On the 23rd of June back in 2016, the British public voted in the Brexit referendum to decide the country’s future in the European Union. 52% of the public voted in favour of Brexit, starting the process of Britain leaving the EU. At the time, the markets reacted very poorly to the outcome of the vote, with the value of the pound sinking against the euro. Most business analysts predicted that it would have far-reaching impacts on the British economy, although at the time it was unclear exactly what effect it would have.
Since then, Brexit has been finalised, with the UK official leaving the EU on the 31st of January 2020. A lot has happened in the years since, and the UK’s economy has now doubt been affected. The trade economy was particularly impacted, falling 12% since 2019 due to the difficulty in trading with EU member states. However, some UK industries have seen growth, including the tech industry.
UK Tech Industry Growth
This year, it was revealed that 38% of the total valuation of all European unicorns in 2021 would come from UK tech companies, the biggest share on the continent. Over £6 billion has already been funded by UK tech startups in the first three months of 2022, with fintech firms raising more than half (£3.3 billion).
Although London has always been the centre of the tech industry in the UK, recent years have seen other major cities also experiencing a tech boom. Cambridge is now the leading regional tech city in the UK, followed by the likes of Manchester, Edinburgh, Cardiff and Belfast.
The £29.4 billion raised by UK startups in 2021 was over three times as much as the £9.7 billion raised by French businesses and double the amount raised in Germany (£14.7 billion). A third of the £89.5 billion that was invested in the European tech ecosystem this year came from the UK.
UK Tech Adaption
Leaving the EU has meant that the UK has less access to innovation grants and other funding sources. In addition, it meant a change in the availability of employees. However, some companies have still managed to benefit from the move and the tech industry in particular has seen a lot of growth since.
The fintech sector in particular has seen the most benefits from Brexit. Freedom from the regulations imposed by the EU has meant that the UK has been able to set its own rules. This has led to the UK becoming a haven for fintech startups and this area has seen an enormous amount of growth. This not only encourages innovation, but it may also aid the United Kingdom in repositioning itself as a centre for cryptocurrency and decentralised finance, or DeFi.
Data privacy is another key area in the Brexit discussion. Luckily, personal data can flow freely between the UK and the EU without issues just as it did before Brexit. Companies have been able to make the most of this, using data from a variety of sources to provide insights into business decisions.
Data-driven technology is one of the biggest current trends in the industry, with data being used by link building agency Europe as well as major companies in the UK and across the world. The right use of data can help inform strategy and lead to better decisions. It can also lead to new innovations in technology.
Although the current financial climate is one of negativity with inflation and the cost of living crisis, the future of tech in the UK looks bright. The industry has had to adapt to challenges posed by Brexit, but with the right policies in place, it can still lead the way.
