The EU Referendum and Innovation

The EU Referendum and Innovation
brexit

brexit

With the most important vote of our generation within 24 hours, the Collider team would like to tackle the issue through the innovation lens aimed at startups. Whether that be in or out of the EU.

Bremain

The ‘Brexit’ anxiety has seen the FTSE 100 dropping daily. Similar trends have been mirrored in start-up investment, as many worry companies may struggle in a post-EU London. Many believe a connected Europe is important for investment in UK start-ups. London Mayor Sadiq Khan claims London has the opportunity to become “tech capital of the world” but worries tech development will struggle to maintain its exponential growth without initial investment.

Techcrunch writes a “closed-off Britain could threaten your very existence” as a start-up.

Start-ups must decide where to base their company and the answer is almost always London. But an EU exit may see this change. John Bradford’s poll on Twitter asking followers which city they would move to next had Dublin coming out on top. Also foreign entrepreneurs may look elsewhere as leaving would “stop young scientists from migrating freely within Europe”.

Also, EU funding will be lost if the UK public decide out is best. With the EU’s Horizon 2020 promising approximately 74.8 billion between 2014 and 2020. This will go directly to science, engineering and technology developers. If Thursday’s vote see’s us out, this research could cost 20 percent more. For start-ups and MadTech, this may not be significant in the short term.. But future technology may suffer, as this may be a deterrent seeing entrepreneurs less likely to take a chance.

Brexit

‘Brexit’ campaigners question EU regulation effects on innovation. Continued imposing of standards will affect the “most innovative economy in Europe”. Indirect taxation (“costs associated with the bloc’s endless regulations”) is an example of this. The effect is hard to measure, but it could be valid in terms of seeing a larger margin to reinvest back.

EU membership could affect start-ups through weekly payments from the UK. At £163m weekly, austerity measures could be lifted. But, this is speculation and we must confess austerity is made in Westminster, not in Brussels. So it’s a stretch to assume leaving the EU will result in a Keynesian approach to government spending.

A major element to the ‘Brexit’ debate is that the UK should follow the Norway model who gets access to Earth’s largest single market without sacrificing its sovereignty. Innovation in Norway has not been limited, despite being separated from the EU as they are leading growth in health innovation.

The EU debate is very current, but the future of remaining is often ignored; many assuming few changes. As in 2017 the EU aims to open the Unified Patent Court, which The Register have claimed “will make it much easier for patent trolls (a company that specialises in suing legitimate innovative businesses) and corporations in the US to reach into the UK and strangle your startup at birth”.

So…?

We encourage you to go to the polls today regardless of whether you’re for Bremain or Brexit. Still unsure? Collider portfolio company Miappi are curating some of the social debate. Check that out here