing the US in start-up investment growth is also shown in new data from PitchBook, which shows investment in the US dropping from $140.2bn in 2018 to $136.5bn last year, while investment in the UK continues to rise.

So what happened to the predicted exodus of British technology start-ups? 

Saul Klein, a partner at investment firm LocalGlobe and a co-founder of Lovefilm, sees the rise of technology in the UK as akin to an unstoppable force.

“The secular wave of technology is so huge that it’s beyond Brexit,” he says. “If you look at the numbers, since we knew that the country had voted to leave in 2016, every year since then has been a record: More money has gone into the sector, more jobs have been created.”



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