The Brexit process has launched. That means the UK is on the clock, aiming to disengage from the EU within two years. Firms have already taken actions to establish EU-focused bases in places other than London. But they’re also staying engaged in the UK — especially in the technology sector.
Analysis released this summer by global IT industry body CompTIA revealed that the UK technology jobs market got off to a strong start in 2017, with job postings in the sector reaching more than 365,000 for the first quarter of the year. The analysis, using statistics from Burning Glass Labour Insights, found that since Q4 of 2016 the amount of IT positions advertised has increased by nearly 90,000, up from 275,679. This means that of the 2.7 million total job posts in this quarter, technology positions made up 14 percent of all listings.
Data from the UK Department for International Trade shows tech investment dominating inward investment results for FY 2016-2017, with software and computer services alone accounting for 418 out of 2,265 FDI projects (18 percent). Add in financial services (217 projects), electronics & communications (115) and creative & media (151) and the tech share grows to 40 percent.
A separate report from TechUK found the nation received £6.8 billion (nearly US$8.8 billion) of tech investment in 2016, 50 percent higher than any other European country.
“We must do everything we can to keep this growth going,” said Graham Hunter, vice president for Europe and the Middle East at CompTIA. “There is also the issue of Brexit. With Article 50 now being triggered and the process of the UK leaving the EU now underway, we will have to demonstrate to organizations outside the UK that we have the ability to remain competitive in the global market.”
London is doing its part, as new European HQs from Bloomberg and Google make their debut, and Mayor Sadiq Khan outlined a vision for the already pioneering startup hub to become the world’s leading smart city. New data from EY shows that London is Europe’s leading city for foreign direct investment into the technology sector, attracting significantly more investment projects than any other European city in each year during the last decade. Mayor Khan also officially opened Plexal, a tech innovation incubator and accelerator, on the former Olympic Games grounds at the massive Here East development. The initial focus will support the development of products in emerging technologies including wearables, IoT, smart cities, inclusive finance, sport, fashion and health.
The Here East area already has seen substantial investment, including news that Ford will open a dedicated Smart Mobility Innovation Office focusing on future mobility solutions for Europe. “The location at Here East will allow us greater collaboration and the out-of-the-box thinking needed to tackle the urban transport challenges of tomorrow,” said Steven Armstrong, group vice president and president of Europe, Middle East and Africa, Ford Motor Company, at the opening of London Tech Week. “We will also be ideally placed to build on existing partner projects and have access to London’s world-class digital talent.”
The campus is already home to Loughborough University, one of Ford’s longtime and most significant UK university research partners, as well as the Advanced Propulsion Centre (APC), which Ford has worked with on powertrain research and this year the plug-in hybrid Transit development.
Cyber Cluster Blooms in Belfast
Tech investment is by no means confined to Greater London.
Cybersecurity Ventures estimates there will be 3.5 million unfilled cybersecurity jobs by 2021, up from 1 million openings in 2016. Why? Ask Silicon Valley–based security and compliance company Proofpoint, whose annual Human Factor report, released in June, found that, among other spikes, business email compromise (BEC) attacks have cost organizations more than $5 billion worldwide.
In fighting back on behalf of some of the biggest companies in the world, Proofpoint itself is finding a bulwark in Belfast, Northern Ireland, where more than 100 staff work out of a former mill from the 19th century solving cybercrimes of the 21st. The firm is part of a flurry of cybersecurity firms establishing footholds in the area, including aPriori and Black Duck from Massachusetts. It all started in 2008, when Queen’s University put its UK Centre for Secure Information Technologies (CSIT) down at the waterfront, not far from where the Titanic was constructed. Thus a talent pool was born to help detect and destroy malware lurking just under the surface of every corporation’s everyday business.
Before making its decision on where to expand its Center for Open Source Research and Innovation, Massachusetts-based Black Duck advertised positions it was seeking to fill in both Boston and in Belfast. Belfast secured several times as many qualified applicants as the company’s home market.
In an interview at the hip docklands lunch venue Titanic’s Dock and Pump House (literally on the site of those historic assets), Timothy Kenny, vice president of culture for Black Duck, says the firm over the past two years has expanded beyond its two offices in Burlington, Massachusetts, and San Jose, California to sites near Tokyo, Vancouver, Reading (UK) and Belfast.
