Fast-growth businesses believe Britain won’t Brexit

By Jamie Beare on Tuesday 21 June 2016

Opinion

With the opinion polls on whether or not we will leave the EU seeming to change almost hourly, we wanted to see what the fast growth companies that have successfully raised funds through VentureFounders think.

These are the companies that have the potential to be the future of UK PLC and grow their UK businesses overseas. They offer a good indication of whether a Brexit will pose a risk to their success and therefore whether the future of the UK economy will be shaky if we leave (or remain in) the EU.

Despite the brief swell of support for the leave campaign over the past few weeks, I can exclusively reveal that our poll of companies shows that the majority of respondents think that it is unlikely that the UK will vote to leave the EU on 23rd June. This is quite telling. For fast-growing and disruptive businesses, I suspect that their ambitions mean they want the EU door to remain open with as few barriers as possible to their growth. The businesses that we polled mostly felt that it was very important to retain the UK’s membership of the EU.

Dig a bit deeper in to the issues and it starts to reveal some interesting divergence of views.  

Nearly all the respondents to our poll think that leaving the EU would have a negative impact on their business, with only 14% saying it would have no impact. They cite the following as their reasons for the negative impact: economic disruption, fiscal uncertainty and volatility and potential prejudice against UK companies.

Interestingly, when asked about the specific areas that could be impacted, there was much more variety in the responses. 

  • There were very divided opinions about their ability to negotiate trade in Europe, and the ability to attract international investment – half believing that these areas would be highly affected and half believing there would be no effect on overseas investment.
  • However, there was a general consensus that their ability to expand into Europe would be highly affected.
  • The final area where there was a real difference of opinion was on sourcing talent. 28% felt that their ability to source talent would be very highly affected. The rest thought that this would not be affected. The type of industry and skills requirements clearly has an impact with certain sectors being much more dependent on talent drawn from outside the UK.

The recruitment of talent into fast-growth UK companies is an interesting point to debate. On the one hand the UK is regarded as having a highly educated and highly skilled population, making it a very attractive hub. An EY Report earlier this year found that the Fintech sector, for example, is currently well served by a very good pool of talent but that “In the UK, we need to find a way to develop more home-grown tech talent: coders, developers and engineers – that starts with better training in high school. If not, you’ll see more FinTechs outsourcing their needs for tech talent to Poland and Germany”. Indeed, a report just published by Parliaments science and Technology committee suggests that the digital skills gap alone costs the UK £63bn in lost GDP every year. It seems that whether we stay or leave, there is a skills gap that needs to be addressed because even the Tech Nation Visa scheme, which was relaunched with the aim of attracting talent from outside the EU has, as of Jan this year, received just 37 applications, according to Business Insider.

The emerging picture regarding the sourcing of talent from outside the UK is a complex issue and a hot topic in the debate. Businesses will want to be able to attract, recruit and retain the best talent for their businesses regardless of continuing to be a member of the EU or not. Overall, there is a clear view from our portfolio of fast growth UK companies, they are strongly in favour of staying in the EU and believe that we will.

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