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London To Tech Startups: Please Don't Mind the Brexit Gap (cnet.com) 165

An anonymous reader writes: The UK faces a potential economic backlash from its decision to exit the European Union, but London Mayor Sadiq Khan doesn't think tech startups should be worried. Khan on Monday stopped in New York while on a goodwill tour that included visits to Montreal and Chicago. His mission: to win back the hearts of tech companies that may be turned off by Brexit. The breakup looks bleak for tech, with nearly nine out of 10 British tech leaders opposing Brexit before the June vote. And while the effects of Brexit haven't taken hold yet, Khan remains optimistic about London. The British metropolis remains Europe's hub for the technology sector, Khan said, citing a poll commissioned by London & Partners, the mayor's economic promotional company. "London's been open to people, to trade and to ideas for more than a thousand years, and that's not going to change," Khan said Monday at the Chelsea office of workspace company WeWork. The survey reached out to more than 200 US tech executives, who believe London is the best city in which to build a startup in Europe, beating out Berlin, Paris and Dublin. While Brexit means London soon won't have access to the EU's open market across the continent, US tech leaders still choose the city for its "favorable time zones and lack of language barriers," according to a statement from the mayor's office.

London To Tech Startups: Please Don't Mind the Brexit Gap

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  • Nobody knows yet (Score:3, Informative)

    by Ed Avis ( 5917 ) <ed@membled.com> on Tuesday September 20, 2016 @01:24PM (#52924959) Homepage

    While Brexit means London soon won't have access to the EU's open market across the continent,

    Nobody knows yet whether this will turn out to be true. The negotiators may be able to cook up some deal that keeps the UK within the single market but outside the European Union (broadly as happens for Norway). On the other hand, a complete break is also a possibility.

    • by Oswald McWeany ( 2428506 ) on Tuesday September 20, 2016 @01:42PM (#52925115)

      EU is going to want to punish UK severely as a warning to others to not leave. There will be no easy access to the single market.

      • That is certainly one possibility, though I've also seen an interesting counterpoint recently: given that some other EU member states have a growing movement also wanting to leave, and given that the governments of those states can no longer hide behind the UK when acting in ways that might support doing so, some of them may have to be more open about the possibility now and may want to set a precedent the other way to prove that leaving can work without screwing everyone involved. I don't know whether that

        • by Rei ( 128717 )

          given that some other EU member states have a growing movement also wanting to leave

          Support for leaving fell significantly in other European states in the wake of the BRexit vote. The post-BRexit chaos and hits to the market weren't exactly a shining beacon.

          • That was all true in the immediate aftermath, but like the market turbulence and most of the other panic reactions in the UK, it appears the sudden emphasis on keeping the remaining 27 together may have been short-lived. I think a lot of people and businesses have woken up to the reality that this is not going to be an overnight change now, and that a lot of what "experts" and politicians of all sides were saying during the referendum campaign and its immediate aftermath has already proved to be unrealistic

            • Regardless of what happens with Brexit, the EU is still looking a lot less robust and attractive than it used to.

              Ahh bless. The Brexiters in their Cloud Cuckoo Land. They think we've already Brexited and can't imagine another decade of this.

              • Have you somehow concluded that I'm a Brexiter? If so, I'm curious to know what I wrote that gave you that impression. My position is pragmatic realism: the situation is what it is, and regardless of who voted for what or why earlier this year, the important thing now is to make the best of it.

                That means trying to mitigate any damage, though obviously that won't be completely possible. It also means trying to maximise the benefits, since obviously there will now be some opportunities that weren't available

          • Lets take France as an example. Recent polls indicate that Marine Le Pen (conservative party) has a good chance of winning next year's presidential election.
            Link here [express.co.uk]
            She has already promised a Frexit type referendum
            link here [express.co.uk] should she win.
      • Re: (Score:2, Funny)

        by whoever57 ( 658626 )

        EU is going to want to punish UK severely as a warning to others to not leave.

        I am sure that there is a desire to do this, but the simple fact is that such punishment would harm the EU more than the UK: the UK imports more from the EU than it exports to the EU.

        • by brunes69 ( 86786 )

          The UK will import more from the EU regardless of what happens with Brexit, because it is economically infeasible for them to import as much from Asia or America as it is to import from across the channel.

      • by slapout ( 93640 )

        "EU is going to want to punish UK severely as a warning to others to not leave"

        I don't think I'd want to be in a union like that.

      • Not gonna happen, for the reason of Germany alone. 50% of their Germany's GDP comes from exports in general and the UK is Germany's largest export market after the US. Germany is the core of EU and they will be desperate not to impact exporting to the UK and will be accepting of any treaties with the UK to keep the market.

