Despite Brexit chaos, people are more optimistic about the London tech sector than ever

Theresa May.Kerry Davies – WPA Pool/Getty Images

LONDON — Britain’s shock vote to leave the European Union last summer has engulfed the UK’s tech industry in confusion — with concerns over everything from visas for foreign workers to the future of funding for venture capital firms.

But this hasn’t dampened people’s optimism about the future prospects of London, according to a new report from KPMG.

The global consultancy firm surveyed more than 800 “global technology leaders” from around the world, and found that the British capital was ranked fifth in terms of up-and-coming global hubs for the technology industry — up from seventh in 2016’s ranking, before Brexit chaos began.

Respondents (mostly C-level executives) were asked “In addition to Silicon Valley/San Francisco, which three cities around the world will be seen as a leading technology innovation hub over the next four years?”

In first place was Shanghai, in China, followed by New York. In third was Japan’s Tokyo, then Beijing, then came London in fifth. After that it was Washington, Berlin, and Chicago, with Tel Aviv and Boston tied for ninth place.

In other words, respondents were more optimistic about Britain than ever, despite the looming spectre of Brexit.

But be warned: Brexit hasn’t even begun yet

A word of caution, however: The survey was carried out between September and November 2016. That’s after Britain voted to leave the European Union, but before we had any idea about what sort of Brexit the UK government might push for. Prime Minister Theresa May has since signalled that she intends to push for a “Hard Brexit” that prioritises immigration control over unrestricted access to the European single market — a stance that has alarmed many remainers.

Additionally, the Brexit process hasn’t even formally begun yet. May says she intends to trigger Article 50 by the end of March, and even then it’ll be two years (or perhaps longer) until a deal is hashed out with the EU.

Right now, it’s still business as usual — albeit with a large helping of uncertainty.

If Brexit restricts tech companies’ use of immigrant employees, or throws up regulatory or trade hurdles between Britain and the mainland, as many in the industry fear, it could turn out to be a very different story.

The demographics of respondents to KPMG’s disruptive technology report.KPMG

There has been a few early votes of confidence in post-Brexit Britain

Old Street roundabout in Shoreditch, a hub for London’s startup sector.Oli Scarff/Getty Images

But we have already seen some votes of confidence in the UK’s post-referendum tech industry. Facebook announced expansion plans in November 2016, saying it intended to hire 500 more people in London, while Google recommitted to plans to build a major new London HQ.

“Despite Brexit, the core attributes that have made the U.K. tech sector so strong and attractive remain in place,” KPMG said in its report, “including an amazing talent base that has a long track record of creativity; great infrastructure and facilities; first class universities; a stable legal system; appropriate fiscal incentives; time zone advantages; and an ecosystem of advisers that support the needs of tech companies.”

Before the referendum, the UK tech industry overwhelmingly supported remaining part of the European Union. Almost 90% of respondents were pro-Remain in one poll.