BREXIT: What Next for Software Development in the UK?

Yesterday, the UK officially triggered Article 50 of the Treaty of the European Union, which formally begins the two-year process whereby the UK withdraws itself from that Union and becomes, once again, a fully sovereign nation.

While this move was well anticipated, given the success of the June 2016 “Brexit” referendum, today’s move still is shocking, especially to the roughly 48% of those who voted to “Remain”.

There has been much speculation and conjecture on both sides as to what impact this will have on the UK and its citizens, ranging from “rosy” to “dire” depending on one’s perspective.

Certainly, Brexit will have ramifications on most all aspects of British life, with the impact on labor arguably one of the most significant. And of all the segments of British labor, IT may be most crucially impacted.

The growth of Britain’s IT sector has been nothing short of spectacular, growing, “32 percent faster than the rest of the economy between 2011 and 2014.” This net effect equates to millions of jobs created, with billions of pounds contributed to the economy.

While this growth has been great for the UK tech worker, it has also been great for the EU tech worker, with total demand far outstripping the local supply. With the “Leave” vote, the UK’s access to the EU talent pool will certainly be inhibited: how much so is to be determined. As an added concern, there’s a real risk that UK member countries –Scotland, Wales, Northern Ireland- may secede in their own right, choosing instead to align with Europe, further isolating England.

How does a British tech company “disaster plan” for such uncertainties? It may be wise to “expect the worst but hope for the best,” with short, mid and long-term possibilities considered:

• Short Term: Over the next two years, business fairly stable with some negative impact gradually emerging. This includes limitations in the talent pool and an increasing cost of talent.
• Mid Term: Two years out, a shock to the system as access to talent begins to have a grave impact. The high price for available talent makes it difficult to start or innovate projects. New, EU tech hubs are established, luring top -more internationally minded- UK talent there.
• Long Term: Markets stabilize and pragmatism takes over. The negative economic impact is fully felt and the necessary levers are pulled to first stem, then reverse these losses. The UK and the EU establish a workable, mutually beneficial way forward.

We, at Accelerance, have seen an increase in activity coming from the UK since Brexit was announced last Summer. Companies there need to understand their options in near and offshore software development and no group enables them to do this better or faster than Accelerance. Interestingly, leading software development service providers have been able to expand their ranks as former expats return home.

So “Buyers” and “Sellers” will still meet each other, only the playing field will have to expand. World events like Brexit highlight the ever-growing need for a global mindset when developing software.

Only Accelerance has aggregated and certified this global marketplace, enabling us to offer best in class assistance to companies around the world, connecting them with esteemed software development groups, best aligned to meet their needs.

Talk to Accelerance today to learn more how we help.

Michael McAuliffe is the Managing Director of Accelerance, Inc.

Accelerance is the global authority on software development outsourcing. We connect Western companies with the most qualified software talent in the world.