Quick note: Brexit consequences for IT
EU to shrink as UK isles become more distant
Blog Well, I'm not an economist and even less interested in politics - but UK exiting the EU is huge. I have several friends and acquaintances who have migrated to the UK in the last few years because there are more job opportunities, meritocracy and higher wages. This could all change very soon. But this is one aspect. The other one I'm thinking of is about the IT industry from both the UK and EU standpoints.
The first problem I can see with Brexit is data locality. We already have this problem in Europe but now it's even more present. The EU is smaller and the UK has become more distant. How many European enterprises will put their data in the UK now? I'm sure less than today. Eventually, the UK will no longer be regulated by the EU and privacy laws could change and become more US friendly. Many EU countries still have a lot of restrictions about data sovereignty and locality and this will not help the UK cloud business in the short term.
Wages and skills
One of the consequences of Brexit will be to do with immigration. Currently in the EU, people can move without limitations across countries and do business wherever they please. In the future - unless some sort of free movement agreement is reached - it will be much harder and many Europeans will be forced to leave the UK. Some Brits think that this will be a great opportunity for them… and yes, it will probably be in the short term.
The problem is that, in time, demand will not meet supply and prices will go up but quality won't. Yes, you can retrain people and they can improve but, again, no one will want to do less interesting jobs like working in the data centre when they can be "cloud Architect" or "Full Stack Developer" (LOL). In any case, no matter how you look at it, this will increase costs, and nowadays this is the most valuable, as well as most critical, resource in a data centre.
European HQs in Britain… really?
What will happen to all the EU vendor HQs in the UK? I suppose the larger organisations will find a way to manage. But I'm not sure if it will come at the expense of UK employees… would you manage EU operations from a non-European country? I don't think so… At the same time, startups consider the UK to be the first EU country to start operations in for many reasons: language, market size, the nearest country to the US but already in the EU. Will it be the same in the future? Or will the UK become the 51st US state, just an extension of the US, from the sales/tech operations point of view? At this point, Northern Europe will probably be the favoured… And that goes for investments too: if you want to open an R&D site in the EU, maybe to take advantage of some EU incentives, well then…you'll have to think again.
Closing the circle
Once again, I'm not an economist, I'm just trying to use common sense here. This looks like a possible IT outcome for the UK after Brexit (I also have to add that, probably, mainland European IT will see a lot of negative consequences from Brexit too). I could be wrong and the contrary could happen: no one cares about locality in the EU, spending more to have less from human resources will become more common, and vendors will start to manage their operations differently. Or, maybe I'm right and I've just put forward three examples from a long list.
I'm an Europeanist, I like Europe and I know it has a great number of flaws... I know it urgently needs major reforms but I prefer being in the EU rather than in a smaller country. If nothing else, for the opportunities. In any case, feel free to leave a comment, this is just my opinion and I'd like to know what others think.
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