Britain's got tech talent (for now): Top VC firm warns Brexit risks UK's crown

Lynsey Barber
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Access to talent and skills is a top prority for startups (Source: Getty)

The UK's position as the tech capital of Europe is at risk of being lost to rivals if it fails to secure access to talent and skills in Brexit negotiations, a top investor has warned.

Nearly a third of European startups call the UK home, a share that could fall "dramatically" while other countries grow, leaving the country on an almost even footing with France and Germany.

The research from Balderton Capital, backers of top homegrown tech companies such as Lovefilm, Betfair and CityMapper, estimates the country's share could fall from 31 per cent to 24 per cent, while France and Germany's share grows from under 20 per cent now to 23 per cent and 22 per cent, respectively.

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The venture capital firms research found around a fifth of workers in the tech sector are born outside of Britain. Last year 41,000 non-UK workers were hired, nearly double the quota for skilled immigration visa's which are needed for those outside the EU wanting to work across all sectors in the UK, signalling the importance of migrant talent to the sector.

"London, together with Paris and Berlin, dominate the tech scene in terms of employees and investment today. London in particular has benefited significantly from migration, with over 40 per cent of the tech companies founded last year having at least one non-native founder," said Balderton partner James Wise as the third TechCrunch Disrupt kicked off in the capital.

"But the relative weakness of the pound since the referendum vote, together with developer’s willingness to be mobile and work in smaller tech hubs, could reduce the relative advantage the capital enjoys without proper policy support post-Brexit.”

The number of people employed in tech as software engineers in the main hubs of Europe - London, Berlin and Paris - was found to be almost the equivalent to the number in Silicon Valley - 555,000 versus 564,000.

London remains the most popular destination for developers looking to work abroad, but, across Europe, founders said it was increasingly difficult to hire skilled staff with wait times of up to 20 weeks. The average cost to businesses was found to be £5,000.

The government made several tech-friendly pledges in the Autumn Statement, including a £400m cash injection for UK venture capital, however, there are still concerns among the industry that it has not addressed the biggest issue; access to talent.

While developer pay was not the highest in the UK, it was competitive, ranking the fourth best location for salary of 15 countries with an average annual salary of $70,500 (£55,363).

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The venture capital firm also identified that tech workers are increasingly cutting their teeth at major firms or well-known startups, with half having worked at one of these before, while 10 per cent were found to have come from a finance background. In the UK, staff at startups were found to have come from IBM, Hewlett-Packard, Microsoft, Google and Yahoo.

Meanwhile, the University of Cambridge, Oxford, Imperial, Edinburgh and Manchester universities were found ot have been the most common places for education among tech workers in the UK. Of the 40 per cent of founders who didn't study in the UK, Insead, Harvard Business School, HEC Paris, University of Pennsylvania and Wharton Business School were found to be the biggest sources of education.

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