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9 October 2014

Immigration policy is holding back the UK’s tech boom

The government's ambitious project of putting coding on the national curriculum is exactly what UK tech needs. But in the short term, immigration policy is holding us back.

By Ed Bussey

One of the biggest economic challenges facing our nation is the need for more qualified, highly-skilled professionals…Yet because our current immigration system is outdated and inefficient, many high- skilled immigrants who want to stay in America are forced to leave . . . Some do not bother to come in the first place.

Signed by executives from the likes of Google, Facebook and Yahoo these are the words of a letter sent to President Obama last year to argue for the relaxation of US immigration controls. It is striking how accurately they apply to Britain today.

Since 2003 Europe has produced $30bn technology startups; 11 of them were created here in the UK. Russia, the second best performer, produced only five.

From fast-food marketplace JustEat to financial technology giant Markit, the UK tech sector is paving the way for a new era of explosive economic growth. But just as it begins to hit full stride — in London 27 per cent of all new jobs are created by technology-focused businesses — Britain’s tech sector is in danger of being hamstrung by a shortage of skills.

My own company, Quill, has a team of 26 and is currently trying to fill 17 vacancies despite growing over 100 per cent year-on-year. The simple truth is that our education system does not cultivate the right skills to satisfy the demands of our burgeoning tech sector.

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In fairness, the government has not been idle in the face of this threat; coding will now be a compulsory part of the national curriculum for UK students between the ages of five and 16.

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This is a welcome reform and sees Britain leapfrog some of the world’s leading tech-hubs – including the US. But while the coalition’s long-term efforts to boost the supply of homegrown talent are to be applauded, they are not a solution to the short-term problem. The skills gap in this country is hurting British competitiveness now and, if the government fails to act, it threatens to see the UK fall behind.

It’s frustrating that the steps being made by the Department for Education are being countered by the Home Office’s increasingly regressive position on immigration. There is much talk about which political party the rise of Ukip has damaged most; the truth is that Britain’s technology industry stands to be the biggest victim of its influence on the immigration debate.

As things stand, companies looking to bring talent to the UK from outside of the EU must apply for a specialist Tier 2 visa. In 2013 just 10,179 such visas were granted, considerably below the 20,700 cap. Far from reflecting a lack of demand, such figures are testament to the mire of red-tape around the current system, red-tape that hits small businesses – who lack sophisticated compliance infrastructures – disproportionately hard.

According to research conducted by business intelligence company Duedil and the Centre for Entrepreneurs, companies founded or co-founded by migrant entrepreneurs total 14.5 per cent of all UK businesses and employ 1.16m people around the country.

Unless the government does more to recognise the enormous value that migrant talent offers our economy then those benefiting from educational reforms today may not have a world class tech sector to employ them in a decade’s time.

Britain must rethink its attitude to immigration, because as we cast aside the talented migrants seeking to live and work in the UK, our competitors, from Berlin to Bangalore, are welcoming them with open arms.

In 2012, the US reached its high-skill immigration cap of 65,000 in just five days. Our schools have begun a steal a march on their American counterparts; if our immigration system can do the same then perhaps when the next Google is born, it will be on these shores.

Ed Bussey is the founder and CEO of Quill Content