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2016’s unintended consequences pose a real challenge for CIOs – Mike Altendorf

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Mike Altendorf at the 20th September 2016 Horizon Innovation Leadership Summit

2016 has been the year of the unexpected. I can’t remember a year quite like it. I still can’t get quite get my head around the fact that in less than six weeks Donald Trump will occupy what is still the most powerful seat in the global house. I don’t think anyone has any real idea what that actually means in terms of what happens next. What sits behind the internet memes, the Twitter feed and the crazy hair? Is he a megalomaniacal, fame obsessed American fundamentalist or simply a very shrewd operator who understood exactly what it would take to propel him to power? Only time will tell. I was very interested to note that Bill Gates, a man who it is hard not to respect, likened him to JFK although I feel that is perhaps a little optimistic!

This article is not about Trump however but about unintended consequences. The votes for first Brexit and then Trump demonstrated the very real concerns of the ordinary man in the modern world. I happily admit to sitting fair and square in the remain (remoan?) camp, but I can see where the vote came from and for the most part I understand it. A lot of people thought they were voting for more opportunities for themselves, for greater freedom and for more control of their own destiny. The tragedy of the situation is that what is likely to happen is quite the opposite.

There is a belief that more jobs for Europeans means less jobs for the rest of us but there is evidence that the opposite is in fact true. Last week I spoke to some very senior contacts in the media industry. They have very real concerns that exit from the EU means that they are going to have to offshore more roles to survive. This is not a question of money but one of skills. The industry cannot find enough people with the skills it needs in the UK (as CTO Mark Holt told Horizon earlier this year). At the moment, it fills the gaps by employing EU citizens with the right skills to fill the gaps. This allows it to keep departments and jobs UK based.

Yes – some of those jobs are filled from outside the UK but the media industry also employs a lot of Brits too. By enabling companies to look elsewhere to fill the gaps, membership of the EU effectively ensures that employment is largely onshore. If that becomes harder, then the temptation to locate the whole workforce elsewhere becomes stronger.

“Our London data technology team is a great example of the diversity we currently have in the make up of our teams,” says John Kundert, CTO at the FT. “It consists of seven Brits who hail from across the UK plus a Pole, a Russian, a Romanian, two Indians on visas, a Kenyan, an Irishman and a New Zealander.  For us there is also added value in the diversity. Different perspectives, ideas and skill sets coming together.”

It isn’t just the media industry that is affected. I have had similar conversations with leaders in the tech sector. More than one person I have spoken to is seriously considering relocating their business if access to EU talent is restricted. A typical example is a digital design and development company of around 60 people based in Central London. Currently around 40% of the workforce are from outside the UK, representing around 10 different nationalities from across the EU and beyond. The owners of the business are now looking at the possibility of relocating to Berlin because they feel that without access to the wider EU workforce they cannot continue to build their business. This means that unless they fancy moving to Germany (and we Brits are not renowned for language skills!) the Brits they do employ will lose their jobs.

The point of both examples is that instead of protecting British jobs by reducing migration we are in danger of losing more. You could argue that London based jobs in digital and media are irrelevant to many of the Brexit supporters – especially those based in the North or those with more traditional skill sets – but the loss of companies and jobs from the UK economy is only going to weaken it and that affects all of us. The same pattern is also likely to emerge in the US which has also become more and more reliant on bringing in different skill sets from outside of its borders.

Of course, the real issue here (and perhaps the metaphorical elephant in this particular room) is nothing to do with foreign workers, it is to do with this country’s inability to invest in the right sort of training – both for young people coming up through the education system and for those currently working in ailing or outdated industries. There is too little collaboration between business and education to ensure that people learn the skills that they need for the modern economy. This is not just about laying on more university courses or apprenticeships. Education can take many forms and at the moment the whole approach to education in this country is years behind where it should be.

“Recognising that education is important is the easy bit – it is building out diversity in education that is perhaps harder”, says John Kundert. “People coming in from outside the UK will have experienced education in different ways and that is as valuable as the education itself. As machines become smarter it is the diversity of human experience and creativity that are increasingly the value add across the economy.”

The challenge for the government now is to ensure that we have the education in place to ensure that companies can find this breadth and depth of experience and approach here in the UK. If Brexit is going to work for us, then we are going to have to make sure that as a nation we have the skills we need to ensure our economy stays successful. There is no point pretending that we can go backwards. Globalisation isn’t going to stop just because we decided to get off the bus. We cannot create jobs to fit the skills we have; we need to have the skills  and thinking to support the industries that are going to thrive and that means rethinking our whole approach to education. It remains to be seen if our politicians have the appetite for doing something truly disruptive.

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About Mike Altendorf 8 Articles
Mike was the founder of Conchango, one of the UK’s most successful digital consultancies and systems integrators. Mike has many years of experience in consulting services and technology, founding Conchango in 1991 and building it into a £45m+ revenue business before it’s sale in April 2008.
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