What, above all else, makes a great video game developer? The team. It doesn’t matter how great the concept, or how big the budget, a firm is nothing without a great team.
Where are the best people located? Everywhere. Talent is randomly distributed. Your perfect lead programmer could be in the next town or on a different continent.
What happens if we leave the EU? It will be harder to recruit talent from the rest of it. The principal stated aim of Brexit supporters is to make it harder for people from other EU countries to come to work in the UK. Regardless of the other promises they make, they will deliver on this one.
What will this mean in practice? Large corporations will be fine. They already have the HR and immigration specialists and financial resources that can allow them to recruit from anywhere in the world. They can cope with an added layer of admin if they need to recruit from France or Germany. Small firms, however, don’t have that luxury. An added layer of admin for a large corporation can become, in practice, a complete barrier for a small firm. Most small business owners don’t have the time to read up on immigration law, or the spare money to pay experts to help them.
So small companies in the UK will be doubly disadvantaged in the war for talent if the UK leaves the EU. Competitors in remaining EU countries will recruit from a bigger pool of talent, and large corporations in the UK will be able to recruit where the smaller firms effectively can’t.
That’s not all. Today’s video game developers sell globally. At the moment there are no deductions, tariffs or withholding taxes when we sell to the US or the EU, our biggest markets. We live in an age when protectionist barriers have, by and large, been removed. Small firms which sell products internationally, like video game developers, have benefited from this. If we leave the EU the position will change. We will no longer be in the single market, so we will be vulnerable to new protectionist policies from other countries in the EU. We will also have less clout when negotiating with the US and other major markets. Again, large firms can find ways around protectionist barriers. Just look at how some multinationals organise their tax affairs. Subsidiaries will be set up, money will be routed via different countries, tax accountants will be employed and loopholes exploited. Again, none of these expensive solutions are available to small firms. Again, small firms in the UK will lose on both counts – they will be disadvantaged when competing with companies in other countries, but also when competing with large incumbents here in the UK.
Some may argue that this is a price worth paying for greater sovereignty. But the only country with absolute sovereignty over its borders is North Korea. Everyone else has to compromise. If we want our people to be free to move to Spain or to sell to Belgium, we have to allow Spanish people to move here and Belgian companies to sell here. Negotiations require give as well as take. In or out of the EU, we will have to continue to compromise to get what we want.
I struggle to understand the logic of creating a position where small firms lose out relative to their larger competitors here in the UK (many of them foreign-owned), and relative to their competitors abroad. There is a compelling, overriding reason to support small firms: who else is going to create new jobs? Economic growth, increased taxes and new jobs come from today’s small firms. This is true for video games businesses and it is true for other businesses as well. Future growth comes from today’s start-ups and SMEs, not from existing PLCs and multinationals. We have a fantastic track record in building new businesses here in the UK. Our start-ups and SMEs compete globally. With a level playing field we have nothing to fear. But anything that puts us at a disadvantage compared to competitors in other countries or large incumbents here is actively harmful, both to our own industry and to the economy in general. Putting up barriers to international recruitment, and exposing our exporters to the risk of protectionist barriers and tariffs, means that we will be competing with other countries with one arm behind our back. Foreign competitors will benefit, and the UK will be the poorer as a result.