Brexit And Tech: What Lies Ahead? - InformationWeek
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6/27/2016
08:06 AM
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Brexit And Tech: What Lies Ahead?

British voters have decided to leave the EU. What will that mean for enterprise IT?

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Voters in the UK have voted to take their country out of the EU, starting a process that will lead to separation in about two years. So far, the response has been angry words, confusion, and some whopping losses on stock exchanges around the world. But how will this affect the IT industry?

(Image: PublicDomainPictures via Pixabay)

(Image: PublicDomainPictures via Pixabay)

The honest answer is, "We don't know." As pundits kept saying from the time the voting results became apparent, the British voters are leading Europe and the rest of the world into uncharted territory. While it's assumed that there will be significant changes, the specifics are unknown. It's easy to guess, though, that there will be a few areas that do hit enterprise IT, especially if it's part of enterprise IT dealing with international business.

Security/Privacy

European privacy regulations are much different from those in the US. The saving grace for companies working under those regulations has been that there was a single set for all of the EU. Now, Great Britain might or might not keep their regulations the same as those in the EU. To the extent that they're different, it becomes more difficult to do business in Great Britain.

Language and culture notwithstanding, when international companies are making decisions on expansion they might well decide that a data center on the continent makes far more sense than one in Great Britain. Look for Ireland to be a big winner from this.

Shaky Markets

Business leaders hate uncertainty. The idea of "uncharted territory" makes them break out in hives. The one thing they know to do when things get uncertain is to save money. That means that they're going to be reluctant to fund new projects, unenthusiastic about new technology, and unwilling to do anything more than what they perceive as the bare minimum. None of that is good news for IT executives trying to put together a workable budget for a department seeing greater demand.

Business Pullback

Gartner had already predicted that IT spending will go down in 2016, based largely on currency fluctuations, and the fluctuations used for those predictions are nothing compared to those seen in the last 24 hours and predicted for the next few months. While opinions differ on whether North America is heading into another recession, IT is already in something of a pullback just in case the economy gets worse.

The stock market impact and general uncertainty brought by the Brexit means that big budget gains for IT are unlikely. I'm not sure we're all the way back into "do more with less" territory, but that's a direction I'd certainly start factoring into plans for the next couple of years.

Talent

Great Britain isn't a large manufacturing hub for computer and networking gear, but it remains a leading center for research and development. Immigration was one of the driving forces behind the Brexit vote, and no one knows what the overall impact will be on UK immigration policies and laws.

If top-notch researchers are kept out of the country then there could be a major impact on networking advances and new products. Remember, too, that Great Britain is home to the Raspberry Pi, and it's been a leading center of IoT research. There is likely to be some nervousness around these markets as people decide whether they will remain welcomed in the country.

[See 10 Programming Languages That Will Keep You Employed.]

The results of the vote will have an impact on almost every aspect of business and commerce in and around Great Britain. To be honest, IT will probably not be the industry most heavily hit by the results. But until companies and bureaucracies have things figured out, bet on instability and you'll be as safe as it's possible to be.

Curtis Franklin Jr. is Senior Editor at Dark Reading. In this role he focuses on product and technology coverage for the publication. In addition he works on audio and video programming for Dark Reading and contributes to activities at Interop ITX, Black Hat, INsecurity, and ... View Full Bio
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jastroff
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jastroff,
User Rank: Ninja
6/28/2016 | 1:43:51 PM
The Macro-Micro View
@curtis -- thanks for the quick macro-micro view re: Brexit and Tech. Just the issue of changing security standards alone could take up several volumes. That's a micro issue. The Markets issue, more macro, so complex, but equally important. 

The UK took the path they thought worked for them, and not being under the EU they believe, is a better deal. They can decide their own destiny. But whether good or bad in the future, the UK may have some surprises in store for the world of Tech.

Either way, the consultants, analysts and economists will be very busy for a while.
Susan Fourtané
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Susan Fourtané,
User Rank: Author
6/28/2016 | 7:35:22 AM
Startups
Curt, and there is also the startups that will be affected.

The current movement of talent within the EU --including the UK-- is beneficial for both well established companies and startups. Many of the founders of European startups have met at university, either in the UK, or another EU country. They work remotedly at the beginning from their different cities.

Many set their headquarters in London and take advantage of Campus London, where they grow with the evening of entrepreneurship, they learn about tax incentives and financial insights, share experiences, and even share office work spaces. This is a Google initiative, and Campus London also provides mentoring sessions with expert Google mentors covering diverse topics. 

All statups benefit from this, and they grow as truly global and diverse tech companies. 

What will happen after Brexit? Startups will have it more difficult. For UK startups it will be less easy to recruit talent from the EU, and vice-versa. For startups, participating in competitions, attracting VC, attending startup conferences will not be the same. Fees and regulations, which don't exist at the moment might start to block incentives, development, and have a negative effect in the rich startup environment that has been created during so many years now.

London ranks number one at the moment for European startup hubs. In the same way financial institutions, and big enetrprises are talking of moving to the EU, the same is likely to happen with the startups, with the consequences that it implies.

-Susan  

PS. I like what you did with the headline. :)  
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