Blanket migration laws threaten the thriving Tech City startup scene

23 Jul Blanket migration laws threaten the thriving Tech City startup scene

Screen Shot 2013-07-23 at 10.43.00Russ Shaw writes for CITY A.M. on immigration and how blanket restrictions could damage the development of London’s burgeoning technology sector.

See the full piece below or click here to read on the CITY A.M website.

LONDON has the potential to be one of the world’s leading technology hubs, and the startup scene is growing fast. Research from UHY Hacker Young, released this week, showed that Tech City was the UK’s biggest growth area for new businesses in the year to March 2013, with 15,720 new companies formed. In 2008, it was home to just 15 tech companies.

And this is a boom underpinned by skilled migrant workers. According to research by Management Today, from a sample of 34 tech companies around Silicon Roundabout, at least a quarter of the founders were foreign-born.

But as a recent report from the National Institute of Economic and Social Research (NIESR) has shown, we are in danger of inhibiting the entrepreneurship and innovation that immigrants bring to the UK’s vibrant technology sector.

The report pointed to “UK-specific constraints” around entrepreneurship – factors that put at risk the influx of investment and innovation that the UK’s tech scene has benefited from. The UK Border Agency requires what it terms Tier One entrepreneurs (non-European migrants who want to invest in the UK by setting up or taking over a company) to prove access to at least £50,000 in funding before obtaining a visa, and to be resident in the UK for 180 days to maintain one. That’s a major ask for entrepreneurs looking to set up their first firm, many of whom will also want to spend significant time promoting themselves abroad.

This only adds to a general perception within the tech community that the UK’s immigration policy is bureaucratic, expensive and confusing; and immigration restrictions are only set to grow tighter.

Foreign students, for example, used to be able to apply for a two-year “post study work” visa upon completion of their course to allow them to look for work. Now, in most cases, they are left with only the duration of their Tier Four student status to find a sponsor willing to hire them and pay them at least £20,300 per year.

For businesses, hiring skilled migrant workers is similarly complex. It can take months for a startup to obtain a sponsor licence, conduct the necessary resident labour market test, obtain permission to sponsor a migrant, and then wait for the visa. In the tech world, this is often too long.

The UK must accept the importance of skilled migrants, and ensure it does not shoot itself in the foot by introducing blanket restrictions on immigration. Both politicians and tech firms in the UK have an obligation to work together to help attract the best talent, and to campaign for regulations that reflect the needs of business and those of their supply chains.

My organisation, a coalition of more than 200 senior leaders who have come together to help promote London as a technology hub, has created a working group on immigration to look at this issue and will be doing its bit to face the problem head on. But only when the political and business communities make a coherent case will the public start to discern between their real fears over uncontrolled immigration and the need to attract top talent in a globalised economy.

Russ Shaw is founder and chair of Tech London Advocates.

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