        In fact about a month ago, Germany’s Minister of European Affairs said "Given Britain’s size, significance, and its long membership of the European Union, there will probably b

        • France is Germany's largest export market after the US.

          • That's true, I mixed it up. UK is Germany's #3. Still critical at the time when Germany's export are down 10% year over year.

            • What are you talking about?
              Does that [www.bpb.de] look like down 10% year after year to you?

              • "In unadjusted terms, exports were down 10 percent over July 2015."

                https://www.yahoo.com/news/ger... [yahoo.com]

                "Compared with July 2015, exports were down a startling 10 percent."

                http://www.econotimes.com/Germ... [econotimes.com]

                • So basically, you see exports of a single bloody month dropping compared to the same month in the previous year and then pull the "year after year" out of your arse. Now I understand why you guys believed the "350 millions per week" bullshit.

                  You see, in March and July 2015 Germany has exported more than in any other month in the whole German history. It was an all time high, hence somewhat difficult to repeat.

                  • So what is your point? The news reports all over are saying German exports are down, things are not looking good, "economic data that paintes a gloomy picture for German manufacturing" (http://www.2bbc.com/news/business-37316827)

                    What I'm saying is that Germany is so dependent on their exports that at the moment when the reports are negative they are not going to "punish" the UK or do anything that would endanger their economy further, Brexit or no Brexit. What are you saying?

    • it is very easy, freedom of movement is fundamental for the tech companies which relies on recruiting labour from the whole continent. This is unlikely to be possible without having to go through a lot of red tape.

      Last time we recruited from outside the EU, the red tape took close to 6 months to go through.

      • The one potential upside of that is that our government might finally have to get its act together and fix the problems that employers and non-EU workers face with our current system. Our economy could be seriously damaged if a similar burden is imposed on EU workers once they're all in the same boat, and in any case, a clearer, more efficient, more accurate system than the current mess would be a benefit to everyone involved.

      • by tsqr ( 808554 )

        it is very easy, freedom of movement is fundamental for the tech companies which relies on recruiting labour from the whole continent. This is unlikely to be possible without having to go through a lot of red tape.

        Last time we recruited from outside the EU, the red tape took close to 6 months to go through.

        The Schengen area and the EU are different things. Does Brexit mean the UK is backing out of the Schengen treaty?

        • The UK isn't within the Schengen Area anyway.

        • it is very easy, freedom of movement is fundamental for the tech companies which relies on recruiting labour from the whole continent. This is unlikely to be possible without having to go through a lot of red tape.

          Last time we recruited from outside the EU, the red tape took close to 6 months to go through.

          The Schengen area and the EU are different things. Does Brexit mean the UK is backing out of the Schengen treaty?

          UK is not in shengen

          • by Hadlock ( 143607 )

            I had to ask Gibraltar "immigration" for a passport stamp on the way in, and on the way out back to spain... well it was after 6pm so they'd gone home for the day, I just walked out through their vacant office back in to the schengen area. UK might not be schengen area, but you'd be hard pressed to find it fully enforced.

            • I had to ask Gibraltar "immigration" for a passport stamp on the way in, and on the way out back to spain... well it was after 6pm so they'd gone home for the day, I just walked out through their vacant office back in to the schengen area. UK might not be schengen area, but you'd be hard pressed to find it fully enforced.

              Maybe in Gibraltar.

              I travelled from Eastern Europe to the UK by bus. We passed through about 6 countries but you wouldn't know it until it came to the ferry across from France it was like going to another country!

        • Re:Nobody knows yet (Score:5, Informative)

          by Zocalo ( 252965 ) on Tuesday September 20, 2016 @02:25PM (#52925519) Homepage
          The UK isn't in Schengen, so that's moot - there's a difference between not requiring ID to cross borders (Schengen) and needed to go through EU immigation controls at the border (non-Schengen) too. Now that the EU has us over a barrel however I'm sure some of them - like the Visegrad Group, or V4, (Czech Republic, Hungary, Poland and Slovakia) - might just try and insist that we adopt Schengen if we wish to have continued access to the EEA free trade area.

          On the subject of the V4, their position does perhaps make how things are going to end up a little clearer to predict - provided that they are not just bluffing. Basically, they have promised to veto any Article 50 agreement that doesn't continue to allow free travel (with ID) for their citizens to the UK, as is currently the case. Any Article 50 agreement requires a unanamous vote in favour - all 27 remaining countries - so the only agreement V4 wil accept is a *very* soft exit, which simply won't be acceptable to Leave supporters. Likewise any extension of the two year period requires all 27 nations to agree which is equally unlikely so, two years after the UK invokes Article 50 whenever that is, it defaults to a hard exit with no trade agreements in place - the UK ceases to be member of the EU and becomes just another country with no established trade agreements in place.

          That will no doubt make many in the Leave camp very happy... until the implications of having all the EU's trade treaties become null and void and WTO defaults kicking in strike home because they really, really, suck - why else would governments spend so much time negotiating treaties with each other? If we're lucky, we'll have that covered by getting an agreement to maintain the existing EU trade agreements as an interim measure as a stop gap, but if we end up in WTO defaults with one or more of our major trading partners, we're basically screwed - something even Pro-Leave groups concur with. [leavehq.com]
          • by AmiMoJo ( 196126 )

            Adopting Schengen would be the absolute best case outcome for the UK, I really hope they can force us to do it. At the moment using EEA treaty rights is the only way a lot of people who married foreigners can get their families a visa.

            Some Brexiteers promised that it would get easier for people married to foreigners, but the week after the result one of them was on Newsnight (BBC TV programme) reneging on it. The good news is that David Cameron's reforms which would have made the EEA route difficult to use

          • Basically, they have promised to veto any Article 50 agreement that doesn't continue to allow free travel (with ID) for their citizens to the UK, as is currently the case. Any Article 50 agreement requires a unanamous vote in favour - all 27 remaining countries

            This isn't quite correct. An article 50 agreement requires, iirc at least 50% of member states representing at least 66% of the EU population.

            However, I think disconnecting access to the free market from freedom of travel does require unanimity. That'

        • "freedom of movement" != "absense of border controls".

          The UK has never been part of the Schengen area but thanks to EU freedom of movement rules an EU citizen can show their passport or ID card at UK border control and except in highly exceptional circumstances* they must be let through. They can stay as long as they like and they can take a job in the UK without any additional formalities beyond what a UK citizen would need.

          Contrast this to say an american. If they want to visit the UK they must convince t

    • by Anonymous Brave Guy ( 457657 ) on Tuesday September 20, 2016 @01:50PM (#52925179)

      More than that, it will still be possible to sell almost anything to European customers anyway. The worst plausible outcome for trade with the EU is probably that we fall back on general WTO agreements for a while, in which case we're mostly talking about tariffs here. Those are going to be relatively small by the standards of startup culture where you're looking for unicorn-level successes anyway, though they could conceivably be more of an issue for regular businesses in tech sectors if the EU decides to be obstructionist in any future trade deal.

      There may be some regulatory hurdles, but in fields like IP and data protection our laws are obviously already aligned with the rest of the EU, so there's unlikely to suddenly be some big compliance burden unless the government shoots itself in the foot by trying to soften protections to appeal more to the US tech sector. YMMV if you work in a field like biotech.

      The bright side for UK tech businesses, particularly smaller ones and startups, is getting rid of a lot of silly EU regulations passed in recent years, the things that say you have to put cookie warnings on your site, or if someone buys a digital download from you then by default you mustn't actually supply it for 14 days in case they change their mind, or that you have to apply different VAT rates and rules for customers in every different member state you sell to (which can change at literally a few days' notice, which no-one will actively give you) and file special returns accordingly. These poorly implemented regulations cause significant overheads for small businesses who want to be spending their time building useful things instead, often for no real benefit to anyone or even actively annoying customers, and the sooner we're rid of them the better.

      There will certainly be downsides, probably including significant economic harm in the short to medium term, from Brexit. If we're going to do it, let's at least try to take advantage of the upsides as well.

      • by jabuzz ( 182671 )

        The problem with falling back on WTO rules is that the UK is at this point in time not a signatory in it's own right to the WTO and cannot take up a WTO membership in it's own right until *AFTER* it has left the EU. If you are stupid enough to believe that you can leave the EU on Monday and join the WTO on Tuesday I have a bridge to sell you, currently in use over the Firth of Forth, needed some repairs recently but we have a shiny new one opening next year so it's going spare.

        • Technically, the UK can't negotiate much of anything with other international partners until after it's left the EU, but if you believe the interested parties are going to sit around for 2+ years until the official Brexit before starting to talk then I'll sell you that bridge right back.

      • But you will not get the nice tax rates. UK financial services will no longer be competitive. London will drop on the world stage.
        • I think we're talking about different things here. The EU changed the VAT rules last year to do exactly the opposite of what a common market is supposed to do, so instead of being able to trade internationally under the same rules across the whole market, which was basically the situation before, a lot of businesses now have to be aware of all the local rates and rules in every member state.

