Friday, February 24, 2017

Brexit could be the best thing that ever happened to the UK tech industry

Brexit could be the best thing that ever happened to the UK tech industry.

HARRY BRIGGS, The Telegraph 
18 FEBRUARY 2017

My job means that I meet about a dozen entrepreneurs every week. I am often
blown away by how much they can achieve in just a few months: founders like
Roland Lamb, who has brought together 100 of the world's most talented
hardware and software engineers to create ROLI, revolutionising the way we
make music. Certainly, there is nothing like the energy and buzz of a
"start-up" on a mission, the thrill of growing 100pc to 200pc or more for
several years, making bold decisions, turning a mere idea into something
extraordinary: a global brand. Yet at some point, all "start-ups" lose that
magical momentum. The growth slows. Politics sets in. You start to hear:
"That's not my job," or "That'll never work". The office is empty by 6pm.
People forget the mission, and the customer. Start-ups become

The EU used to be a start-up on a mission. The first mission was peace,
after two world wars in four decades. Then food security. the single market.
eastern expansion. the euro. It achieved extraordinary things. But at some
point it grew too big. It did not know what its mission was any more. It
caught "institutionitis". To quote Yuval Harari in his book Homo Deus: "As
bureaucracies accumulate power, they become immune to their own mistakes".
How do I know this? Well, when your second largest customer, sorry, country,
gives you a vote of no confidence, and instead of resigning or promising
reform, you continue exactly as before and "punish" it for its "mistake",
you have a clear case of institutionitis. When two million migrants enter
your Schengen zone illegally in a single year, stoking an alarming rise in
the Far Right, and it takes you years to do anything about it, you have

When four of your member countries still have youth unemployment of more
than 40pc five years after the financial crisis, and you say it's not your
problem, you have institutionitis. 

In companies, the cure for institutionitis is the market. Companies that
stop caring about their customers will be killed off by a new disruptive
company (hopefully one backed by my VC fund) turning up and stealing their
customers. The old companies change, or they die. It's healthy. 

In government bodies, the cure for institutionitis is democracy. If a
government is doing a lousy job, we throw it out and replace it with new
leadership and bold policies. That is healthy. It clears out the bureaucrats
who have forgotten their purpose. But there is no way to "throw out" the EU
if it does a lousy job. 

What is worse, our national governments, whom we can throw out, increasingly
find they cannot make the dramatic change which people are calling for
because the EU has tied their hands. So we, too, get infected by EU
institutionitis. We cannot behave like a start-up any more. Which brings me
to Britain, and our tech sector.

I voted firmly to Remain in last year's Brexit vote, but the EU's response
has forced me, uneasily, to re-think. Most of us in the UK tech sector have
blithely assumed the EU is "a good thing" because it gives our companies
access to fantastic pools of talent, and untrammelled access to the world's
biggest single market. But what about all that fantastic talent outside the
EU? Is it really fair that if I am Polish or have an Italian grandma then I
get access to the UK willy-nilly, but if I am Indian or Zimbabwean I have to
pass stringent tests and arduous visa renewals every year? 

Tech City & Nesta's Migration survey, published this week, shows that non-EU
nationals make up a higher share of the UK's tech sector than those from the
rest of the EU - and they are more likely to have a Master's or PhD. ROLI is
a case in point: it has 60 Britons in its team, and 17 people from the rest
of the EU, but nearly twice as many, 33, from the rest of the world. They
include Chinese product designers, Ecuadorian engineers, Korean material
scientists, American execs. ambitious companies think beyond the EU. At
Oxford and Cambridge universities right now, we have more than 11,000
students from non-EU countries such as the US, China and India, against
6,000 from the rest of the EU. Yet our EU bias means we send most of those
brilliant nonEU students back home at the end of their studies. 

There is no doubt that extracting ourselves from the EU is going to be an
almighty and expensive pain in the neck. Yet Brexit could prove to be a
fabulous chance to simplify our immigration policies, so that the most
brilliant enterprising people from every country, Asian, African, European
or American, have a fair chance to work in the UK, and to nudge our most
ambitious entrepreneurs to think beyond the Atlantic, the Mediterranean and
the Black Sea in terms of talent. And perhaps the upheaval of Brexit might
even cure us of institutionitis, and free us to become a truly "start-up"
nation. Harry Briggs is a partner in BGF Ventures

No comments: