Focus on SME investment and training post -Brexit » SMEInsider

Focus on SME investment and training post -Brexit

An influential technology partnership has called on the government to take a more proactive approach to encouraging the improvement of UK skills as well as protecting health of SMEs by supporting more investment into start-ups following the decision of UK voters to leave the EU.

TechCrunch counts among its members some of the most influential and well known technology firms and personalities. Last week it sent an open letter to PM Theresa May calling for more investment in skills, particularly in the digital arena; greater emphasis on education, more incentives for start ups and greater support for R&D.

The letter, which is reprinted in full here, was signed by:

  • Bernard Liautaud, General Partner, Balderton Capital
  • Brent Hoberman CBE, Founders Forum
  • Dale Murray CBE, co-founder Omega Logic
  • Edward Wray, Co-founder of Betfair
  • Kathryn Parsons, co-founder and co-CEO of Decoded
  • Niklas Zennström, CEO and Founding Partner, Atomico
  • Richard Reed CBE, Co-founder Innocent Drinks / JamJar Investments
  • Sherry Coutu CBE, Chairman, founders4schools
  • Sonali De Rycker, General Partner, Accel Partners

 

“UK startups require a commitment from the government”

“Despite these uncertain times,” the letter says, “The British high-growth technology sector needs certainty from the UK government when it comes to a number of issues in order to continue its world-class status.

Britain has attracted some great entrepreneurs from around the world who have started businesses in the UK. It is imperative that the government recognises the need to attract and retain the very best talent globally.

Right now the UK is the destination for European tech talent, attracting almost 50% more searches for tech jobs than Germany, its nearest rival (research by Balderton Capital). Meanwhile, the tech sector is creating jobs faster than any other industry, with the UK growing 50% faster than the European average (according to Atomico’s ‘The State of European Tech 2016’).

UK startups require a commitment from the government that the investment drive of the last few years will continue in order for UK startups to maintain their lead in many areas. It is important for all the UK’s business sectors that the tech sector continues to flourish, since all business now runs on and is affected by technology.

We would like the UK government to make a clear statement on the below issues, which would do much to ensure the tech sector isn’t damaged by recent rhetoric.

SKILLED MIGRATION

* The visas of skilled tech workers from strong tech nations (USA, India, Commonwealth, Eastern Europe) need to be preserved post-Brexit.

* It is essential that British universities remain an attractive place to study for non-British and British citizens alike.

* To that end we would like the UK government to implement a “STEM Passport.”

* Ensure the UK is open and welcoming toward skilled workers; is still able to recruit the best skills and entrepreneurial talent across Europe, with minimal barriers to movement; and that existing migrant workers are allowed to stay and continue to work in the UK. The UK professional developer population is currently the largest in Europe, at 745,000 out of 4.7 million (Atomico research) and is the No.1 destination for inbound tech talent (Balderton research).

* The UK government should take a zero tolerance policy approach to hate crime, sending a signal to our diverse workforce that all are welcome.

The No. 1 concern for entrepreneurs post-Brexit is access to talent, in particular technical talent. Hiring through existing visa processes is timely and expensive. Quotas on specific skills could severely limit the ability of new tech companies to grow, as well as limit the ability of British skilled students to learn alongside other global experts.

We must give STEM graduates from leading universities an instant qualifying visa to live and work in the UK, and end the uncertainty where they must leave and later re-apply.

This would:

* Ensure that fast-growing tech companies can continue to hire the best talent quickly.

* Continue to make the UK’s universities highly attractive to study at for STEM subjects, as students will not fear being forced to instantly leave the country after graduation. The UK already has many of the world’s leading computer science institutions, including Oxford, Imperial, UCL, Edinburgh and Cambridge.

* The government should look again at whether linking visa applications with the requirement to attain capital investment is the best way to retain skilled talent.

* Plug a skill gap in STEM present in the UK while more investment is made into education in this space.

* The government could create an ‘easy win’ with the promotion of a scheme to make awards to young brilliant engineers to relocate to the UK. This would send the right signals to the world and help to avoid any ‘brand damage’ done by recent government rhetoric around immigration.

EDUCATION

* We support government, business and start-ups working together to formulate a domestic strategy which will foster the next generation of “digital skills”. Making the UK the most dynamic and innovative place for technology education across coding, data, cyber security and entrepreneurial skills. Harnessing the power of technology to enable access to high quality education and skills for all. Finally it should extend its Startup Loans scheme to allow young people to start their businesses as early as possible.

INVESTMENT

* While the panel welcomes the announcement by the government on R&D investment, it would welcome reform to the R&D tax credits to help the share of both private and public R&D expenditure to increase (compared to other OECD countries the UK lags behind).

* While the BBB has been effective, the government must address any shortfall that occurs after the withdrawal of EIF funds through the British Business Bank.

BUSINESS INCENTIVES

* Allow small startups a tax rebate if their business rates make up more than, for example, 5% of their overhead expenses.

* Expand Enterprise Zones or add more.

* Reward large corporates that do more to support and invest in startups. In France, the association ‘SME Pact’ facilitates relations between SMEs and large companies, public or private, allowing the emergence of ‘mid-cap’ and ‘scale-up’ companies from the best SMEs.

PROMOTION OF THE UK

* Launch a campaign that ‘Tech Britain Is Open’ to complement the Mayor of London’s current efforts with ‘London Is Open,’ where greater emphasis is put on the technology sector.

DIVERSITY

* The government should incentivise and encourage tech firms to increase the range of gender diversity on their corporate boards, where they haven’t done so before.

* Government should advocate and take a lead in encouraging events and organisations that promote cohesiveness in civil society.

SINGLE MARKET ACCESS

* The government should campaign for access not just to the Single Market, but also the EU’s Digital Single Market.

* The government should lobby for a similar scheme to the EU Startup Passport as a means to creating a simple and competitive legal framework for corporate, labour, tax/fiscal incentives, stock options and bankruptcy matters.

MARKET STIMULANTS

* Regulatory arbitrage on matters such as blockchain, sharing economy, drones, fintech, etc, has set a positive message and should be continued. For instance, London is the number one city on Europe or talent in Artificial Intelligence.

* Accelerate the work the NHS, Bank of England, Open Data Institute, London Transport, etc, on ensuring government can be a customer of startups

* Ensure the R&D fund supports the industries of the future (artificial intelligence, robotics, medtech/big data) with tech industry having input.

* Govtech: Encourage more entrepreneurs to second themselves into government (similar to the White House’ Entrepreneurial Fellows).

* Government should highlight the benefits of tech not just to the privileged few but the whole country and demonstrate that it isn’t just startups but large corporates and big industrial employers which will owe their future growth to a vibrant tech sector.

INTERNATIONAL POLICY

* The UK stands to benefit by continuing to engage the world’s tech giants, ensuring that the UK offer remains world-beating and sending an unequivocal signal that the needs of the digital economy will always be addressed. The world’s leading tech companies are known to be building deep tech engineering centres in the UK (Atomico research).

* Data is the lifeblood of the digital economy. The UK must ensure it allows its companies to be either part of the EU data regime or the US, or it can employ rules largely compatible with either or both. Britain must be data-savvy.

For the future of our next generation and the benefit of the UK, we hope you will take urgent action on our points highlighted above.”