Is Brexit the Y2K of this generation?
‘It's a very good question. I think you can look at it from a few angles. If I've got my ‘tech supplier hat’ on, in my view, Brexit is undoubtedly a tipping point because we’ve basically spent the last several years growing a very vibrant UK technology sector. We've managed to attract a lot of European headquarters here from global tech companies (largely based in and around London) which has fuelled an influx of skills into those companies both from our own nationals and from European colleagues moving to the UK. Secondly, our amazing universities and our own home-grown tech companies have nurtured a lot of talented people within the tech sector; from larger companies through to SMEs and the creation of a meaningful scale-up community. Together, this has resulted a really vibrant tech sector within the UK. Brexiting does bring challenges.
‘The worry is not that we don't care about the technology sector in Britain, but there's so much to do with Brexit, are we going to get the right focus on it? Yes, we have home-grown skills and talent and lots of it, but it's actually been crucial to be able to attract additional talent from Europe in to some of this industry within the UK; being within the European Union freely allowed this. Also, it's been easy to keep [UK] talent working in the UK, because those skilled technology professionals have had choices with both UK companies and global tech companies.
‘My concern is that our reliance on bolstering our own talent through European recruits might get lost within the complexities of Brexit and trade deals. Some of our ability to attract global technology companies into the UK as a gateway to Europe will also be removed. So, my worry is the digital momentum that we've created could, without the right government focus (including on the digital tax regime as well), falter. Talent, both our own home-grown talent and the international talent we’ve attracted here, might migrate elsewhere.’
One in three IT professionals are from overseas. Do you fear Brexit will change that?
‘I wouldn’t say I share the fear of a mass exodus, but equally I do feel trepidation about the unknown and the pressure that places on individuals to make choices whilst trade deals take place and laws change. It’s always been clear to me that we have both our UK talent and EU citizens who are very talented on the tech side. I really do believe that the government understands that and I hope that means there will therefore be the right focus for our immigration policies. However, it's this period of uncertainty that is one of the worries because it could mean people will vote with their feet.
‘I would like to think that post-Brexit, we will concentrate on looking after technology skills as a key area. If we look at AI and cyber, we are regularly cited as one of the leading countries in these areas. We just cannot afford to lose that; I hope government will recognise that and act now.’
Do you think a dearth of good IT professionals will mean higher salaries? Or more outsourcing abroad?
‘I hope that there won’t be a dearth, but I do think there will be less choice of IT professionals for business as a result of Brexit, at least for an initial period. I suppose higher pay is a possibility, which actually has pros and cons. Pros for the people as they get more senior but actually, arguably then maybe less choice of where to go in the future.
‘As for outsourcing, as a person who helps clients with global tech outsourcing and tech deals that are a mix of both onshore and offshore, I think that UK business will still expect this mix of on-shore and off-shore from their service providers. I think the real question is, what skills do we need to keep our very high quality on-shore tech practices at the forefront? So business can demand the right mix of on-shore versus off-shore for its technology outsourcing solutions without pricing or skills being the barrier.
‘To my mind, it’s not all about the price - it’s about the skills. We do rely on quite a lot of non-UK, EU professionals. That is why I keep going back to immigration and a good policy around keeping that talent pool here, both for the short-term (crucially) and beyond. It will be critical to really focus on growing the stem skills in schools and universities here, too. We need to focus on STEM subjects and ensure we’re really investing in our digital future. Government also, in my view, would do well to ensure more money is invested into our digital companies given the talent we have in the country. I know there's obviously a lot for the government to spend its money on, but I do think that they could spend more on the digital agenda and that, that would pay dividends.’
When we voted leave in 2016, the current apprenticeship scheme was in its infancy. Do you think the new on-the-job training will go some way to growing our own talent in future years?
‘Britain does have really good rules and laws around apprenticeships and I think we've got a lot of success stories. I think we need to champion the digital success stories more because you don't hear about them that often and, actually, I know BCS is doing great work, but that is pretty critical now.’
Do you think AI will replace a lot of the less skilled or monotonous roles?
‘The future the work is changing. The landscape has already evolved recently to include much more machine learning (ML) and robotic process automation (RPA) in business. I have worked on around 10 of these projects myself in the last 18 months, for example. I foresee much more application of ML and RPA solutions to business in the next 12-18 months and beyond. More reliance on true AI will come too, but progress is slower there. The net effect is, undoubtedly, a need for different skills.
‘In May 2019, Amber Rudd stated that AI and automation will allow for more creative and less repetitive jobs in the future. This is, in many ways, correct. AI and automation is undoubtedly set to disrupt and re-shape the labour market, both in the UK and throughout the world. Automation and AI can and will continue to perform many lower-skilled jobs. So far, these technologies are less successful at mimicking emotional intelligence and so it follows that we will see a shift in work for humans, which lends itself to areas where emotional intelligence, cognitive creativity and personal relationships are key; such as creative, coaching and caring roles. And there will be a significant rise in new job roles - including ethics officers, data scientists and the like. Whilst some people will relish the chance to re-skill and/or be more creative (and we are already seeing this in many roles), what must not be under-estimated is that the level of re-skilling is more significant for some.
‘It is right that the UK and many nations have reinvented themselves through previous ‘industrial revolutions’, taking advantage of the new wave of technology will involve significant focus on helping people gain the skills needed to work in the AI and technology industries or, for more repetitive jobs that are under threat, to retrain and/or re-skill. We can’t forget that we have seen industrial action where technology has replaced workers in the past. This is not new; we have seen businesses automate within the UK and beyond and workers successfully upskilling or retraining and we have seen this with outsourcing and off-shoring, too. ML, RPA and AI are here to stay.
