How will the UK tech sector be affected by Brexit?

After much debate and negotiation in Brussels and London, the UK will leave the European Union at 11pm tonight and a Brexit transition period will begin. With this in mind, what how will Brexit affect the UK tech sector going forward?

16% of employees prepared to leave

A recent study by TopCV found that 16% of UK tech employees said they are planning on leaving the UK and their current job with the aim to advance their career due to Brexit.

From TopCV’s research, it’s estimated that the marketing, media and design sector could be most affected by employee leave, with a quarter of professionals planning to head abroad, followed by science and education (21%), engineering and construction (18%), project and programme management (17%).

Amanda Augustine, careers expert at TopCV, said: “Our research reveals incredibly dire implications for Britain’s tech sector. We have some of the brightest minds and most creative startups in the UK, so for 16 per cent of that talent to leave would be shocking.

“Hiring and retaining the right staff, even in the steadiest of times, can be tough. Employers will have to identify creative ways to incentivise their employees to remain in the UK – and quickly.

“As a silver lining, there are numerous ways those wanting to break into these industries can leverage Brexit as an opportunity to advance their careers as a result of new vacancy openings.”

A need for supply chain auditing

During the Brexit transition period, UK tech companies may try to rush into trade completions with solution suppliers.

This would mean an increased need for checks on supply chains to ensure that mistakes aren’t made.

“Looking ahead, UK businesses will need to introduce and adhere to more stringent and thorough supply chain auditing processes even when they are under pressure to problem solve,” said Simon Wood, group CEO at Ubisecure. “This is especially pertinent as we enter the Brexit transition period post-Friday 31st January.

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“It is important for organisations to be aware that every time a new relationship is on-boarded there is always an element of risk, and this applies to everything from the KYC stage to the operational side.

“Making sure that suppliers are complying to industry standards and regulations is a key first step when entering into a new relationship with a supplier. This also involves carefully checking that they have robust security processes and tools in place, including efficient Identity and Access Management practices.

“If you’re doing this at speed, the risk of breaking contractual agreements and overlooking correct processes rises significantly.”

Cyber security skills could diminish further

Brexit, once the transition period is over, will mean that the UK tech sector will hire less employees from outside the country due to stricter border regulations.

According to Ippolito Forni, threat intelligence analyst at EclecticIQ, this could mean that the cyber security skills gap in the UK could widen.

“Global demand for cybersecurity experts has already outpaced supply, and Britain’s exit from the European Union is set to be a further barrier to talent acquisition,” he said. “Limiting entry to the country means limiting our pool of thought, and diversity is key to successful cybersecurity teams.

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“As cyber-attacks continue to evolve, companies need a diverse range of security skills on their teams to stay one step ahead of the hackers.

“The only way of bridging the skills gap is through a combined effort between the wider industry and education, to encourage the next generation of young people from a diverse range of backgrounds to consider a career in cybersecurity.”

Disaster recovery post-Brexit

Many UK tech businesses have been using disaster recovery services outside the EU, so they may need to look into other possibilities, depending on how negotiations turn out during the transition period.

Eltjo Hofstee, managing director at Leaseweb UK, said: “Depending on the progress of the ongoing trade and cooperation negotiations following the UK’s departure from the EU, organisations that currently have active and/or production environments hosted in the UK, but DR sites outside of the UK, might need to change their arrangements.

“At the very least, many should be reviewing their current approach and assessing how alternatives, such as Disaster Recovery as a Service (DRaaS), could play a role.

“Possible future scenarios include moving DR infrastructure to the UK, if the organisation has UK business and privacy data, or transferring everything to the EU, if they have EU citizen privacy data.

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“In addition, some organisations may need to explore a dual approach across both territories if they have both UK and EU-based customers. This all hinges on the outcome of discussions between the UK and EU about how GDPR will apply and whether the data held (and backed up as part of a DR strategy) by UK business is ‘adequately’ aligned with GDPR.

“Based on the current conversations between EU and UK, nothing will change in terms of data privacy protection laws/rules.”

Cloud adoption as a solution

Hofstee went on to explain how the adoption of cloud architecture by UK tech companies could help them prepare for Brexit.

“In the UK, Brexit will likely give a push for more locally stored privacy data, and adoption of cloud is likely to increase globally. Specifically, companies can expect the demand for cloud-based DR to continue to rise in a post-Brexit Europe.

“Despite the recent election result, there’s much about Brexit that still needs to be finalised,” he said. “As a result, businesses will need to be prepared to adapt rapidly to whatever policies and regulations result from the negotiations.

“Instead of undertaking a costly move to a more advantageous location, cloud adoption can provide the ideal solution to disaster recovery challenges and is one of the most effective ways for IT leaders to prepare their companies for a post-Brexit UK and Europe.”

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Aaron Hurst

Aaron Hurst is Information Age's senior reporter, providing news and features around the hottest trends across the tech industry.

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