The UK’s tech sector is the envy of other European countries—it boasts more funding and highly valued startups than its rivals on the continent. As Britain edges closer to leaving the EU, investors, entrepreneurs, and policymakers are watching whether Brexit will threaten the country’s access to top-notch talent.
By one measure, the UK is slipping relative to Germany, the only country in Europe that’s home to more software developers than Britain (851,000 versus 830,500), according to a report by venture capital firm Atomico. The UK’s slight lead has dissipated, and Germany and Britain are now tied when it comes to tech-worker immigration within Europe.
The UK remains the top destination for non-European tech talent, although its share has fallen about six percentage points this year from 2017, according to Atomico data. Germany, France, and the Netherlands, meanwhile, increased their share. Foreign tech workers are vital to countries like Germany and Britain, where almost half of those employees come from other countries.
British voters’ decision in 2016 to leave the EU hasn’t been an economic catastrophe so far. Funding for startups has been resilient, for example. And although growth in gross domestic product has lagged behind other nations in the bloc and the British pound has fallen, the UK economy has trudged ahead, with unemployment at its lowest level since the 1970s.
Britain’s ability to recruit top foreign talent is seen as a key test after it leaves the EU. Prime minister Theresa May has planned a post-Brexit visa system that treats EU citizens the same as those from other countries. People with higher skills who are seeking to live and work in Britain would be given priority, while lower-skilled immigration would be curbed.
Atomico’s report comes as Brexit turmoil reaches a fever pitch ahead of a key vote next week, when parliament will decide whether to accept May’s divorce agreement with the EU. If MPs vote against the deal, it increases the potential for the UK to crash out of the EU on March 29 without an agreement, causing upheaval in things like cross-border trade and commerce.
While Brexit hasn’t resulted in the dire economic consequences that some warned about so far, a cliff-edge “no deal” divorce could test even sectors like tech that have seemed (mostly) immune from the fallout.