          There is so much overhead involved as a direct result of that change that a lot of microbusinesses had to stop trading

      • Re:Nobody knows yet (Score:5, Interesting)

        by AmiMoJo ( 196126 ) <mojoNO@SPAMworld3.net> on Tuesday September 20, 2016 @11:41PM (#52928859) Homepage

        The company I work for exports a lot of stuff to the EU and the rest of the world. Exporting to the EU is much, much easier because the rules are harmonized, and so there is a lot less paperwork and dealing with import tariffs and an office in one country and server other EU member states near it easily enough. Outside the EU things get tricky, especially when trying to move hazardous materials like lithium batteries.

        After Brexit our laws are likely to diverge from the EU. After all, what is the point of "taking back control" if they don't? I imagine data protection will be weakened fairly quickly, to allow for greater domestic spying and access to browsing history and email by local government and random agencies like Trading Standards. If you read the submissions made regarding the Snooper's Charter, you can see that they are chomping at the bit to violate your privacy. Human rights and employment law will be gutted too, to make us more "competitive". The race to the bottom is just getting started.

        More over, we are going to have to adopt US and Chinese standards to get the trade deals we need. Being only a small player we can't dictate terms any more, we will just have to adopt their rules in much the same way as we have to adopt the EU ones.

        • Those are all very reasonable concerns, and to some extent I think I share them all, though I'm less pessimistic in some respects than you seem to be.

          While a lot of the EU regulations affecting online businesses are awful, some of the regulations dealing with physical goods seem more relevant and keeping in compliance with them must be advantageous for businesses in those markets. There's no doubt that this is a loss if a good alternative arrangement can't be found before Brexit.

          There is also definitely a d

  • by OrangeTide ( 124937 ) on Tuesday September 20, 2016 @01:27PM (#52924983) Homepage Journal

    If tax evading tech companies are sick of being dragged through European courts and fined hundreds of millions of euros, perhaps they should welcome Brexit with open arms. Imagine, a small island nation that will be easily influenced by promises from corporations to win votes for the politically ambitious. Everything is up for negotiation in the UK.

    Brexit means that the UK can be the new America for these tech companies.

    • by jiriw ( 444695 )

      Sure, go right ahead. All England and Wales have to do to make this break really quick and (iron wall-like) permanent is pull a stunt like Ireland did, tell the rest of the EU about it beforehand (or not) and that the EU can, taxes concerning, go eff themselves. The rest of the UK isn't really sure about brexit yet - they are keeping all options open, including secession from the UK.
      I'm pretty sure the UK politicians know that themselves as well, especially those (who were) pro-brexit - when you look into t

    • by T.E.D. ( 34228 )

      Imagine, a small island nation that will be easily influenced

      Were we actually short on those already?

    • If tax evading tech companies are sick of being dragged through European courts and fined hundreds of millions of euros, perhaps they should welcome Brexit with open arms. Imagine, a small island nation that will be easily influenced by promises from corporations to win votes for the politically ambitious. Everything is up for negotiation in the UK.

      Brexit means that the UK can be the new America for these tech companies.

      This! Also, companies that are unhappy w/ UK leaving the EU - as mentioned in the summary above - have so many choices - from Lisbon to Athens, and from Rome to Stockholm. In the meantime, companies that don't like the EU's Byzantine labyrinth of regulations can go to the UK to set up shop.

      Win-win for everybody!

      • Well companies that move to the UK probably won't have to pay a fair share of taxes, so I don't think it's a win for the UK.

        But for business it's probably a win, assuming we didn't trigger another financial collapse.

    • I don't know of any tax evading company that has been dragged through the EU court. The only thing I know of is an EU court ruling some tax agreements illegal, but that is entirely between the company and whichever country they made the dodgy deal with.

      • Several companies owe billions in back taxes, according to an EU commission. I think we agree there.
        I don't know what threshold you have set for the definition of the colloquialism of "dragged through court", but you're the one that is being unreasonable here.

    • by AmiMoJo ( 196126 )

      If we become a tax haven the EU will just put even more tariffs and restrictions on us. That's where the EU is heading.

  • > nine out of 10 British tech leaders opposing Brexit before the June vote

    Yeah It had little/nothing to do with potential markets. It was all to do with holes in the UK labour laws meaning that companies based there could continue to replace local skilled workforce en masse with cheaper foreign labour, which was a practice already illegal in most other EU countries.