‘Undoubtedly, AI will bring many positive benefits to the world, whether in the sphere of healthcare, sustainability, increased food production and beyond. However, people do need reassurance and support. Of course, change will create fear for some. As a nation, we must invest heavily in our future strategy for work, including education, re-skilling, training and more. We must also ensure employment, taxation, ethics and other laws and regulation support these changes, too. There is already significant focus on the new laws and ethics needed to support this change. And we are beginning to see investment in education to support this change. However, there is much work to do and significant investment and focus needed.
‘Actually, reskilling dovetails nicely into apprenticeships as we discussed earlier. There is a great opportunity, here, if we seize it to teach the skills needed for these technologies.’
In seizing the opportunity with a US trade deal, do you think taxing the big tech companies more in the UK will hamper us getting a good deal?
‘That’s a very tricky question. As a firm, our tax team advises quite a lot of technology suppliers and of course customers too, so we spend a lot of time focused on digital tax. The whole world is looking at how they tax the digital economy. ‘There's no doubt that the way in which a country taxes not just tech suppliers but taxes generally will motivate - to some degree - a company’s choice on where to base their office(s). Of course, it is much more complicated than that and skilled labour is obviously a key factor as well as the regulatory environment.
'The UK has not been the cheapest country, in terms of its taxation regime, for many years and still lots of tech companies have set up their European headquarters here based on other factors. The UK is a very attractive place to work, live and the tax regime arguably has been pretty sensible. Although tax is obviously a key consideration, there are plenty of other variables which will influence where to base a company.’
Potentially, a number of American companies have chosen to come to the UK because we have a clear regulatory regime, are English-speaking and had a clear link to Europe. How might Brexit affect that?
‘One of the critical things that doesn't get talked about a lot in the press is that the UK is a big consumer of tech, so regardless of being a hub into Europe, companies will need to have a base here to sell to us. It will be interesting to see how many companies maintain a big hub here but move some of their operations to Europe. Frankly, aside from financial services, I haven't seen a lot of that coming to fruition yet.’
Do you think there will be more shell companies based in the EU, while the real hub stays in the UK?
‘Global tech companies generally already have bases in most of the countries in Europe already, with strong hubs in more than one of them. I don’t think that will change. The key question is where is the strategic team going to be based? We have a lot of talent within Britain, so people aren't going to just move their companies for the sake of it or their strategy. But there will be more reasons to look at European options beyond the UK when setting up a new hub - we may not [be seen as] the same door into Europe we once were depending on where trade negotiations get to and how we deal with European versus UK law.
‘In the press at the moment, there’s quite a lot about not adopting EU rules and talk that we will change our laws. There are a lot of good EU laws and there are a lot of good UK laws. I think we just need sensible laws. While there are pros and cons to countries having different laws, I think from a tech company's point of view, the more different laws there are across countries, the harder it is to comply and, ultimately, that can be more costly for business.
‘Whether this has been a conscious thing for the UK knowing that Brexit was coming through, we have started seeing more divergence around tech laws between the UK and Europe than I had ever seen in my 20 years career as a tech lawyer. Not complete divergence yet, but nuanced versions. To give you examples: we had separate but complementary consultations and voluntary guidance around AI and cyber in the last two years between the UK and Europe. I think that's been quite unusual and possibly sowing the seeds for future divergence. However, they are all quite complementary and I suspect that will continue. This is good for business. Too many divergences are expensive and complex for business.’
While there may be changes to location and taxation, will the UK change privacy laws as against European law.
‘This is already under discussion with a UK version of GDPR. This should not have revolutionary change. If the UK wants to trade with the rest of the world, it is quite sensible to have a high bar on privacy to keep up with the harder standards. However, there is a lot of complexity around international transfers of data (essentially whether the UK can export personal data to Europe). I hope a sensible position will be reached in this area to allow simple export of data moving forwards but this is certainly not clear-cut yet.’
Do you think we’ll have new laws governing facial recognition?
‘Yes, undoubtedly, across the world. It is already happening with very divergent views being taken both at country and, within the US, even at state level. Data protection laws for the UK and for the EU already cover biometrics, which includes facial recognition. Globally, we’re seeing a lot of different laws on biometrics and facial recognition and more coming through all the time. There is a large debate in this area between the benefits and the impact on personal privacy and civil liberty. This debate is likely to continue for some time.’
While I welcome the use of biometrics to prevent terrorism and protect our civil liberties, I worry they could be used for unwelcome marketing. What do you think?
‘Personalised marketing as you walk does sound like Blade Runner 2049. But personalisation is a personal choice. I like it. I am time poor, have nothing to hide and love technology so I love personalisation. But even then, clearly the data captured has been, in the past, shown to be used in ways that were not intended. This must not be allowed to happen again. Trust needs to be rebuilt. Even then, for those that do not feel as I do, the difficulty is how can they opt out of this usage given the way it is most easily deployed. And so, the debate will rage on.
‘This also then flows into protection around terrorism. Is it excessive to capture hundreds or thousands of peoples’ data in the pursuit of protection against terrorism? Again, the debate is raging on in this area and again it is a personal debate. For me, it is a ‘no brainer’ if our data can be assured and protected. But that is my personal view. It will be interesting to see where the laws land here as many regulators do seem to be siding with the need to protect the privacy of individuals.’
Are you optimistic about the future, post-Brexit?
‘As a country and at government level as we move into our post Brexit phase, we need to keep the spotlight and our focus on our impressive technology sector; to ensure we have the right laws (not simply changing them for change’s sake); the right taxation regime and the right governmental, monetary and professional services support to safeguard the momentum of this exponentially exciting phase we have been in for our technology sector. And to ensure future success.’
