How Brexit May Affect U.S. Developers


The international community—not to mention many a U.K. native—reacted with shock when a majority of British voters opted for the Brexit earlier this summer. Stock markets around the world hiccupped, and the Pound dove in relation to the U.S. dollar.

And what will happen in the long term? In our globalized economy, will Brexit impact the U.S.-based technology sector? While it may be some time before the answer is clear, there are several angles worth considering:

Depending on how trade deals are renegotiated with the E.U., British firms could turn toward the U.S. to secure more advantageous terms, which could prove beneficial for American businesses. There’s also the issue of currency: if U.K. tech services become less expensive for U.S. companies by virtue of a falling Pound, it could draw more business (particularly cloud-based transactions) to Britain.

Gene Richardson, chief operating officer of Experts Exchange, an international network of technology professionals, wondered openly about the cost of U.K. tech labor. “We’ll have to wait until there is recognition of the new currency and a perceived valuation of it,” he said. “It could be the opposite too, and become more costly to compete and companies will go elsewhere for their developers.”

On the other hand, U.S. companies that have been planning on building data centers in the U.K. may not want to take a chance on the transition, especially as it relates to trade and security agreements, and move those operations into the E.U. That could have an effect on expenses and investment within the U.K., including the need to negotiate new licensing agreements.


Digital security is a critical issue potentially impacted by the U.K.’s departure from the E.U. Dana Simberkoff, chief compliance and risk officer at software vendor and manufacturer AvePoint, said in an interview that we currently view Europe as a single digital market; from the perspective of General Data Protection Regulation (GDPR), the U.K. is part of the E.U.—until it isn’t.

“There have been indications that the U.K. itself will likely pass data protection regulations that are similar if not equivalent to the E.U.,” Simberkoff added, “because they were instrumental in building that regulation and because they’ll require data protection regardless of their status.”

A number of the countries in the E.U. have data sovereignty requirements, raising concerns about the free flow of data between Europe and the U.S. For example, Privacy Shield, the mechanism that allows companies to transfer data across the Atlantic, could be altered. Simberkoff thinks that once the out of the E.U., we could see the rise of different data mechanisms between the U.K. and the U.S.: “If they make them more lenient that would be better for the U.S… but that may be a problem between the U.K. and the EU. Europe’s laws are quite stringent and they’ve set a very high bar for data protection and transfers.”

That being said, Simberkoff lauds the U.K.’s Information Commissioner’s Office (ICO) for being an influential voice of reason in data-protection negotiations in Europe, and reiterates that it’s likely the U.K.’s future mechanisms will hew closely to what’s already been established.

The general consensus is that there may be a slowdown in big investments until there’s more certainty over how Brexit pans out, but financial markets will eventually stabilize and U.S. businesses will be able to take a long view on how best to partner with U.K. firms.

“My opinion,” added Gene Richardson, “is that it is something that is going to have to be watched and the risks understood… or at the very least, you might not want to put all your eggs in the U.K. basket right now, and diversify.”

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