The Brexit vote on the 23rd June didn’t trigger the economic apocalypse that many at the BoE, captains of business and academics predicted. Although Sterling may have taken a bit of a mauling on the FOREX floors, this has inadvertently served to provide unlooked for trade opportunities, and earlier this week, the Governor of the BoE, Mr Carney, actually upgraded the UK’s growth forecasts for 2017.
Carney said the Bank had helped to, “make the weather” through its emergency actions to boost growth taken in the six weeks after the referendum. His comments coincided with another strong performance by the FTSE 100, and the news that Snapchat would be establishing its international hub in London.
The economic impact of Snap Inc's decision to base its international hub in the UK may be limited for the moment, with the firm's UK workforce standing at just 75 – although this will undoubtedly grow over time. The most important aspect of this announcement (along with the BoE’s readjusted growth forecasts), is the signal it sends.
It's a huge boost and affirmation of London's global reputation as a hub for tech and creative industries, and clearly indicates that post-Brexit London, with its skilled workforce, and relatively low tax rates, will remain a very attractive location for tech firms. Especially those that aren't moving physical goods across borders.
Gerard Grech, CEO of Tech City UK, commented: “We have conducted the largest ever survey of the UK digital community and at the start of 2017 it is encouraging to find the mood becoming increasingly positive. This reflects the resilience and underlying strength of our digital sector, which continues to grow and create jobs at a far faster rate than the wider economy.”
The UK tech and digital sectors received strong endorsements from US tech giants in the months after the Brexit poll, with Apple committing to its £9bn London HQ project; Google announcing plans to hire 3,000 more people across the UK and Facebook unveiling plans to create 500 new UK jobs in 2017 – Snapchat is simply the latest.
Despite the positive fiscal forecasts, the UK & London particularly, is ‘not out of the woods’ yet, and the persistent worry for tech companies seems to be the issue of ensuring an available pool of skilled staff, and its continued flow.
"London is (still) the best place in Europe to launch a global tech company," said Niklas Zennstrom, who created pioneering messaging service Skype, then venture firm Atomico. "What the UK government needs to make sure is that technology companies still have access to the best talent in the world. If (that happens) without a lot of red tape, we are going to be fine," Zennstrom added.
With Paris and Berlin vying to displace London as the home of the European start-up scene, and other cities such as Dublin, Amsterdam and Frankfurt all promoting themselves as alternative tech hubs in the face of Brexit uncertainties, Snapchat’s announcement should go some way to settling short-term nerves, before a longer-term, more comprehensive plan can be presented by the Government.
Rather than undermining the position of London, Brexit seems to inadvertently have had the opposite effect; rather highlighting the magnetism and key position of the city as a global tech, digital and creative hub. The UK, London and British companies (large and small) are well and truly open for business, so don’t be shy world!