Companies inside the EU don't want Britain to leave
But it’s not just native UK firms that are alarmed about the staffing fallout a Brexit might have.
Some foreign-headquartered firms are concerned that Britain being outside the EU may be a less effective base for their EU operations. Mike Rogers is the UK-based commercial director of Danish software firm Formpipe Lasernet. At present, he can easily travel across the EU and is relying on freedom of movement in setting up an EU-wide consulting arm from Britain. “If we leave, it suddenly isn’t business as normal,” he says.
Canadian-based cloud platform firm Cogeco Peer 1 has its European headquarters and data centre in Britain. European general manager Susan Bowen says this relies on multi-lingual staff from across the EU being able to work in the UK: “We need that access to talent, and EU membership gives the UK the potential for more talent,” she says.
Kate Craig-Wood, managing director of UK cloud services firm Memset, has concerns on immigration, with a third of her firm’s tech team from the non-UK EU and rising.
However, she has other issues with Brexit, such as the idea that Britain can focus on export markets outside Europe. “Most of our customers want a latency of sub-100 milliseconds to their services,” she says, which means British hosting facilities are only useful within Europe. “You’ve got the speed of light limit getting in the way, unfortunately.”
She is also concerned that when outside the EU’s single market, Britain would suffer from trade restrictions: “One of the counter-arguments is that both sides would have a strong interest in a free-trade deal, but from what I’ve read, any such deal would be quite unlikely to cover services.”
Trade barriers are no joke, according to Askar Sheiban, who says that Comtek had to give up on selling an item to a Brazilian client after it got stuck in customs for six months. Big companies can build the infrastructure to cope with this, but small firms cannot: “The European Union is a magnificent opportunity for these guys.”
He adds that Britain does well from EU funding for university research which benefits start-ups, and that Wales would lose access to EU regional funds, which the Welsh Government says are worth more than £500m annually.
We'll have nothing but worthless pennies and reams of useless laws
Craig-Wood is cynical that Brexit would reduce regulation, given that Britain is already lightly-regulated and that some of the biggest impositions on employers, she claims, come from Westminster. On personal data protection, where the EU has arguably increased the regulatory burden, she thinks Britain benefits from continental European caution: “Left to our own devices, we would potentially lean towards the American point of view, which I don’t think would necessarily be good for civil liberties.”
Brexit supporters argue that Britain could increase trade with other Commonwealth countries including Canada. Ireland-based Bowen says that Cogeco’s location could help mitigate the impact of Brexit if it happens, but adds that the practicalities of this are yet to be worked out.
Ross Mason, who moved from Britain to California to found integration platform firm MuleSoft - which states on its website that it is a US corporation headquartered in San Francisco - highlights what he sees as the risks of putting Britain outside of the EU’s Single Digital Market work, although this is yet to be completed. He doesn’t buy the argument that a UK outside the EU could emulate countries such as the US, given a much smaller domestic market: “The only way Great Britain can be great in this new digital era is to ensure that British companies can easily deliver digital products and services beyond the physical shores of its island.”
If Britain does leave the EU, some say we should expect big currency movements. “The pound would almost certainly suffer a sharp sell-off in the wake of a vote to leave the EU,” says David Lamb, head of dealing at Irish multinational forex company Fexco Corporate Payments. “In theory, this would be a positive for UK exporters as British goods would become cheaper for overseas customers, but the prospect of additional red tape for firms trading with EU countries would be a concern.”
Memset's Craig-Wood told us: “With both hardware and electricity linked to the value of other currencies their sterling price would rise, cancelling the potential for more competitive export prices.”
Currency movements, it could be argued, would be short-term factors, that could be ridden out and would settle down. Of longer term concern, though, is the loss of potential workers. ®