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UPDATED: Is the UK pulling the plug on its tech industry?

UPDATE: As of 3:16 PM, 24 June 2016 with 260 of 382 voting areas declared, Leave (51.5%) looks likely to beat Remain (48.5%)

The European Union is notorious for its bureaucratic rigour, having regulated everything from olive oil in restaurants to bendy bananas. And now, it seems, United Kingdom may be out. Web giants like Google have warned in the past bureaucracy was hurting its business, and with Britain getting closer to a win for ‘Brexit’ (Britain exit, get it?) in the national referendum on whether to stay in the EU, the Leave camp are calling on its population to escape the entity’s stifling red tape.

Except the tech industry’s not celebrating. All of Britain’s 14 ‘unicorn’ tech firms (those valued over $1 billion) such as property website Zoopla and financial start-up TechWise refused to back an exit from the EU. Meanwhile in the British capital, Tech London Advocates had found in a survey earlier in the year that a resounding 87 percent of its 320 members were in favour of staying in the EU. And in a similar report by Silicon Valley Bank, 72 percent of those polled thought leaving the EU would have detrimental effects on their business.

“Leaving the EU would significantly reduce U.S. investment and jobs in the UK as they transfer their business to other EU countries,” a London hardware executive said in the SVB report. Another executive was quoted as saying “geopolitics can overshadow business matters in Europe.” Unsurprisingly, only six percent of executives said the impact would be positive.

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One of the main concerns revolves around accessing talent. If workers from EU countries lose their ability to move and work freely, companies may find recruiting and retaining staff a much less efficient process due to the limited nature of the UK talent pool. It also spells a disaster for future research. From 2014 to 2020, the EU is budgeted to pump almost 75 million Euros worth of funding into British science and technology which will be all but a dream if Brexit eventuates.

And it’s not just tech giants who are crossing their fingers for a ‘Remain’ vote. Founder of Enterprise Nation Emma Jones says that if there’s one thing all small businesses hate, it’s “trading in uncertainty”. Similarly, Crunchboard’s co-founder Amy Harris insists the effects are already tangible as businesses “grind to a halt as confidence in the future falls”. And much like the possible 75 million Euro loss for tech research, the European Regional Development Fund (ERDF) which focuses on small and medium-sized enterprises with a digital and innovation agenda, is also at risk. With areas like Wales and Cornwall benefitting the most from the ERDF, the small amount of innovation happening outside London may be the first to go.

With fears of a skills shortage, diminished international perspective, and an impending ‘regulationfest’ to replace Brussels bureaucracy, the tech and innovation sector are anxiously awaiting the result. 

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