What the referendum means for IT: Trade, data, people, headquarters and innovation

BCS is here to make IT good for society, and the result of the referendum on UK membership of the European Union will have significant long term implications for IT in the UK, and for how IT affects UK society. There is a fundamental uncertainty about all of the relevant issues, but there are some important areas where clarity of purpose needs to be quickly established to drive our national response. The digital environment is crucial to the long term success of the UK outside the European Union, and our initial thoughts on what we should be seeking through the process of exit and negotiation are:

  • Digital innovation as a key principle for international negotiation; access to digital markets with the freedom to innovate
  • Ensuring the UK’s data protection environment is recognised as having ‘adequate protection’ by the EU, while also supporting innovative approaches to data; pursuing the BCS personal data challenge
  • Recognising the importance of free movement of high-capability / impact academics and professionals in IT and Computing; pursuing the BCS capability challenge, with understanding of the true nature of the digital talent we need to foster, attract and develop
  • A focus on growing our academic research base and industrial collaborations in computing, to shore up and build on a major driver of UK economic success and international influence in the digital sphere
  • Reaching out to global digital businesses to assure that the UK is a long-term centre for global digital innovation and commerce
  • Act to build confidence in the continuing relevance of the combination of finance, talent, regulation and access to markets that is helping grow the UK’s tech start-up community, digitally support UK business, and underpin the UK's overall economic performance.

Trade with Europe

In the short term the uncertainty is likely to have an economic impact on every sector. The immediate shock to the pound and markets may settle, but if the pound remains low beyond the initial reaction this could have a few impacts. For example, underlying prices for cloud services are often set in dollars, and this could mean over a period that the cost of services rising, while on the other hand British-based IT services will become more attractive both domestically and for export. The shadow of wider macroeconomic effects (as they develop) may loom large, but for UK business the key will be the ability to respond positively and actively, adapting and innovating through the uncertainty and change, creating and leveraging the digital opportunities.

The most important question will be the UK’s trading relationship with Europe as this will influence the legal frameworks in which UK IT operates. This will have a substantial impact on everything from telecommunications pricing and regulation through data protection and copyright. A close trading relationship could mean the UK simply inheriting portions of legislation on data and digital markets, or steering a path that provides compatibility but greater freedom.

Continuing the theme of uncertainty, this could mean little change for the operating environment for IT within the UK, or substantial narrowing of the UK’s role in global digital services, or the opportunity to create a lean and fleet-of-foot digital environment while still trading effectively with Europe. It’s essential for the UK that the direction is the latter.

Data

The data protection act is a UK law, but one derived from a European directive. The timing of the introduction of the General Data Protection Regulations - set at a European level - and a formal UK exit could make for some difficult decisions for businesses about what they need to comply with. However, it is very unlikely that an exit from European digital markets will be in any way desirable, so compliance at some level is likely to be both necessary and desirable. There are also interesting opportunities for the UK in this context. Key to the trading relationship will be ensuring that the UK’s legal environment is recognised as providing ‘adequate protection’ under EU data protection law. The best possible scenario is where the UK manages to get that incredibly valuable compatibility, but with greater freedom to innovate in the legislative environment. The current list of recognised regimes is small, but encouragingly it includes Jersey, Guernsey and the Isle of Man; parts of the British Isles with some important lessons in how to operate close to, but outside, the EU.

The BCS personal data challenge becomes even more vital in this context, as it becomes a framework for the incredibly important conversation around how the UK wants its citizens to be treated regarding data. Outside the EU’s domain the UK could be regarded as vulnerable to a number of international forces, but with the right relationship the UK could play a global leadership role in this area. The opportunity is for the UK to act as a global demonstrator of how to ensure both individual control and commercial exploitation of the power of personal data.

People

The IT profession is for a number of reasons, heavily globalised. Questions over free movement and immigration will affect the UK in both directions; organisations wanting to employ non-UK nationals and UK IT professionals working internationally. Tightening of labour movement in either direction may affect IT professionals less than other sectors simply because skills shortages are widely recognised across the entire world. It may make cross-border working more difficult in terms of visas and / or processes – but at this stage it is entirely speculative.

This needs to take into account that digital capability is a continuum; there are dedicated IT specialists and they are incredibly important, but the broader talent pool the UK needs to supply, utilise and access is not so neatly boxed. It is more important than ever that we have a sophisticated understanding of the people and the talent that we need, and use that as the basis of our negotiations and policies.

For higher education, fears have been expressed that exit from the EU will impact universities, and this will in turn have a number of knock-on effects for the attractiveness of the UK for IT business. It will be critical to ensure that UK computing strength is supported, and that the UK’s academic computing community are able to operate on an international basis. Rather than allowing a change in European relationship to contract our vibrant and nationally-important academic computing community we need to embrace and extend international collaboration and send a clear message that this is the UK's intention.

Headquarters

The UK has historically been a major centre for global digital business, although in recent times has seen competition grow from other European countries; Ireland in particular. Access to European markets, talent, innovation, finance in an open and English-speaking country contribute to that calculus. The UK exiting the EU will affect that calculus, and it is incredibly important for the UK’s economy and global influence that these changes improve the proposition to those organisations, and is seen to do so as early as possible.

Innovation

If the UK is to be successful as a nation outside the EU in the long term, and we are able to make IT good for society, success in the digital sphere is absolutely critical. With the right relationship with Europe - on trade and data - the UK could become a very attractive place for both global digital business and for tech start-ups with global aspirations. The UK’s track record in Europe for digital innovation and leadership is second to none, and the negotiations and development of a digital UK outside the European Union means everything to play for. This needs to be at the heart of domestic government policy and a major driver behind negotiations to establish the UK’s future relationships with Europe and the rest of the world.

Where do we go from here?

This is an initial response from BCS - rather than a formal position - and we need to get together as members to better understand the issues and what we need to do. There is a major role for all of us through BCS to help guide and work with our government, our industries, our members, the sector and the general public as they seek to understand how to make IT good for society in the wake of the referendum. We'll continue to share ideas and comments, we'd love to hear from members, and we will update you on how you can take part in this dialogue and activity - that starts today, but will continue for a long time to come.

About the author

Thoughts on membership, the profession, and the occasional pseudo-random topic from the BCS Policy and Community Director.

See all posts by David Evans
October 2017
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