“We were looking for a way to expand an R&D research facility for security in open-source software,” he says. There was some comparison with Dublin, and the skill sets and projects going on at Queen’s University were a strong factor. “Other companies are seeing that too,” he says of the software engineering talent in the area. “It started with the talent pool. It was all about the people.”
The computer science building at Queen’s University has high-level computer labs that stretch to accommodate the 400 dedicated machines for the 400 undergraduates coming through annually. “There is a massive demand for graduates,” says Allister Lee, school manager for the Computer Science Building. “Cyber is the big thing.” There are also related fintech and insurance opportunities, he notes. A recent hackathon at the building, sponsored by Allstate, produced an app that trolls social media in order to check up on insurance claims.
Kenny’s Black Duck colleague Chris Fearon, director, security research, says, “One reason Belfast is successful is we’re very good at producing quality engineers. Strong engineering talents have transferable skills in cyberspace — looking at a problem and identifying a problem requires an inquisitive mind.”
Now a team of a couple dozen is on its way to a projected 60 positions at the site, including technical support and a few other departments. “It will be our second-largest operation outside Boston,” says Kenny, hard at work seeking a final building as the company temporarily occupies space at the Scottish Provident building in the city.
Kenny says Brexit is something the firm keeps a close eye on, but is not likely to cause a seismic shift, because, as he puts it, “It’s all about the people for us.”
He says Black Duck found the resources of Invest Northern Ireland very helpful. Discussions with other companies were helpful too, in terms of openly discussing talent acquisition.
“As an ecosystem it’s very supportive,” he says, “even though eventually it’s going to be ‘Game of Thrones’ in competing for the same talent.”
(Kenny’s joking reference was purposeful: “Game of Thrones” itself is fast becoming as big a deal in terms of economic impact and tourism as the Titanic museum itself, as the hugely popular HBO program films at soundstages and remote locations in and around Belfast.)
Until that point, however, Kenny is bullish on working with the university, as recruiting costs can be high in the cybersecurity field. “Where we’re going to save our funds is being part of that ecosystem,” he says. “You get great people and they bring in more great people. That’s where the savings comes in. It’s like hitting the right vein of gold.”
It’s affordable gold at that. Noel McKenna, CEO of Titan IC, says firms can still hire good quality software engineers in Northern Ireland for $70,000, roughly half of what they’d command in Silicon Valley or Israel.
Even though cybersecurity by nature involves being close to the vest, it’s also an arena where community-based open-source work is vital. The conversation seems nonstop in the city itself too.
“There is rich and vibrant after-hours collaboration,” Kenny says. “One of our best new people said he literally does not have to buy groceries, because he could go to a meetup every single day of the week. As we build out our space, one of the components is not just enough space for X number of people, but the social space, so we can hold a meetup and bring in people every Tuesday night. It’s a way of recruiting too.”
The More the Merrier?
Other US cyber companies such as Rapid 7, SaltDNA, Alert Logic and Whitehat are also recent investors in Northern Ireland. Allstate — a fixture in Northern Ireland for more than 15 years — now has a 90-strong cyber team based in Belfast. More recently, US-based internet security firm Anomali announced it will create 120 new jobs with the opening of its European R&D Labs in Belfast.
Maildistiller, indigenous to Northern Ireland, was acquired just over four years ago by ProofPoint, whose team works 24-7-365 protecting some of the biggest corporate names in the world from the next emailed cyberattack.
Colm McGoldrick, the founder of Maildistiller, says the initial idea was for Proofpoint to fold in Maildistiller’s software. But the company was convinced of the human resources opportunity in Belfast to hire what McGoldrick calls “the right kind of people.” As even more companies arrive to take advantage of the area’s nucleus of employees, McGoldrick says, the sector could become as valuable as fintech.
“Cybersecurity is the future now in Northern Ireland,” he says. “Between that and fintech, those are the areas where people want to work, and hopefully inspire young people to start their own. That’s the difference between a 10-year opportunity and a multi-generational opportunity. I might build another business, and a third. I might go into secure e-commerce, where there is billions of dollars in opportunity. Service is great, but it stops. You need people building things, even if they’re virtual things.”