As we reach what could well be the Brexit endgame, the Home Secretary has already declared that freedom of movement for EU citizens would be abolished immediately in the case of no deal.
Despite warnings from campaign groups and opposition MPs that this would be “reckless’ and “create chaos”, the will of the people will be served by closing the door on a talent pool that has generated around one in five workers for the tech sector.
Talent is consistently cited as the single biggest challenge facing tech companies in the UK. It is also the single biggest asset that informs London’s position as a global tech capital. I would argue that when looking at the various attributes that have underpinned London’s dramatic rise as a global tech hub – access to capital, collaboration with traditional industries, supportive policy and regulators, world-class academic institutions – it is actually social capital that has given the UK a real competitive edge and made the difference.
By social capital, I mean the close-knit community in London tech, the ability to exchange ideas, access talent and interact with competitors and peers in open discussions. Collaboration across a diverse and growing workforce accelerates the potential for tech companies to scale.
However, while growth capital is proving resilient to Brexit fears and market uncertainty, with new records being set in terms of fintech investment, it is social capital that is most under threat in the coming months.
Ending freedom of movement not only strangles a vital talent source for tech companies and puts the future status of around a fifth of the current tech workforce in doubt, it sends a message to the international tech community that is entirely at odds with the spirit of social capital that has reinforced the rise of London tech.
For a community such as Level39, which has tech entrepreneurs from 48 nationalities around the world, this is important. We need world-class talent from Europe and around the globe to maintain the social capital that makes London such a compelling tech destination.
There was some cause for optimism this summer. For both GCSEs and A-Level results, the number of science, technology, engineering, and mathematics (STEM) qualifications increased, particularly for girls. Home-grown talent is vital to the future success of UK tech companies, and the lack of school leavers with STEM qualifications has been a problem. But this is not a short-term fix, and will not provide the skilled graduates and workers that tech companies so desperately need.
What the summer’s academic results do show, however, is that perceptions around STEM subjects are changing and, hopefully, young people are approaching employment with the growing realisation that STEM subjects open up career opportunities in technology, the fastest growing sector in the economy.
Because just as the country is facing its most serious political challenge for generations, so too is the tech sector experiencing a period of intense self-reflection and re-invention. For too long, technology has attracted billion-dollar investments, record-level valuations and rapid growth but it has not brought vast swathes of society with it. In fact, technology seems to be causing, rather than addressing, problems in society.
Social capital is of huge value to tech companies, but it must be expanded to mean a licence to operate that leaves no-one behind in society. This is why freedom of movement is so important – because it tells the rest of the world that UK tech is open to everyone and presents opportunities regardless of who you are, encompassing gender, ethnicity and socio-economic background.
Across London, there has been a surge of tech entrepreneurs, start-ups and scale-ups that are revising their diversity and inclusion strategies, but also considering the impact technology is having on society.
Bethnal Green Ventures is a VC firm that supports “tech for good” – start-ups that are using digital innovation to have a positive impact on society, whether that involves reducing pollution, more sustainable approaches to food production or new approaches to healthcare.
Within fintech, in which the UK enjoys global leadership, and where many of Level39’s 200 member companies focus their expertise, financial inclusion is finding new ways of bringing financial services to people who are unbanked or underbanked. This might involve new payments solutions to pay salaries to people who don’t have a bank account, or new ways to deliver payments, currency exchange and financial information to customers.
Technology has an extraordinary potential to make society more open, fair and inclusive. The impact of Brexit on the tech sector must be judged by its impact on the industry’s social capital and its continued determination not to leave anyone behind.
This article first ran in the New Statesman