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The negative impact of immigration policies on the tech industry

One of the main talking points surrounding the upcoming general election, and indeed major elections of the past, is immigration. How much is too much? Is the debate being driven by irrational xenophobic anxieties or reasoned economic concerns?

There’s no doubt that immigration has enriched life in the UK historically, culturally and indeed economically and one of the industries that has benefitted most from the influx of foreign talent is the technology sector.

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Tech City in East London has enticed a number of startups to take root in the UK, with favourable small business rates and freedom of movement between EU countries facilitating the growth of new businesses. Klappo, a data platform for food ingredients, decided to set up operations in London for a number of reasons, explained CEO Massimiliano Del Vita.

“I come from a place that I love: Italy is a great country,” he said. “The bureaucracy in Italy does not help young entrepreneurs to succeed. There are also a lot of issues around ability to access funds and money.

"We wanted to have a more international reach,” he continued. “We wanted to be able to share, to collaborate and access other people, experience and opportunities. Our first choice was Silicon Roundabout.”

Many other foreign companies from SMEs to large multinationals now call the UK their home. In fact, according to a 2014 report by the Centre of Entrepreneurs titled, “Migrant Entrepreneurs: Building Our Businesses, Creating Our Jobs,” 14 per cent of all UK businesses are started by migrant entrepreneurs. Moreover, the UK attracts talent from across the globe, with Ireland, India and China amongst the common nationalities starting businesses on these shores.

However, both the Conservatives and their potential allies, should a coalition government emerge, UKIP have both talked about tightening immigration policy in this country. Nigel Farage’s party, in particularly, are looking to enforce far more stringent entrance criteria for the UK, perhaps moving to the points-style system used in Australia.

David Cameron has promised to cut net immigration to "tens of thousands" – a significant challenge considering recent figures counted net migration at 298,000 a year. The potential for an EU referendum could also seriously curtail the influx of migrant workers.

According to Lopa Patel, CEO of Diversity UK and technology ambassador for STEMNET, a stricter immigration policy in this country would have a hugely detrimental effect on the science and technology industries.

Skilled migrant workers are crucial to the UK economy and are often needed to replace departing British workers seeking more money and better living standards abroad. According to research by UCL one in ten highly skilled British citizens now lives overseas, meaning an influx of talented migrants are required by businesses to take their place.

In the technology sector, this skills gap is particularly noticeable. Tech City claims that one million jobs need to be filled by 2020, while UK SMEs are planning to increase investment in digital technologies by £53 billion. It is unlikely that these numbers will be achieved using a domestic workforce alone.

Of course, the need to supply the UK’s ever-growing technology sector with skilled employees is only one side of the immigration debate, which is only likely to intensify in the run-up to the election this Thursday.

The total number of people arriving to the UK in the twelve months leading up to September 2014 was the highest since records began (624,000). Net migration of 298,000, meanwhile, was the highest since the record figure of 320,000 recorded in 2005.

Not all of these migrants are skilled and immigrations is a huge contributor to low numeracy rates in this country. Responding to immigration concerns is, therefore, a delicate balancing act and one that must be juggled with attempts to lower the national deficit.

The digital economy in the UK is thriving, even when other sectors are not, and any future policy must be careful not to hamper this. As well as ensuring that skilled workers are able to join and found companies in this country, there is also much the next government can do to encourage UK nationals to join the technology sector. Women, in particular, are a demographic that remains under-utilised by the industry.

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Whatever the result this Thursday, the UK government must ensure that the technology sector has access to the talent and the financial resources needed for success, whether that comes from this country or abroad.

Barclay has been writing about technology for a decade, starting out as a freelancer with IT Pro Portal covering everything from London’s start-up scene to comparisons of the best cloud storage services.  After that, he spent some time as the managing editor of an online outlet focusing on cloud computing, furthering his interest in virtualization, Big Data, and the Internet of Things.