By James Tout on 28 June 2016
What now for health tech after the Brexit vote?
With the dust settling on the referendum result, every industry is asking itself: What does this mean for us now?
Health tech is no exception. But with political turmoil engulfing the UK, we’re unlikely to get a clear picture on the economic and investment impacts of Brexit for some time.
A poll conducted by Tech London Advocates, which brings together 3,000 tech leaders, experts and investors, earlier this year indicated that a massive 87% of UK tech firms opposed Britain’s withdrawal from the EU, fearing the impact of the ability to recruit and trade.
Russ Shaw, TLA’s founder and a regular media commentator, said at the time: “London has established a global reputation as the digital capital of Europe. There is significant concern within the digital community that Brexit would undermine this position and threaten relationships with the European market.”
In the aftermath of last Thursday’s vote, Shaw and others have tried to put a brave face on things:
— Russ Shaw (@RussShaw1) June 25, 2016
If anyone can adapt to change, the tech sector can.
— Gerard Grech (@gerardgrech) June 24, 2016
Indeed, Gerard Grech, CEO of TechCityUK (who voted to Remain), argued in a Telegraph column that “despite the uncertainty, there is plenty of reason for optimism”, noting that the sector is growing more than 32% faster than the wider economy, and is creating jobs 2.8 times faster, too. As well as possessing a rich talent pool, the UK could adapt to the new reality, he suggested, by pursuing “pro-business policies, smart taxation thinking and fast visa conditions” to make the business environment even more attractive than it already is.
This sentiment was echoed by Digital Health Age’s editor, Lu Rahman, who said it was time for Britain to show its “stiff upper lip“:
“In or out, and like it or not, that overused phrase ‘keep calm and carry on’ seems strangely apt. Time to concentrate on what we all do well, on the innovation we can offer on a global scale and the skills we can bring to the sectors we are working in.“
Is health tech a special case?
Health tech, while sharing characteristics with the rest of the tech industry, is a slightly special case. In the UK, it has a vast and relatively self-contained ‘market’ in the form of the NHS, with its £115bn-per-year budget spread across a galaxy of commissioners and providers. But health tech firms also depend on the ability to source talent and much else besides from the EU, not to mention investment.
There’s also the political argument about what Brexit might mean for NHS funding, with the much-derided £350m claim made during the campaign by the Leave camp seeming wildly optimistic.
As yet, it’s far from clear when this postulated cash would become available (presumably not until after the two-year exit period) and we don’t yet know how much of a real ‘saving’ there will be from whatever new relationship we thrash out with Europe. And if the economy takes a dip in the interim, this supposed ‘Brexit dividend’ could be obliterated entirely.
Nevertheless, the UK undoubtedly retains some of the most innovative health tech firms anywhere. Many are SMEs focused on the UK market and, for the time being at least, it will be ‘business as usual’, notwithstanding the wider uncertainties.
The NHS, while squeezed for resources, will continue to prioritise digitalisation as it grapples with its own fiscal challenge to save £22bn through efficiencies by 2020. Vanguards and STPs will push ahead with plans for investment in tech as they integrate services and finally go paperless.
All of this suggests that, from a commissioning and adoption perspective at least, health tech innovators have everything to play for amid the maelstrom. But with so many ‘unknown unknowns’, it’s perhaps to be expected that investors, commissioners and government will all be looking for convincing evidence that health technologies are proven and have tangible impacts on patient outcomes and efficiency.
So communicating these benefits clearly will be critical, now more than ever. If the Brexit campaign has taught us anything, it’s that getting your messaging right can be the difference between success and failure.