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Scotland, the UK and Brexit: an introduction

By Svea Miesch, Research and Policy Manager, ScotlandIS

As Research and Policy Manager at ScotlandIS, I have written a number of articles and papers on Brexit and the effect it may have on the digital technologies sector in Scotland. I was delighted to be asked by the Institute for Public Policy Research (IPPR) to contribute a chapter to a book covering all aspects of how Brexit may affect Scotland,  from law to fisheries, education, energy and other aspects of public life and policy. I wrote a chapter on Brexit and the Scottish digital technologies industry, building on our work since the EU referendum last year.

The book will be launched on the 3rd of July, so I won’t reproduce the content here but I would like to give our members a flavour of the main themes.

Scotland has a large, wide and varied digital technologies industry, from household names to micro start-ups but the majority are small and medium sized companies. In total, they contribute more than £4.5bn GVA to our economy and the sector is growing fast – second only to London in the last few years.

Digital interlinks with many other industries, firms that you wouldn’t think of as being a tech company now use digital to deliver services and products.  An increasing number of people work in digital roles in Scotland and the number of vacancies created each year is increasing.  We now have a  reputation as a centre of digital innovation and excellence.  The average salary for digital roles exceeds the average pay levels across all occupations, which is an important contribution to Scotland’s economy and society.

So what effect could Brexit have? I can see several areas of concern but also new  opportunities.

One of the concerns is about the access to skilled staff. We already experience a digital skills shortage in Scotland and losing access to talent from overseas and any restrictions on overseas staff currently employed could have adverse effects in the sector. Limitation of access to the European market is another risk. Our members have identified Europe as a key market and any restriction on free trade with the EU could negatively impact growth in our sector.

Another area of concern is diminished access to European funding and exclusion from research support programmes. International cooperation and collaboration with universities is often key to a company’s ability to innovate. EU funding and research staff from overseas have been crucial to facilitate this . Furthermore, deviation from regulations determined by the EU risks damaging Scottish companies’ ability to do business in Europe.

In a time of economic uncertainty surrounding Brexit, this could be Scotland’s chance to stimulate our economy by incentivising companies to fully embrace digital. Digital technologies can have a positive effect on all sectors of our economy, helping to increase productivity and opening up new markets. This would help prepare Scotland for a changing economy post Brexit.  Another opportunity, is to refocus our effort to nurture home grown talent to meet the skills requirements in the sector and counter the effects of restricted immigration. This should involve upskilling the current workforce and creating an education system which enabables young people to thrive in a digital environment.

We are already taking action as a nation to make sure we seize these opportunities but we need continued collaboration between government and industry and robust policy for this to continue – Brexit or not.

For a fuller overview of the topic, please get in touch or read my chapter in the book. The launch event for the book will take place on the 3rd of July in Edinburgh and the publication will be released on 31st of July.

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