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IT business confidence in UK drops by a fifth

Brexit is set to shake-up the IT industry, given many tech firms run European head offices in the UK

Confidence among IT firms in the growth potential of the UK over the next two years has fallen by 23% since Brexit.

A pre-Brexit survey by IT industry group TechUK found most of its members wanted the UK to remain in Europe.

This latest survey from TechUK found that 70% of tech companies are positive about the UK tech sector’s potential for growth, down from 93% in March 2016.

More than three-quarters (77%) of tech companies surveyed with a European HQ have those headquarters based in the UK.

And 78% said the vote to leave the European Union would have a negative impact on their business.

Nearly half (49%) of the TechUK member companies surveyed also said that Brexit would have a negative impact on foreign direct investment.

The IT firms surveyed predicted capital investment and R&D spending in the UK would also fall.

Julian David, CEO of TechUK, said: “This substantial drop in confidence clearly demonstrates the need to be vigilant to immediate and pressing concerns faced by tech companies.

“To maintain the sector’s exceptional growth rate they need to be confident that they will have access to the digital single market, a talented workforce and that international data flows will be protected.”

Read more about how IT will be impacted by Brexit

The group is calling on the government to develop a world-leading digital infrastructure and make the UK the place to invest and grow. The government must power this digital revolution, according to David.

He said: “The government needs to lead by example and take the opportunity to focus not just on protecting traditional industries, but on growing these industries through digitisation and supporting new industries that will drive the future economy.”

Since the EU referendum, TechUK published a five-point plan stressing that tech businesses are data-driven and depend on the ability to move data across national borders. “Any changes in the UK’s relationship with Europe must not impede the ability of data to flow freely to and from the EU,” it stated.

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