London’s tech leaders are concerned about what the city’s future as an international finance hub will be in a post-Brexit world — and are officially looking for answers from Prime Minster Theresa May’s government.
Nine leading U.K.-based tech investors and business leaders wrote to May looking for guarantees that skilled labor migration would continue unabated and that market access is adequately provided for.
“The No. 1 concern for entrepreneurs post-Brexit is access to talent, in particular technical talent,” they wrote in the letter. “Quotas on specific skills could severely limit the ability of new tech companies to grow,” they said.
Signatories of the letter included Skype founder Niklas Zennström, Balderton Capital partner Bernard Liautaud, the now London-based founder of French software firm Business Objects, as well as Brent Hoberman of Founders Forum and Sonali De Rycker, partner at Accel Partners.
The tech leaders further requested that the government push for continued U.K. access to the digital single market — with frameworks for companies, labor, and bankruptcy protection that are at least comparable to the EU’s.
“London is (still) the best place in Europe to launch a global tech company,” noted Zennström. “What the UK government needs to make sure is that technology companies still have access to the best talent in the world. If (that happens) without a lot of red tape, we are going to be fine.”
But Paris and Berlin are both invested in jumping out ahead of London as the leading European city for start-up action; up-and-comers like Dublin, Amsterdam and Frankfurt are also now vying to what they perceive will be a vacuum left by the Brexit. And in fintech, an area where London has been a leader, the action has slowed since the June vote to leave the EU — and Germany firms seem to already be inheriting some of that loss. The German fintech scene managed to grab up 35 percent more venture capital funding than Britain in the last two quarters, according to a report by KMPG and CBInsights.
The British government has put forward a number of initiatives to support the tech sector, such as providing funding for more fiber-optic broadband and additional investment from British Business Bank to replace potentially lost EU funding. But the government has been mostly silent on the skilled labor migration issue, which has made the UK’s tech leaders very nervous.
“I think we are in ‘deer-in-the-headlights’ mode, candidly. We do not have a clue what’s happening,” said Accel’s De Rycker, noting that there are real doubts as to whether or not London has enough internal talent to support firms working to expand quickly as global businesses.
“If you want to add 100 engineers over the next two years, we are pausing on that,” she said of her company’s recent investment decisions. “(UK tech firms) are thinking, ‘Do I need to get a second center of gravity (outside Britain)?'”