Pete Marcus

31 Jul 2019

As I write this blogpost, Boris Johnson has just made his first speech outside Number 10 as Prime Minister, promising that the UK will leave the EU on 31st October, “no ifs or buts”. After what feels like a couple of months’ hiatus, Brexit is returning front and centre to our daily news. It seems like a good time to think about what Brexit means for the tech sector and where we might go from here.

Brexit and the tech industry

Our latest Harvard Pulse data – conducted in May – found that Brexit is among business leaders’ top priorities. One in five said it was in their top three priorities, and in total 77% said they were concerned about the impact Brexit would have on their company. I doubt those figures will have gone down in the interim period, as the no-deal rhetoric has started to harden. We’ve been thinking a lot about Brexit at Harvard for the past three years and its implications for the UK’s tech sector. I sometimes feel that the shock of the referendum result has been hard for UK tech businesses to absorb, not simply because Brexit is so contrary to the political preferences of most of them, but because it’s fundamentally alien to their ways of working. That’s to say, Brexit is a geopolitical variable thrown into the mix of a bunch of longer-term technology trends (ongoing digital transformation, the rise of AI, the roll-out of 5G) that these businesses are much more comfortable thinking about and planning for. It’s also a disruptive force that has upended long-held certainties about regulatory frameworks, access to talent and free flows of investment capital. The assumptions we’ve grown up with since the end of the Cold War seem to have gone.

Changing attitudes to tech

We’re entering a new era – as an industry as well as a country. The boom in tech over the past couple of decades went hand in hand with globalisation. The common thread between them was openness, connectedness, bringing people together wherever they were, with all of us sharing a digital realm that paid no heed to geographical boundaries. But Brexit (and perhaps even more, the election of Donald Trump) showed that millions of people around the world disagreed. These forces of globalisation made them feel powerless, even threatened, and changed their world faster than they were comfortable with. Brexit was a chance to protest, slow things down or even go into reverse, back to “simpler” times. Whatever happens with Brexit, the challenge it poses philosophically to the tech sector is pretty profound. The narrative about the undeniable benefits of greater connectedness – and the unstoppable momentum towards a more open future – has been fundamentally contested. Trump’s trade war with China – which has turned tech into the frontline of a new Cold War – has already underlined this point. A no-deal Brexit will only reinforce it further. Now, maybe the pendulum of history will swing back towards openness, but even if it does, it won’t happen suddenly. And the hardening of no-deal rhetoric in recent days makes me less confident that the UK will return to the status quo ante any time soon.

The UK's future

There’s one bigger point here too. No one knows where a no-deal Brexit will lead or what implications it will have on wider society. But it’s very plausible that it precipitates a break-up of the UK and even more deeply entrenched social divisions. That’s a much bigger process than any British person has experienced in the last 70 years. It’s much bigger than worrying about individual government policies that might or might not favour the tech sector. It’s about a nation redefining itself. And if no-deal does happen, the shock to the UK will reach far beyond tech companies alone.   Have a read of the full Harvard Pulse report for more insight.   Photo credit Elionas2. Image here.