Business Technology

Tuesday 6 December 2016

Adrian Weckler: Checking the digital response to Britain's big decision

Published 26/06/2016 | 02:30

'But for globally-minded tech firms such as Apple, Google and Airbnb, Ireland might become a far more important place to be seen and heard.'
'But for globally-minded tech firms such as Apple, Google and Airbnb, Ireland might become a far more important place to be seen and heard.'

In Ireland, most of us would have preferred if Britain had voted to stay in the European Union. But it's not all bad news.

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The walk-out leaves Ireland with a historic opportunity to corner the European market in digital-technology investment.

If we have the ambition and the resolve, we really can clean up in the next 24 months.

And it's more than just us being the only English-speaking, overtly pro-American country left in the EU, or our position as a low-tax base.

Here are three specific reasons why we have a seminal chance to take Ireland to the next industrial level in tech.

1. Make-or-break data laws

Utter the phrase 'data protection' and some business analysts' eyes will glaze over. With respect, those people are not paying attention. Because when it comes to big business, international data protection movements are tier-one issues.

Whether it's the demise of 'Safe Harbour', the struggle of 'Privacy Shield' or the increasingly powerful decisions from the European Court Of Justice, few big decisions are now made by cloud giants without considering the area.

In this context, Ireland has a huge new advantage over the UK.

By walking out on the EU, Britain will now have to pass severe tests on whether we should be allowed transfer data there. In particular, it will face scrutiny as to whether its security agencies routinely engage in mass surveillance of communications. We know they do this through GCHQ. So now Britain faces the prospect of either scaling back its security services (how likely that post-Brexit?) or facing restrictions from the EU on transferring data.

Bye bye, Facebook. Bye bye, Google. Bye bye, UK cloud-computing industry. It's a recipe for legal and technical pandemonium in the next five years.

Indeed, this is currently the exact position we are in with the US. It's why the collapse of 'Safe Harbour' is such a big deal. And it's why everyone's freaking out about the potential failure of Safe Harbour's makeshift successor EU-US agreement, 'Privacy Shield'.

But guess what? Eventually, we'll make it work with the US. Because the US is a lot bigger and a lot more important than the UK.

So digital companies unlucky enough to be caught with a UK base could be in for a very, very tricky time now.

In contrast, having a base in Ireland gives a company hassle-free data flows in a market of more than 400 million people and within an emerging legal infrastructure with the US.

2. Access to high-level staff in an English-speaking EU country

When the sales software multinational Hubspot looked at where to locate its European headquarters, it came down to a choice between Dublin and London.

"But EU membership opens things up so enough people from Europe can come in to fill in the gaps," Hubspot-founder Brian Halligan told me recently. "Now that the recruitment market is getting really competitive, we can get talented people from other countries coming in here. This is really good for Ireland."

Halligan, like other tech CEOs, isn't crazy about the idea of setting up its headquarters in a country outside the EU.

But for Britain there may now be no more easy fluidity with hot developers or product managers from Stockholm, Berlin or Paris. Because if there's one issue that victorious anti-EU Conservative Party campaigners have seized on, it's immigration control. Even if the Brits make special exceptions for highly-skilled workers, there's no guarantee that the EU will reciprocate.

Ireland could win in a big way here.

"If Ireland can keep going the way it is, it really can be like Silicon Valley," Hubspot's Halligan said.

His point is well taken. You can put a call centre almost anywhere. Or a generic factory. But if you're trying to develop a facility with engineers and designers - the 'value-added' category Ireland and Britain are competing for - then you need a steady stream of skilled staff.

That's one reason why Irish policy-makers have been so grateful to Google: once it established a big base in Dublin, others (such as Facebook, Twitter, Dropbox, Airbnb and more) flocked to Dublin to pick off Google's well-trained staff for their own operations.

3. A new tier of European political influence

There are some huge decisions, critical to tech firms, on the legislative horizon in the EU. These really matter. From privacy, ecommerce and copyright law to the threat of standardised taxes for tech-centric industries, Europe could make or break the prospects of some tech companies.

So these companies really want to have a voice when decisions are being made. But one of their biggest, most powerful allies has now cut itself off from the decision-making process in the European Council. (Indeed, if the UK suggests a moderating measure over the next two years, some countries might go out of their way to oppose it.)

That leaves Ireland in a much more powerful position as an instrument of influence with policy-setters in the world's second-most important market.

For start-ups, it won't matter. But for globally-minded tech firms such as Apple, Google and Airbnb, Ireland might become a far more important place to be seen and heard.

We know that these firms have lobbied the Irish Government in recent years on certain issues, but it has largely been a sporadic, piecemeal process.

That will surely be stepped up now in a post-Brexit environment.

Sunday Indo Business

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