Almost half of exports from UK tech firms go to Europe

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And now what? For the UK tech sector, Brexit extension means extra uncertainty
A brand new ‘Brextension’ delays the UK leaving the European Union till October. However the continued uncertainty round Brexit is leaving many within the know-how trade confused, annoyed – and dropping out on enterprise.

Almost half of exports from the UK’s digital sector go to the European Union, in line with new authorities figures.

The brand new information reveals how intently linked the UK’s rising tech ecosystem is to the European market. The UK is at the moment attributable to depart the EU on its 31 October Brexit deadline, with or and not using a deal on tips on how to govern commerce, information safety and plenty of different key areas of cooperation.

SEE: The Brexit dilemma: Will London’s start-ups keep or go? (TechRepublic cowl story)

Exports of companies by the UK digital sector to the EU stood at £19.4bn in 2017, in line with the report from the UK authorities’s Division for Tradition, Media and Sport (DCMS). It mentioned the “laptop programming, consultancy and associated actions” sector was the most important exporter: industries on this sector exported £9.1bn price of companies to the EU. Greater than 40% of companies exports by the UK digital sector go to the EU. 

What occurs to the principles governing the export of digital companies after Brexit is a giant fear for UK-based tech firms as a result of this was not coated by any of the so-far failed makes an attempt to give you a Brexit deal that may be agreed by each the UK parliament and the EU. That will imply that even when a deal was reached, firms promoting companies might must cope with two competing regulatory regimes and being unable to ensure that companies may be supplied on the identical phrases to clients in several areas. All of this may make it tougher for UK companies to compete in Europe.

By way of particular person nations, exports of companies to the US stood at £10.9bn in 2017; after the US, Germany, Eire, France and the Netherlands (all within the EU) have been the nations to which the UK’s digital firms have been almost certainly to export.

The UK digital sector covers companies concerned with all the pieces from the manufacture of laptop by way of to software program improvement and consultancy.

The DCMS Sectors Financial Estimates 2017: Commerce report additionally confirmed that over half of products exported by digital sector firms go to the EU. It mentioned the UK exported £9.3bn of digital sector items, of which £7.6bn was from the “manufacturing of electronics and computer systems” sector, and £3bn of inventive industries items.

As a rustic, the US was additionally the most important supply of digital sector companies imports, at £7bn, adopted by Eire, France, Germany and India. However once more, as a buying and selling bloc, Europe was the most important supply of companies imports. Digital sector firms imported £14.6bn of companies from the EU, and firms within the “laptop programming, consultancy and associated actions” sector have been the most important spenders, importing £5.1bn of companies from the EU, simply over 40% of the full.

China is the most important single supply of imports for the digital sector, accounting for £9bn, adopted by Netherlands, US and Germany.

However once more, as a buying and selling bloc, the EU was the most important supply, accounting for £17.5bn of digital sector items, of which £16.2bn got here from the “manufacturing of electronics and laptop” sub-sector, over 40% of the full.

The report discovered that the digital sector exported companies price £44.8bn and the inventive industries – which additionally covers some tech companies – exported £32.8bn in 2017. Almost 10% of the UK’s complete exports got here from these companies. 

The information emphasises the size of the danger to the UK tech trade that a no-deal Brexit may pose. For tech firms, the worst-case no-deal Brexit may see information flows between the UK and Europe reduce or considerably curtailed, vital issues with each recruiting workers from Europe and sending workers to Europe to work on initiatives, in addition to issues with importing merchandise and spare components.

Tech firms have warned that if there is no such thing as a settlement with the EU over commerce will probably be a lot tougher for them to do enterprise: 70% of tech firms who responded to a survey late final yr mentioned a no-deal brexit would have a ‘very damaging’ or ‘pretty damaging’ influence on their enterprise.

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