Scottish Independence – What Could It Mean for Startups and Tech?

http://blog.yarnee.com/scottish-independence-mean-startups-tech/

by pow-tac • 12 years ago

33 52 12 years ago

blog.yarnee.com

jstalin• 12 years ago

I'm cheering for a yes vote from across the atlantic.

untog• 12 years ago

"Banking is already well established in Scotland and in the same way that New York’s banking infrastructure has slowly given rise to a growing clutch of tech companies"

Two thoughts: many Scottish banks have indicated that they will relocate in the event of independence:

http://money.cnn.com/2014/09/11/news/economy/scotland-indepe...

and I'm not so sure that the NYC tech scene has sprung up as a result of its banking industry. In many ways it has held it back, by taking a lot of tech talent.

"There’s a real opportunity for growth in an Independent Scotland as a direct result of significant foreign investment (see the Irish tiger of the 80s and 90s)."

Given the current state of Ireland, I really, really, really don't think you want to use the Irish tiger as a possibility for a future Scotland.

pjc504• 12 years ago

It's important to distinguish between relocating the plaque that says "RBS HQ" and relocating the employees - and I believe the employees have already been reassured. If there wasn't an economic reason for having thousands of employees in Scotland rather than anywhere else in the world, those jobs would already have been lost.

smcl3• 12 years ago

No matter how right you are, the UK media have picked up that "RBS will move" soundbite and run with it - so annoyingly a great deal of Scots have got "Yes = lose lots of jobs immediately" in their heads.

More on the shifty media tactics employed in this excellent piece by George Monbiot: http://www.theguardian.com/commentisfree/2014/sep/16/media-s...

matthewmacleod3• 12 years ago

Two thoughts: many Scottish banks have indicated that they will relocate in the event of independence:

Relocating a registered office address, and relocating operations, are entirely different things.

Given the current state of Ireland, I really, really, really don't think you want to use the Irish tiger as a possibility for a future Scotland

Irish GDP per capita is higher than the UK. The fact that there was gross economic mismanagement over the past 15 years doesn't mean that the economy is a permanent basket case.

fidotron2• 12 years ago

The tax break thing is a mess, simply because as the UK (and to a lesser degree France) discovered the EU prevents any member state from being able to compete with the likes of Canada, or the provinces of Canada, on this front. This is why the "cultural test" becomes important, but in the case of Scotland where the great videogame export is GTA while one Glasgow based episode sounds possibly amusing it's not the foundation for longevity.

The other aspect of this is outside of defence and finance the UK tech sector took an absolute hammering over the last decade. You have the odd success story like ARM, but the games industry in north America is crawling with a disproportionately high number of Brits (and French people). In Montreal you could even tell when Realtime Worlds (makers of Crackdown based in Dundee) closed down thanks to the sudden influx of Scots. It is said that Scotland's greatest export is the people.

On immigration policy I tend to think Scotland has the right idea, and rather than it being feared in the rest of the UK they should embrace it too. The raw problem is really one of housing shortage, and embracing skilled people coming in while dealing with housing is a far healthier idea than pulling up the drawbridge. Perversely if Scotland stayed within the UK and the UK did enact that policy Scotland's people deficit would most likely remain.

Ultimately though an independence vote will create an investment situation with all the appeal of Detroit. The fun part is that narrowly rejecting independence won't be much better, and in the long run could be even worse.

pjc504• 12 years ago

investment situation with all the appeal of Detroit

Why do you think that? Scotland isn't derelict.

fidotron2• 12 years ago

Uncertainty and instability.

The only thing you can say about this referendum is the next 30 years in Scotland are going to be interesting, in the sense of the Chinese curse.

simonh• 12 years ago

One problem is that the finance industry in the UK sucks up a lot of the talent, and much of the rest goes into telecoms. We're pretty strong in both areas. Plus defence I suppose, as you say, so make that three although I'm not as familiar with that industry's tech sector. For a small to medium sized country like ours, even with a reasonable supply of tech talent, it doesn't leave a lot left over for other industries.

rjsw2• 12 years ago

There may be a fair number of good former defence tech workers available to work in startups soon.

fennecfoxen2• 12 years ago

Immigration policy is interesting.

I'm actually doing (early-stage) interviews with a number of companies in London and elsewhere. The visa situation for a US national hoping to work in the UK is obnoxious: assuming you've signed up to be eligible to sponsor people already (~8 weeks and a thousand pounds or so) you then do a little dance with an overly-tailored job description to demonstrate you can't hire someone locally after N weeks, pay another thousand pounds or so on the visa application, wait an additional ~6 weeks for processing, hope you get approved (quotas are falling dramatically) and if not, well, maybe you could to an inter-company transfer after a year of working for them elsewhere. Big companies benefit disproportionately while startups try to avoid the complications. Could be worse, though: it could be like the US.

