Skip to content
CityAM
Main navigation
  • News
    • News
      • Latest Business News
      • Economics
      • Politics
      • Tech
      • Banking
      • FTSE 100 Live
      • Retail
      • Insurance
      • Legal
      • Property
      • Transport
      • Markets
    • From our partners
      • AON
      • Bayes Business School
      • Canada BIDs
      • Central London Alliance CIC
      • Destination City
      • Halkin
      • Olympia
      • Inside Saudi
      • Tottenham Hotspur Stadium
      • Santander X
      • YEAR SIX Dividend
    • Featured

      Former KPMG chief joins £10m funding round for AI-powered audit challenger

      Cortea founders Valentin Neumann and Phillipp Hovelmann standing together, with Neumann on the left and Hovelmann on the r...

      Submit a story

      Tell us your story.

      Submit
  • Opinion
  • Sport
    • Latest Sports News
      • Sport
      • Sport Business
    • From our partners
      • The Morning Briefing: SBS x CityAM
      • Aramco Team Series
      • LIV Golf
    • Featured

      2026 World Cup: How England went from misery to magnet for blue chip brands

      Business professionals discussing strategy in a modern office with charts and graphs on a digital display in the background

      Submit a story

      Tell us your story.

      Submit
  • Life&Style
    • Life&Style
      • Life&Style
      • Toast the City Awards
      • The Magazine
      • Travel
      • Culture
      • Motoring
      • Wellness
      • The RED BULLETiN
      • Do it with Shared Ownership
      • Media Speak Hub
    • Featured

      Old Pulteney releases 50-year-old whisky for 200th anniversary

      Old Pulteney 50-Year-Old single malt Scotch whisky bottle with elegant packaging on display, highlighting luxury and craft...

      Submit a story

      Tell us your story.

      Submit
  • Investec
  • Events
  • Latest Paper
Wednesday 12 November 2014 9:15 pm  |  Updated:  Friday 07 June 2019 4:33 pm

Quotas on immigration would be a disaster for London’s tech startups

By: Simon Murdoch

Add as a preferred source on Google

Political debates over the benefits and drawbacks of immigration will no doubt rage on for years to come. But while the opposing sides pick apart the evidence over the impact of migrants on the public purse, one thing is clear: London’s tech ecosystem faces a very significant skills shortage. Government should be doing all it possibly can to attract international talent to the capital.

One of London’s historical advantages as a tech hub is that it’s been easier to find and retain talent here than in San Francisco. But because of the huge growth in the number of tech businesses in the capital, driven by record levels of investment, talent is becoming harder to come by. London tech firms attracted $1bn (£632m) of venture capital in just the first nine months of the year – 10 times the amount raised in the whole of 2010. As a result, demand for skilled staff is soaring, especially for software developers and product managers.

Almost half (45 per cent) of Tech City’s businesses believe a shortage of skilled workers is the biggest challenge they face, and nearly eight out of 10 say they could grow faster if more skilled people were available. As an investor in early-stage tech businesses, this is something I’ve witnessed first-hand.

If the Prime Minister is serious about creating a tech hub to rival San Francisco (and we have some way to go yet), enforcing quotas on immigration is the last thing we need. According to Tech City, a staggering 1m technology jobs need to be filled by 2020. The only practical way of addressing this in the short term is by encouraging UK workers with transferable skills to move to the tech sector (the Startup Institute is doing great work here), and by attracting more tech talent from overseas.

The Coalition for a Digital Economy (Coadec) recently published its Startup Manifesto, which was endorsed by more than 200 startups and venture capitalists (VCs). It called on the government to open the doors to tech talent from outside the EU, by restoring the post-study work visa and allowing VCs to sponsor employees on behalf of startups. The government must also leave the doors open to talent inside the EU.

Of course, the tech sector is not unique in this regard, and there have been other reports, by bodies like the OECD, which have found that the net direct contribution of immigrants to the public purse is generally positive.

An analogy might help to make the case. When building an online business, it’s crucial to identify the measurable marketing activities that generate a net positive return on investment. Having identified them, you don’t set a fixed marketing budget – you keep doing those activities over time until, by the law of diminishing returns, they stop paying for themselves. That’s the route to the fastest growth of your business.

Similarly, rather than fixing annual quotas for immigration – driven by numbers that happen to sound acceptable to the electorate – let’s focus on how we can attract the best possible talent, bringing in as many people as companies need to build their businesses.

Share this article

  • Facebook
  • X
  • LinkedIn
  • WhatsApp
  • Email

Similarly tagged content:

Sections

  • Jobs and Money
  • News

Categories

  • Fintech
  • Tech

Related Topics

  • FinTech
  • Startups
  • Tech City
  • UK immigration

Trending Articles

  • As it happened: FTSE 100 relief rally runs out of steam as BP and Shell weigh; Oil hits three-month low

  • London Tech Week sums up everything wrong with UK tech

  • Rolls-Royce shares surge as SMR unit bags multi-billion pound Swedish nuclear contract

  • KPMG’s Summer Friday half-day rollback signals deeper woes for Big Four giants

  • Inflation expectations at record high in interest rates signal

More from CityAM

  • London Tech Week was ‘complacency in conference form’

    Tech
    London Tech Week conference attendees discussing UK tech sector challenges and structural issues in a conference setting
  • Sadiq Khan: London tech boom can weather ‘dizzying’ AI risks

    Tech
    The Mayor of London, Sir Sadiq Khan, has this morning announced a £1.4m cash injection for community sport across the capital.
  • ‘We’ve got lots of things going for us America doesn’t’: Sadiq Khan on competing with Silicon Valley

    Tech
    Sadiq Khan addressing media at a press conference in formal attire, discussing recent developments in London policies
  • Revolut, Wayve and Elevenlabs join European tech sovereignty push

    Tech
    Wayve autonomous car navigating Regent Street, showcasing cutting-edge self-driving technology in an urban environment
  • Londonmaxxing: Capital reclaims European tech crown as money floods into AI and fintech

    Tech
    Googles modern Kings Cross headquarters showcasing innovative architecture in Londons dynamic tech district
  • Britain to offer visa refunds to woo tech scale-ups

    Tech
    Peter Kyle speaking at a podium during a press conference, addressing current issues and developments
  • Tech Week proves London can build the future

    Opinion
    Attendees networking at London Tech Week 2026 showcasing innovation and technology advancements
  • London Tech Week day four: Tech still cares about diversity

    Opinion
    Attendees networking at London Tech Week 2026 showcasing innovation and technology advancements
  • Terms & Conditions
  • Privacy Policy
  • Cookie Policy
  • News
  • Markets & Economics
  • Politics
  • Opinion
  • Life&Style
  • Personal Finance

Follow us for breaking news and latest updates

  • Facebook
  • X
  • Instagram
  • LinkedIn
Copyright 2026 CityAM Limited