Seven out of ten tech business founders and investors intend to vote Remain in June’s referendum. Some of the UK’s fastest growing tech companies explain why they back the Remain campaign
With the EU Referendum vote just under two months away, we’ve been collecting the opinions of tech businesses and investors from around the UK. Seven out of 10 tech founders and investors surveyed by Tech City UK said that they wanted the UK to remain within the EU.
The UK has established itself as the leading digital nation in Europe and we think that our startup scene has the edge on other tech hubs around the world. But a clear majority of the founders and investors we surveyed are concerned that the UK’s advantage would be lost if the British people voted to leave the EU.
One of the main reasons founders and investors gave for wanting to stay in the EU was the loss of easy access to the EU single market of 500 million consumers, which would make it harder for new and growing businesses to operate in Europe. The EU is the UK’s biggest trading partner and EU countries buy 44% of everything we sell abroad, so having guaranteed access to this market is clearly important to those working and investing in the digital economy.
A second factor is the ease with which digital businesses can recruit tech talent from European member nations. With digital skills shortages in many key areas, growing UK businesses already rely on being able to attract the brightest and best across Europe.
Finally, tech founders and investors worry that the UK’s attractiveness as a location for international tech companies would lessen if we withdrew from the EU. Big commitments to the UK – such as Google’s Kings Cross campus – may not materialise in future, if London is no longer seen as a gateway to the EU market.
Eileen Burbidge, Partner at Passion Capital and Chair of Tech City UK, commented: “London is the biggest tech centre in Europe and attracts the brightest and best talent. Founders and investors fear that advantage would be lost if the UK leaves the EU. We don’t really know what would happen and that uncertainty is dangerous. Would companies move their headquarters? Would there be a flight of capital from across the UK? The chances are that it would increase everyone’s costs and lead to slower growth in the overall UK economy from London and the regions alike, potentially for years to come.”
Gerard Grech, CEO of Tech City UK, says: “The UK is seen as a stepping stone into Europe for many digital companies. Founders want access to the market opportunities in Europe as well as to be able to recruit easily from the pool of talent in the 28 membership countries.”
“The ability to attract international companies and investors to Britain has helped to position London and the UK at the centre of Europe’s digital economy. Many tech founders and investors are wary that London and the UK’s advantage could be eroded in the event of a vote to leave the EU.”
Some of the UK’s most ambitious tech founders recently joined Tech City UK’s newly launched Upscale programme, which helps Series A tech companies scale to the next level with expert advice from ‘scale coaches’ – entrepreneurs who have had first-hand experience of scaling global tech businesses in the past.
These Upscale founders aspire to compete against the best in the world and naturally want to be in the biggest market possible. Their views are typical of founders and investors who are against a Brexit.
Tom Adeyoola, CEO and Co-Founder, Metail, says: “The UK on its own is too small a market for a tech business to compete against the best, so we need to look outwards. Even without that need, our ambition as a nation has always been for global progress and growth. We should be increasingly outward looking in our focus. Now is not the time to start putting on the brakes, and making trade harder by leaving Europe – not to mention the threat of devaluing the pound.” Tom has also written an online letter to the Mayor of London on the topic.
Aron Gelbard, CEO and Co-Founder, Bloom & Wild, says: “Overall, like many entrepreneurs, I’m in favour of the UK staying in the EU. The UK domestic market is limited in size compared to the US and China, and this puts a limit on the scale you can reach when building a business in the UK. Easier access to European markets increases the opportunity for UK companies to scale and therefore compete on a global level with our counterparts based in e.g. the US.”
Joachim Horn, CEO & Founder, SAM Labs, comments: “A large portion of our sales are thanks to the united decision by national governments to put 21st century and digital skills at the forefront of European education. Leaving the EU could undo the united push to educate and equip our future digital leaders with the right tools to change the world for the better.”
Thomas Gatten, CEO and Co-Founder, GrowthIntel, says: “The world runs on trade. Everything, from the computer you’re reading this on, to the building you’re in, was made by companies collaborating with one another. Leaving the EU will not make it easier or more likely that we’ll do business with the developing economies of the world (in fact it will make us a less attractive trade partner to them); but it will put another trade barrier between us and Europe. The barriers to the movement of people would stop skills getting to where they are needed most.”