With the UK’s departure from the European Union set for 31 January 2020, we take a brief look at what is known about how technology and the technology sector may be affected in a few key areas.
Predictions and Warnings
Since the June referendum vote of 2016 led to Brexit, there have been many predictions about what this would actually mean for technology. However, the pandemic and the need for businesses to adapt quickly to survive put thoughts of Brexit on the back burner. With many businesses now getting used to ways of working around restrictions (home working), mass vaccination on the horizon, and leaving the EU less than two months away, we discuss Brexit predictions and warnings, discussing some of the tech areas that businesses are beginning to think about again as the deadline looms.
Back in January, the director of strategic policy at the Information Commissioner’s Office (ICO), Jonathan Bamford, urged businesses to prepare for a no-deal Brexit in terms of planning to stop interruption in data flows from Europe due to the fact that three-quarters of the UK’s cross border data flows are with EU countries. This was a reference to the fact that the UK will become a ‘third country’ because it falls outside of the GDPR zone (EU member states plus Norway, Liechtenstein and Iceland) and GDPR restricts transfers of personal data to third countries. The UK, therefore, still needs ‘adequacy agreement’ from the EU to provide a level of protection equivalent to that of the EU. This would allow data to flow into and out of the EU without the need for other safeguards. If there is a no-deal Brexit and is there is no adequacy decision in place for some time, businesses and institutions may find themselves having to use alternative legal mechanisms that could be bureaucratic, costly, and could cause delays.
Organisations that receive data from Europe and that use cloud services based within the EU may need to think about what risks and disruption they could face if no adequacy agreement is in place, and what other mechanisms and agreements they may need to seek. This could include:
- Finding out where company data is stored and who has access to it.
- Perhaps renegotiating data services supplier contracts.
- Global organisations operating in multiple jurisdictions may need to look at how data is transferred within their organisation and whether corporate rules need to be changed.
- Organisations may need to look at where their riskiest and/or more important data transfers are, and plan to get Standard Contractual Clauses (SCCs) implemented i.e. contractual forms approved by the EU Commission as offering adequate protection for the personal data of individuals.
- Some of the other best measures that UK small businesses that send and receive data to and from Europe can currently take are to make sure that they really do comply with GDPR, and to review privacy information and documentation to identify any minor changes that need to be made at the end of the transit. More information can be found from the ICO website here: https://ico.org.uk/for-organisations/data-protection-at-the-end-of-the-transition-period/data-protection-at-the-end-of-the-transition-period/
People and Skills
The UK has suffered from a tech skills shortage for many years and the Brexit result led to fears that skilled tech workers, many of whom may have come from overseas, may decide to leave, and that employers would find it difficult to attract new skills compared to other countries e.g. the U.S. Back in January, for example, a TopCV report found that 16 per cent of UK tech employees said they were planning on leaving the UK and their current job to advance their career due to Brexit, and it looked as though the media and design sectors could be most affected by employees leaving as a quarter of professionals in those sectors said they were planning to head abroad.
The pandemic has severely curtailed all global movements and back in the summer, the Japan Times speculated that the confidence gained by UK companies through learning that they could still work effectively having a remote workforce may influence how they’ll approach recruitment after Brexit e.g. executives having roles local to headquarters, but other roles being based elsewhere.
Other commentators point to the fact that the UK already has five of the top 20 European cities for technology – there were large numbers of tech start-ups in January, and Facebook, Apple and Google had set up HQs in London, giving a promising sign of the UK’s tech future beyond Brexit.
Re-skilling and up-skilling from the existing workforce, and a promising number of home-grown graduates moving into the burgeoning AI sector in the UK have also been suggested as positives beyond Brexit, but how immigration laws in the UK post-Brexit affect recruitment from overseas is still a concern. The fact is that after 31 January, the UK’s immigration system will end the free movement for European citizens and will also bring the rules for EU workers in line with those governing non-EU citizens. This will mean that EU workers will face job, salary, and language requirements and that those companies attempting to hire new tech workers from outside the UK will need to try and understand some of the key requirements in order to help ensure the success of their recruiting processes.
The pandemic has brought the importance of supply chains into sharp focus as global restrictions caused widescale disruption. Predictions about Brexit, prior to the pandemic suggested that UK tech companies may have rushed into trade completions with solution suppliers during the transition period thereby increasing the need for checks on supply chains to stop mistakes from being made. At this late stage in the Brexit process, after so much disruption to supply chains, some supply chain businesses closing and companies having to quickly find new supply chain solutions, supply chain auditing is an important issue for business. It is likely that UK businesses will face more stringent and thorough supply chain auditing processes after Brexit and will need to be prepared for this challenge.
One example of how technology feeds into trade and supply chains is in haulage and logistics. Unfortunately, in September, it was revealed that critical IT systems needed to avoid border disruption post-Brexit were behind schedule, raising the threat of border chaos for hauliers. These ten IT systems included the web-based Smart Freight Service for managing customs declarations for the movement of food and medicines. Concern remains that too few systems are operational and that there may not be enough time to train users on the systems.
Reviewing, auditing, and planning your business supply chain with a view to how Brexit will affect it at the end of January is an important consideration. A supply chain checklist can be found here: https://readyforbrexit.co.uk/supply-chain/
There are, of course, numerous other important technology areas on the Brexit and post-pandemic horizon e.g. a changed business environment and changed industries, new economic constraints due to economic and market damage, the influence on possible trade deals resulting from administration change in the US, re-structured workplaces and working methods, continuing physical travel limitations and advances in the use of the cloud and online platforms for business. Although beyond the scope of this article, how technology’s role will develop in these and other areas is important and something to consider going forward.
Much business planning this year has been devoted to survival, dealing with rapid change and uncertainty, and adapting to ensure effective business continuity. Brexit, however, is less than 2 months away and with technology playing a greater role than ever in our lives, how it will be affected by and the part it will play in shaping post-Brexit business will soon become much clearer. One thing that the pandemic has done is to add perspective to the idea of Brexit and with the many serious challenges that businesses have faced over the last year, this is likely to be another significant challenge that must be met and overcome.