Comment: Brexit and the effect on Scotland’s tech start-ups

A national newspaper recently wrote a piece on London’s tech start-up scene and how there is a sense of an international community that is suddenly adjusting to realities it never expected because of Brexit.
Zoi Kantounatou, co-founder of the entrepreneurial leadership group FutureX. Picture: contributed.Zoi Kantounatou, co-founder of the entrepreneurial leadership group FutureX. Picture: contributed.
Zoi Kantounatou, co-founder of the entrepreneurial leadership group FutureX. Picture: contributed.

A leading tech journalist was quoted saying people will “pack their bags and go wherever they’re most welcome” and that “the optics of Brexit are not about welcoming, they are about closing doors”.

Being quite ingrained in Edinburgh’s tech scene, I spoke to a few friends and contacts last week about their own views on the subject and what it means for Scotland’s technology ecosystem.

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According to John Peebles, born in the US, raised in China and chief executive of enterprise software scale-up Administrate: “It can be easy to forget that the most important asset a software company has is its team. Like most UK start-ups, our team is made up of people from many different nationalities and the uncertainty caused by Brexit is a risk that threatens the UK’s position. Like many others, I am an immigrant who came to the UK looking for opportunity with a desire to build something. It is critical that we don’t add barriers by making it more difficult for people from other countries to come here and contribute.”

Lisa Thomson of Purpose, an HR specialist agency working with fast-growth companies in the tech and life sciences sectors, says: “This is hugely topical and we have been running internal workshops and awareness sessions with clients about Brexit. Attracting and retaining a diverse talent pipeline from EU and beyond is key and uncertainty is not helpful.”

Thomson points out that one of Purpose’s client companies has ten nationalities from a headcount of 25.

During my time advising Skyscanner around all things PR, when we were briefing journalists we would always talk about the number of nationalities at the travel search site before we got to other metrics like app downloads and even revenues. That was something that came from the top, from the chief executive and co-founder Gareth Williams. I think, as well as enabling the company’s internationalisation, it was something of a badge of honour.

IT recruitment dynamo Kelli Buchan, who has supported high-intensity hiring phases at Administrate, FanDuel, PureLiFi and Care Sourcer, says the last two months of 2018 were the quietest she has experienced in the 15 years she has worked in the tech industry in Scotland. “People do not want to take risks at the moment until they know for certain how Brexit plays out.”

Andy Robinson, chief commercial officer at CodeBase-headquartered software development studio Cultivate, which counts Deliveroo among its client base, adds a note of caution: “We’ve seen first-hand the uncertainty Brexit has caused for European employees who chose the UK as their home and are now considering the prospect of leaving. Aside from the economic uncertainty, it’s a shame to see the country perceived as anything other than a welcoming place for the talented people we so desperately need.”

Zoi Kantounatou, Greek national and co-founder of the entrepreneurial leadership group FutureX that runs the annual Start-up Summit in Edinburgh, puts things in perspective“European Union professionals don’t see the UK as the place full of opportunities that it used to be. It’s a big step to move somewhere new and you need to make sure it’s the best one for you, your future, your family. Let’s not forget that the rest of the Europe is still open and it makes sense to choose a country that can provide stability and security.”

She adds: “I have friends who are developers in Greece, fell in love with Edinburgh when they came to visit and were thinking of moving here but the uncertainty over whether they will be able to work in the UK has paused these conversations.”

Houston, it appears we could have a problem.

Nick Freer is a founding director at the Freer Consultancy and Full Circle Partners