    • Cheaper or better? In the tech sector, especially niche stuff or startups you want the best people, not just the best people from the same country as you. If you don't get the best your competition will.

      • by JustNiz ( 692889 )

        Cheaper. Definately cheaper. In my experience nearly all managers, especially non-techincal ones, simply assume that all developers have the same productivity, quality, and are plug-and-play.

  • I used to travel to the UK quite regularly, in the 80's and some in the 90's. I would not recognize it now, in many ways. they have gone so far into the nanny state and citizen spying, I would never voluntarily move to england and I don't even really want to fly there anymore.

    england has jumped the shark and they have so many problems, it would be absurd for a new tech company to move there. the only reason would be for localized business or to have local feet on the ground. but to start a tech company

    • I used to travel to the UK quite regularly, in the 80's and some in the 90's. I would not recognize it now, in many ways. they have gone so far into the nanny state and citizen spying, I would never voluntarily move to england and I don't even really want to fly there anymore.

      I was in the UK (where I grew up) for a vacation with my wife, who had never been there before and is from a former HARDCORE communist country. She was amazed at all the cameras and surveillance everywhere, even in the public toilets (she was shocked at how filthy they were, even near Buckingham Palace and having to pay to use these filthy toilets).

      The most observed population outside of North Korea.

      Before Brexit I had a hard time imagining living back in the UK. After Brexit and the vacation I know for sur

      • True story... I was offered a very good permanent position in the UK 18 months ago, basically manager-level salary and sign-in bonus for a senior technical position. Relocating to an English-speaking country would have made life easier for my wife, but it would have meant really long commutes because of real estate prices in that part of the UK... and also because the London area depresses me if I stay there more than a couple of days. I ended up turning down the offer because it was a couple of hundred qui
  • Khan!!!!

    --- Captain Kirk
  • by hey! ( 33014 ) on Tuesday September 20, 2016 @02:22PM (#52925505) Homepage Journal

    Which is kind of contingent upon being part of Europe, economically and administratively speaking.

    Life is about tradeoffs, and of course nobody can decide for other people whether the tradeoff is worth it. So if Britons want Brexit, fine. But rejecting one tradeoff means accepting another one; in return for being freed from all the annoying EU stuff, they'll have to pay a price. Insofar as they don't pay that price, then the substance of all that annoying stuff is likely not to go away. So suppose you're a US company interested in the Continental market, not just the UK. The best you could hope for would be the reestablishment of a more complicated version of the status quo.

    The uncertainty is such that only a fool would bank on London maintaining its role in the EU. That might happen, or it might not. But either way if you're an American company, well, educated Germans usually speak very good English, often better than the average American does. The central location is also a little more convenient for operations, so locating in Munich is like putting your US HQ in Chicago.

  • "citing a poll commissioned by London & Partners, the mayor's economic promotional company"

    As Slashvertisements go this one is a bit more like news BUT it's still PR. Of course the Mayoral commissioned poll is going to show whatever the Mayor needs it to show. And of course the papers are going to let the Mayor get in all of his sound bites as he scrambles to lessen the impact Brexit will have on his people (bottom line).

    Meh...

  • KHAAAAAAaaaaaaaan!

  • "While Brexit means London soon won't have access to the EU's open market across the continent, US tech leaders still choose the city for its "favorable time zones and lack of language barriers,"

    The same can be said for Ireland which has and will have access to the open market.

    • by Xtifr ( 1323 )

      As an American, I think that describing the UK or Ireland as having "a lack of language barriers" to be hopelessly naive.

      "The United States and Great Britain are two countries separated by a common language." -- George Bernard Shaw

      I wouldn't be a bit surprised if Germany had a higher percentage of people who are fluent in American English than the UK or Ireland. :)

      Anyway, according to the EU, Ireland speaks Irish Gaelic, and when the UK leaves, there will no longer be any officially-English-speaking countri

  • BBC Top Gear was your spokesmen

    https://www.youtube.com/watch?... [youtube.com]

    - OR - Top Gear Christmas Special 2011

  • Because it impedes the supply of cheap Eastern European and refugee labor. They'll have to survive by *gulp* innovating and reducing the amount of hookers, coke, and trophy wives they buy.

  • I personally believed that brexit would pass.

    It actually opens up a path for global EU reform. Things such as a particular country ability to override particular EU laws and regulations but with certain proportional financial penalties that ramp up over time; and or phase in's. And immigration reform. Namely the right of countries to refuse new immigrants. (If a country chooses to adopt a new immigrant they should stay in that country for years to adapt and prove they are civilly minded; I say 10 years. You

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