Data Centres and Brexit

  • techUK techUK
    Friday17Feb 2017

    Emma Fryer muses on Brexit in preparation for DataCentreWorld where she will explore the implications for the UK data centre sector on the 15th March.

We’ve all heard an awful lot about Brexit since 24th June 2016. And so we should have: the result of the Referendum signalled some truly seismic changes in our economic and political landscape. At techUK we’ve had plenty to say; we produced an immediate reaction followed by a more substantial publication - our Silver Linings report - in October. This examined the implications for the data centre sector and was followed by a broader based report on the digital sectors post Brexit in January.

Now that the Government has produced its Brexit white paper and the date we trigger Article 50 is rapidly approaching, this might be a good time to take stock. First lets have a look at what we said in our Silver Linings report, then we’ll have a look at what government has said, and then we’ll consider how big the gap is.

Our 2016 report explained the role of data centres in the economy and how they provide the core digital infrastructure that underpins all industry sectors. It set out the challenges and opportunities presented to the sector by Brexit, examining the impacts in seven different policy areas relevant to the sector: uncertainty, data flows, trade, skills, energy costs, inward investment and environment.

It then outlined the policy actions that are needed to help us address those challenges and optimise those opportunities. The content was summed up in the dashboard (below) that represented the different levels of threat and opportunity we felt were present in each area. At the red end we saw more threat than opportunity; at the green end we saw more opportunity than threat.

Brexit - DC

(Data Centres Brexit Dashboard is also available to download below)

Now is a good time to see how many of our concerns are addressed in the Government’s Brexit White Paper. In general the white paper is a statement of intent without much detail on how it will be achieved: But at this stage it’s probably only fair to expext more “what” than “how”.

Working across the dashboard, government had acknowledged that uncertainty is damaging for business but does not resolve as much as we would like. Moving on to data flows (our number one concern because our huge export in digital services does depend on the free flow of data) the importance of maintaining data flows is clearly acknowledged but there is no mention that we will have GDPR or that we will retain it and that magic word “adequacy” is missing altogether. In reality government will have to do some very fast work with the Investigatory Powers Act before we can think about adequacy. Next we look at trade, and we now know that we are leaving the single market. At least there is certainty, but only regarding what we won’t have access to, not what we will. Next we get to skills and here there are some genuine opportunities and an invitation to work directly with policy makers to ensure that we continue to have access to the high value-add technical skills we need. And as we move across our spectrum things are indeed looking up: commitments from government on managing energy costs and limiting burdensome regulation are very welcome, but all these will need strong statement from us to explain and justify our sector requirements. So there is work to be done on both sides.

At DataCentreWorld, I’ll be looking at each of these in more detail and setting out our sector view on the areas that continue to worry us the most and what we will be doing about them.

Emma Fryer is speaking at DataCentreWorld in the Energy Efficiency & Cost Management Theatre on Weds 15th March at 15:45

Data Centres Brexit Dashboard (docx)


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