In part two of our guest blog, Polly Purvis, chief executive of ScotlandIS, looks at the opportunities Brexit may create for the Scottish tech sector’s home-grown talent.
Brexit and the associated changes to immigration rules also represent an opportunity to refocus efforts to ensure we have enough homegrown digital professionals in the years to come. Increased investment in and commitment to digital technology skills education, both upskilling those already in the workforce and giving young people the ability to thrive in the digital world, would help address the skills gap which is holding the digital technologies industry back.
To seize these opportunities fully, adequate government funding and policy reforms are required to incentivise investments and commitment by both the public and private sectors.
On the regulation front, the recent Europe wide implementation of GDPR is a very positive step but there are serious concerns that once the UK is no longer part of the EU, we risk drifting away from the standards and legislation which have made the single market such an attractive place to do business. This would undermine the UK’s reputation for providing a stable regulatory framework. The UK government must therefore support its aspirations by ensuring that we track and match changes in the European regulatory environment, around data, IP, cybersecurity and digital platforms.
Turning to funding, new measures are required for both business investment and academic research. Within the academic research community there is real concern that we are already losing out on access to European research funding, and equally importantly those business and academic relationships built through collaborative research over decades. Scotland has been able to attract significant European research funding, so whilst the funding for the new research body UKRI is welcome, this will need to be substantially enhanced once we leave the EU.
The European Union has also been a significant source of start-up funding with Britain receiving more tech investment than any other EU country. This is already being impacted with the European Investment Fund, an EU agency that provides roughly one-third of total funding to local venture funds, reporting this April that financing of UK funds fell from 27% of its total investments in 2016 (c £180m) to 8% in 2017. Therefore, the Chancellor’s proposal for a National Investment Fund last August and the recent announcement of the new £2.5bn British Patient Capital programme aimed at companies with high growth potential are both very welcome.
Finally, the continued uncertainty on future trade and customs arrangements with the EU and other markets is a concern for the digital technologies industry. For hardware and ecommerce businesses, items still need to be shipped and the lack of clarity around customs protocols and documentation provides a major headache for these businesses. Many technology companies are involved in providing services, and don’t yet know the trading conditions which will apply to them in the future. Trade agreements tend to exclude services but, in our view, it is crucial that a future free trade agreement between Britain and the EU specifically covers these.
Ensuring that all these issues are dealt with during the negotiations with the EU should help to provide the level playing field the technology industry needs to continue to grow and add value to the Scottish economy.