4 August 2016
Entrepreneurship requires more than an idea and an exceptional founder with the dedication to make it happen. It needs skilled workers.
Whether they’re programmers, marketers, salespeople or machinists, successful start-up ecosystems like those in Edinburgh, London and Cardiff live and die by their ability to produce and attract the best talent.
Brexit fundamentally threatens British entrepreneurs’ ability to recruit from one of the world’s most dynamic and well trained workforces.
In my own research among tech entrepreneurs in Scotland, I’ve seen first-hand how finding the right workers – those with the skills, drive, ambition and stamina to stand up to the challenges and risks of start-ups – is their number one priority. The best companies hire the best people.
Some digital leaders were quick to dampen the post-vote fires by maintaining the to cope outside the EU.
But the talent needs to be able to come from anywhere, and for many firms, it comes from Europe. In Edinburgh, groups like StartEDIN – a member-driven community for the city’s tech companies – have launched recruitment missions to Europe to highlight the opportunities in Scotland.
What’s more, these Europeans aren’t undercutting the wages of British techies. If anything, their innovations are helping to bolster salaries across the sector.
According to the 2016 Tech Nation report, tech pay is at an all-time high thanks to the strong demand for people with cutting edge skills and fluency in the latest technologies. And 80% of the UK’s tech clusters have seen rising wages under our current free movement arrangement.
There aren’t enough digital and high-tech workers to go around, and the situation won’t get better after we close off our borders to the rest of Europe. Brexit would only make it worse for UK entrepreneurs trying to find the best and brightest.
It’s hard to get exact statistics on the number of EU-nationals working in tech throughout the UK, but a quick glance at a high-tech accelerator like CodeBase in Edinburgh shows they are a key part of the success for most high-growth start-ups in the UK.
While universities and colleges in the UK are doing their best to train new tech workers, they haven’t come close to meeting the demand. And many of their students are Europeans who could soon lose the right to work in Britain even after getting a degree from a British university.
I don’t have a lot of confidence the Government will be able to fashion a new immigration system that’s fit for purpose. Especially not one that can feed the tech sector’s need for the best.
Even if, under Teresa May’s Premiership, EU-nationals already in the UK are able to get permanent work visas, what happens to the next generation of employees and start-ups?
Many in the Leave campaign have talked about points-based systems like those in Canada or Australia. But these systems are very cumbersome for immigrants to navigate and represent a huge cost burden to young companies who have to pay immigration lawyers.
The founders of fast growing firms have limited time to give to bureaucratic immigration systems, let along the legal fees and sponsorship costs that increase the risk of hiring talent from outside the country.
There is a very real danger this could rob entrepreneurs of the right to hire (and fire) fast, taking away their flexibility. And at the end of the day, the best advantage a young start-up has over its bigger competitors is the agility to see a new opportunity and go after it.
Just like politicians in Paris and Frankfurt are thinking about how they can benefit from the finance sector decamping from London, I imagine policymakers in Dublin, Berlin, Talin and Stockholm are discussing new ways to offer British entrepreneurs start-up visas.
After all, these places have dynamic entrepreneurial ecosystems who can access all of Europe’s minds.
Why would any young entrepreneur want to stay in a United Kingdom that has turned its back on one of the world’s largest markets?
Dr Ben Spigel is Chancellor’s Fellow in Entrepreneurship and Innovation at University of Edinburgh Business School.