The UK to exit the EU: What are the Implications for Tech Companies?
Most analysts agree: the economic consequences of the UK leaving the European Union will be bad, and, in all likelihood, the long-term political implications will be even more dire. For British technology firms the prognosis is no better. Leaving the EU means shortage of skills and limited ability to employ non-UK workers, new trade regulations and tariffs, and uncertainties concerning EU’s data protection directives.
In the chaos of the Brexit we’ve nearly forgotten that one of the primary initiatives of the EU was to catalyze long term economic growth through higher levels of collaboration and deliberate investments in innovation. The EU supports several interlinked programs that provide member states €120 billion over the period 2014 – 2020 for research, development and innovation. The largest program is Horizon 2020 with a budget of just over €70 billion.
After Brexit, UK firms will no longer have easy access to EU research grants. Some are quick to dismiss these grants as they represent only a small fraction of the UK’s technology R&D budget, and point out that the UK is actually a net contributor to the EU budget. Between 2007 and 2013, the UK contributed €77.7 billion to the EU, which amounted to 10.5% of the total EU income from member states, and received €47.5 billion in EU funding (6% of the total).
But they may be missing the point.