16 January 2023

It’s a numbers game – why immigration matters for Britain’s booming tech startups


The UK is a global leader in tech, with London trailing only Silicon Valley as the world’s premier startup ecosystem. This is in large part to the effects of clusters – a phenomenon whereby London has sucked in so many talented founders, developers, coders, PhD students and others that it has become a draw for anyone interested in startups. In 2019 The Entrepreneur’s Network found 49% of the UK’s fastest-growing startups have at least one foreign-born co-founder. 

Imagine that you are a startup founder working in a new, niche, highly innovative sector: growing steaks in a vat in a biotech lab for example, or using generative AI to create a tool that will write code automatically. You have a key role in your team that you desperately need to fill, but relatively few people across the globe will fit your requirements. You would hope, in this situation, that your government had your back, ensuring the visa system is quick and efficient. And, on paper at least, the UK’s immigration system has some of the most generous offers for the tech sector and high-skilled talent, including a recent raft of specific new visas covering graduates from elite universities, emerging leaders in their field and a visa specific for those setting up a startup. But that’s the theory – the implementation frequently fails startups when they are at their most vulnerable. 

Coadec has spent the year talking to startups and founders about their experiences with the immigration system, trying to identify the specific pinch points. That’s why we’ve launched a survey to quantify and assess startups’ real-world experiences of the system. We’ve also published a guide, tailored to founders, which sets out all the different visa options and the criteria to qualify for them.

From initial interviews with founders we kept hearing two major themes. First, while the immigration system has done a great job of providing lots of options for skilled tech talent, that flexibility has bred complexity. Particularly at the early stages, sorting out HR and a visa is a problem that will often land on the desk of a founder: a tricky, time-consuming task, competing for attention with the vital work of securing investment and forming the business.

Say you’re looking to hire someone who is a leader in natural language processing – that is programming computers to analyse human speech. You have four, maybe five, visa options depending on the candidate and their circumstances. So, if they’ve demonstrated exceptional promise in the field, they may be able to access a visa based on that. If they’ve graduated from a top university like ETH Zurich in the last five years, there’s a visa for that too. If they’re Australian and aged under 30, they might not need any of the above. Flexibility in the system is a great thing, but this array of options can also be confusing for companies.

Once startups have identified what visa should work best, they then face a second problem: reams of red tape. Our system is plagued with costly delays, excessive bureaucracy and rapidly increasing wait-times for basic application stages. Typically this happens during earliest product development – the ‘burning cash’ stage – when many startups are stretched to their thinnest in both time and resources. An 8-12 week delay for a key hire – not uncommon for a visa at the moment – can be a business-killer.

Whether the problem is red tape or whether the problem is awareness, we need to fix it. Because our success is a numbers game, relying on startups being able to find and hire world-leading talent quickly and easily. We’re one of the best in the world at tech because some of the world’s best want to come to the UK – but we won’t be if they get turned away at Border Control. 

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Frances Lasok is Head of Talent and Skills Policy at The Coalition for a Digital Economy (Coadec).

Columns are the author's own opinion and do not necessarily reflect the views of CapX.