Will the London venture ecosystem survive the turmoil of Brexit?
This article provides new and actionable understanding of the London venture community’s ability to survive, or even thrive, in a post-Brexit context.
With Brexit looming ahead, the uncertainty about London’s economic future is at its peak. The government’s Tech City policy initiative, launched in 2010 by then Prime Minister David Cameron, led to a transformation of London. It marked the inception of London as a major venture hub, attracting founders from all over Europe and catapulting London to become a leading Fintech cluster. But can Tech City survive without being part of Europe and the single market?
To offer new answers to these important questions, this article examines the durability of key components of London’s Venture Fabric: availability of talent, access to capital across stages and the density of network required to make startups scale. Insights are based upon primary data collected through a survey of London-based entrepreneurs, asking how Brexit has affected staffing, funding and the vibrancy of the capital’s venture network. Findings were triangulated by interviewing leading members of the London venture ecosystem in October 2016.
The survey results pointed to three critical arenas in which Brexit is affecting the London venture ecosystem: (1) access to talent; (2) uncertainty; and (3) access to capital. Based on the presented details, the author recommends that government set up the right regulatory environment to ensure that tech continues to be at the forefront post- Brexit, by doing the following:
- Secure access to international talent, with a focus on technical talent, through appropriate Visa systems.
- Empower start-ups to conduct international business in the new reality.
- Take action to ensure there is enough venture capital to support the growth of the tech industry.
At the same time, the onus is on the tech community to organize itself and educate the administration as quickly as possible on the needs to keep the U.K. at the forefront of tech. The start-up community should also consider approaching the underlying societal issues that triggered Brexit to begin with – it can be, and should be, part of the solution, not just of the problem.
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About the Author:
Eze Vidra – Chief Innovation Officer, Antidote.