In a place like Amsterdam or Berlin I'm given to understand that you can hope for a straightforward and relatively cheap approval process with very short turnarounds (on the order of two to four weeks) and much higher likelihood of getting the requisite approval.

Having access to a functioning tech industry in English-language friendly Scotland with low barriers to immigration would be awesome -- but then again, by the time it happens I'll probably either have married the girl or moved back to the US. :)

pjc504• 12 years ago

Funny set of points to make, but yes: there's great potential. Games industry in and around Dundee, centered on graduates of Abertay. Rockstar North. Quite a few other big names about: Oracle, Cadence, Microsoft. Quite a lot of tech in financial services. I nearly went to work for a satellite company in Glasgow called "Clydespace".

A startup scene is not yet so visible. I'd be interested to hear where it is in Edinburgh.

If there is a spate of businesses pulling back over the border (which I highly doubt), that would just open up gaps in the market for local entrants to fill.

falsestprophet3• 12 years ago

Several pleasant European countries have pretty low salary requirements for work visas for computer programmers: €37,128 for Germany and €30,000 for Ireland for example.

It probably isn't a coincidence that being a computer programmer in one of these countries isn't very lucrative.

ownagefool• 12 years ago

https://www.jobserve.com/de/en/search-jobs-in-Berlin-Branden...

It's not amazing but it's not terrible.

mischanix2• 12 years ago

My (uninformed) view of the UK is that the reward for being in tech there is dismal, real money is hard to come by, pays and benefits are just enough to scrape by, etc.; the article brings up the point that while historically Scotland has been on the forefront of technology, it hasn't been very active in the last few decades, which leads me to wonder if the poor rewards have led to the emigration of those who would otherwise base their tech startup in the UK.

pjc504• 12 years ago

real money is hard to come by

Conversely, HN is full of stories of people in SF earning vast salaries but having to live in a cupboard because property prices are so high. A tech job in Edinburgh will get you a 3-bed apartment right in the centre or a nice house in the suburbs. I'm not sure what you'd consider "real money"?

matthewmacleod3• 12 years ago

That's pretty uninformed, yes. There's a pretty big tech scene in the UK; lots of money is available for good engineers. A developer with a few years of experience in London will probably make £65k or so, or about $110k. Cost of living is quite high, but that's pretty good money by any standards.

A major problem is that Scotland's tech talent has drained to London.

mischanix2• 12 years ago

Thanks for the info. My perception was driven by the fact that every job ad from the UK I've with an openly advertised salary that I've seen has that salary in the range of 25~35k GBP while requiring the candidate to live in London and be well-experienced which, to me, just seems completely unfeasible.

felipellrocha• 12 years ago

For reference, what's the cost of living there? (average housing cost, utilities, etc...)

coriny2• 12 years ago

"it’s as crazy and unrealistic a dream as an independence referendum used to seem."

I'm assuming this guy's pretty young as there was one 35 years ago. I kind of feel that a similar amount of evidence was used in the rest of the analysis as well.

wuliwong• 12 years ago

Judging from his picture, he's probably under 35.

arethuza2• 12 years ago

"there was one 35 years ago"

The 1979 referendum was about devolution (which Scotland has had now for a while) not independence.

http://en.wikipedia.org/wiki/Scottish_devolution_referendum,...

coriny2• 12 years ago

Given that referendum, an independence referendum was always possible. It was probably only during the 80s that it didn't seem possible, and was definitely being talked about by the time I lived in Edinburgh 15 years ago. Devolution was always seen as a process towards strong local political representation, whether or not ending in full independence (aka membership of the EU).

EDIT: I should note at this point, I honestly don't care how the vote goes and have very little interest in it. To me, it's been a long ongoing process that will probably follow the same rough path and end in the same rough place whatever the vote is.

ColinCera4• 12 years ago

As an American with two Scottish grandparents, I'm hoping an independent Scotland will implement a Scottish ancestry path to citizenship for Americans. I've visited Scotland twice and would love to live there and build a business there.

Of course I also hope there will be some reforms in taxes and bureaucracy to make starting a business in Scotland a reasonable proposition; currently it's not rational to start a tech business in Scotland, given the immense advantages of doing business in the US. I don't have much confidence that Scotland will actually become more business-friendly, but it would definitely be more likely as an independent nation.

But, yes, if an independent Scotland did create a business climate friendly to entrepreneurs and did make it easier for tech people to emigrate from the US, I for one would make the move in a heartbeat.

crb• 12 years ago

You can get that today, with Scotland as part of the UK? https://www.gov.uk/ancestry-visa/overview

sksksk• 12 years ago

The ancestory visa is only open to Commonwealth Citizens, which the USA isn't part of.

sjg007• 12 years ago

If you were born before 1985 you can claim UK citizenship through your Scottish grandfather.

