CAPITAL WATCH ISSUE 1 2018

A business-friendly domestic regulatory environment has encouraged the growth of the tech sector in London. Factors such as lower Corporation Tax rates, a range of visas (albeit limited in number) to enable the hiring of skilled non-EU workers, tax breaks for early stage investment and robust data protection standards have supported the UK as an attractive destination. Beyond this, the FCA’s regulatory sandbox allows firms to test innovative products in a live market environment, and the Department for Transport has developed a regulatory framework and testing environment for driverless cars. The government has recently published a sector strategy for AI with a commitment to invest £300 million in AI research and development, which it is hoped will stimulate further private sector investment and activity. Nonetheless, concerns have been raised around issues such as privacy, labour market security and the role of social media in society. The sector is under ever-increasing scrutiny, with Sadiq Khan calling for greater regulation of both technology companies and social media channels in the wake of recent high-profile coverage. A balanced approach to encourage further innovation whilst upholding confidence in the sector is required if London is to maintain a thriving tech sector. With Brexit comes a potential divergence from EU laws concerning data protection standards, which could prove a double-edged sword. The ability to access the EU consumer base and labour market will be vital to the growth of the sector. The government is responding with a pledge to double the number of Tier 1 Exceptional Talent visas from 1,000 to 2,000 to support recruitment from abroad - but whether this will be sufficient remains to be seen. The government has recently published a sector strategy for AI with a commitment to invest £300 million in AI research and development Regulation and government support CUSHMAN & WAKEFIELD 06 COVER STORY