Start-Ups are Flourishing in Britain

Joris Magenti is a French national who grew up in Spain not far from the border between the two countries. After working for the United Nations, Magenti went on to earn a business degree from Oxford University. When he decided to build a technology start-up around his new dating app, DatePlay, London was the obvious location. According to Magenti it ‘takes weeks’ to build a business in Spain, while in Britain ‘you can register the company online’. Magenti and his partner, Vana Koutsomitis founded their company in 2015 and a public Beta launch of the new app, which designs a dating profile around gaming, is expected this year.

The UK government provides unprecedented support for new businesses, from financial assistance to advice on legal structure and low cost office space. Additionally, there are international law firms like Diekmann Associates, founded by Henner Diekmann, which provide guidance on company set-up, structuring and contracts. The plethora of resources has made Britain - and especially London - a hotbed of new technology start-ups, many headed by EU nationals like Magenti.



Britain’s Tech Sector

As mentioned in the last post, SVB’s Start-up Outlook Report found a favourable attitude among British businesses seven months after the initial Brexit vote. According to Phil Cox, president of SVB’s UK branch, ‘Businesses are seeing more opportunity than fear, which can only be a good thing’. However, there’s lingering concern about how many foreign workers and entrepreneurs will remain when Britain leaves the EU.

Currently, the tech sector accounts for 16 percent of the UK’s domestic output and about 10 percent of the country’s jobs. According to the Coalition for a Digital Economy (Coadec), a group which represents tech and digital start-ups, these numbers are likely to grow. A recent survey found the UK would need an extra 2 million digital workers by 2020 to fuel the current level of expansion in this sector.

Coadec estimates that about two-thirds of the average tech company’s workforce is made up of British nationals, while foreign workers account for the other third. Brexit will generate more opportunities for qualified British workers, but it could also create a talent shortage as education levels jump to meet the increased demand. Coadec has already recommended a special expedited visa for skilled foreign workers in the digital sector to help companies maintain current levels of expansion over the next few years.  

Brexit Repercussions

It remains to be seen whether leaving the EU will hurt Britain’s digital economy, but as yet the signs are hopeful. Start-ups are concerned, but the majority don’t plan to move elsewhere, given the many benefits that come with operation inside Britain. A plethora of job opportunities could make space for a new, digitally skilled British workforce, which would be an advantage over the long term.