ColinCera4• 12 years ago

Only if you're a citizen of a commonwealth country — I'm an American, so doesn't apply to me.

lambdasquirrel2• 12 years ago

I was hoping for an article of more depth. The points in the article, roughly backwards.

- Taxes don't even matter to most startups because they don't make any money. Maybe they're called startups because it's hard to start up. Har har.

- If finance money were important, then Silicon Valley should have been in NYC. Others have said this on this thread and many others. Someone should write a piece that snuffs this line of reason once and for all.

- The presence of established tech companies doesn't mean much either. I'm just not even going to hit this one, beyond saying that Armonk and Redmond don't have a splash of small companies nearby them.

Independence or not, a startup hub in Scotland would be nice.

arethuza2• 12 years ago

Tax breaks certainly do matter to angel investors (who certainly used to get some very nice tax breaks) and founders - I co-founded a VC funded startup in Scotland in the 1990s and I benefited quite a bit from the 10% CGT rate available under tapering relief introduced by the "socialist" Labour party.

notahacker• 12 years ago

In theory an independent Scotland could focus on stimulating startups, but to my knowledge the SNP (almost certainly the majority government in a newly independent Scotland) hasn't made any pledges either way on capital gains tax or investment support schemes, or indeed on retaining some of Westminster's more generous tax relief schemes on seed investment like SEIS.

They have pledged to cut taxes on profit-making corporations and air travel (and to make investments necessary to improve public services) which suggests their priorities might lie elsewhere.

lambdasquirrel2• 12 years ago

That's fair. Is it something that will make your startup scene "happen"? I'm not sure about that. Having the right kind of investor culture seems to matter more. Obviously you can't have a Silicon Valley in a repressive culture, but even the difference between SF and Boston is too great. I don't know how things are in Scotland.

rjsw2• 12 years ago

I was a founder of a startup in the 80s and there were various incentives offered by Scotland at the time to set up in Silicon Glen.

sparkzilla3• 12 years ago

There's a reasons Scots engineers like me left the country: no jobs.

It is highly unlikely that an independent Scotland will become any kind of tech powerhouse. Both parties are deeply socialist. If the Scottish National Party win expect a further move to the left. If the vote is Yes there will be a huge amount of political and economic instability.

matthewmacleod3• 12 years ago

This is FUD.

The SNP are arguably economically to the right of Labour. If they were in power post-Yes, you'd likely see a cut in corporation tax, for example.

There will be loads of instability, but there's an opportunity in there, and a guarantee that there will be an effort to find new economic specialties. I'd bet tech will be one of those. However,as you say, many Scottish engineers currently leave the country, particularly for London - so, how could it get any worse?

sparkzilla3• 12 years ago

It can get a lot worse.

The key word in your post is "arguably". The plan is to use oil money that may or may not exist to give more and more freebies to those in government jobs or on welfare. If there is less oil money than expected, where will the money come from? More debt and higher taxes. Not a good environment for any business. The banks have already started moving their head offices and other companies will follow. the market is too small and the risks too high.

The corporation tax cut is window dressing. It doesn't matter to a company if they get less tax if there is political instability, and anyway the costs of dealing with a different currency and cross-border transactions alone will drive up costs.

You talk of guarantees and bets in the same sentence. Who is making these the guarantees? I haven't seen any realistic pro-business plans on offer. While you may place your bets, many people will just walk away from the table.

CmonDev• 12 years ago

Practical answer: having to support one more country flag, one more ISO country code and maybe one more english flavour locale or a currency :).

joshfraser• 12 years ago

Perhaps a new TLD too?

s0l1dsnak3123• 12 years ago

We already have that :) http://dotscot.net/

darrhiggs• 12 years ago

Aside: How do you guys get your hands on all the ISO bits and pieces[0]? I have 4217 but others seem to be ≈$300 each. I don't want to whinge but it makes it hard to bootstrap a startup when things like this require payment, especially if you want a solid database from the beginning.

[0] ISO{3166,4217,639}

tlarkworthy• 12 years ago

8 years outside of EU will not help innovation (research grants, EU students) or economy (CAP payments, increased borrowing costs).

Spain has reiterated today it will not make Scotland's entrance into the EU easy (http://www.theguardian.com/politics/2014/sep/17/spain-indepe...)

lsllc• 12 years ago

Surely if Scotland isn't automatically conferred membership of the EU, then the same applies to newly created state of England, Wales and NI? And it will be as equally difficult for E+W+NI to re-enter the EU as it will be for a newly independent Scotland?

Surely?

ColinCera4• 12 years ago

The UK will be an altered state, not a newly created one; its membership status in the EU won't change at all.

Scottish Independence – What Could It Mean for Startups and Tech?

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