A post-Brexit overhaul of red tape will boost the fortunes of London’s tech industry and allow the City to beat international rivals despite political turmoil and the inflation crisis, the boss of IBM UK has said.
Sreeram Visvanathan said that the UK has “the ability to do a lot more, post Brexit” to help technology businesses thrive, and praised regulators’ new-found appetite for innovation.
Mr Visvanathan, who took charge of IBM’s British operations two years ago, said that post-Brexit changes to regulation could help build “willingness to take risk and challenge the status quo”.
Key tech industry regulators have softened their approach since the Brexit referendum. The Information Commissioner’s Office, for example, launched a “regulatory sandbox” service in 2020, allowing start-ups to create new services that push the boundaries of data laws such as GDPR while consulting with regulators at the earliest stages.
Regulation on self-driving cars has allowed carefully controlled experiments on public roads in Britain, even as the European Union cracks down on artificial intelligence that is vital to the development of fully autonomous vehicles of the future.
Mr Visthanan said: “I’ve seen the regulators be very open… I’ve seen us move away from that hard stance of ‘this is the mandate and thou shalt obey the mandate’. There’s a willingness to listen and to adapt .”
The call to embrace greater regulatory freedom comes as British tech businesses report worsening business confidence. The trade body TechUK said just 45pc of its members believe the outlook for their sector will improve in the coming 12 months, down from 79pc in February
However, Mr Visvanathan rejected suggestions that the capital had become a less attractive business destination following the chaos prompted by Liz Truss’ September mini-Budget.
He said: “You know what? If London is facing a crisis, so is every other big city. And we’re all challenged by needing more technical skills than we have.”
Mr Visvanathan, who ran IBM UK’s public sector division before taking up his current job in 2020, added that British business leaders ought to show greater leadership, be more imaginative and embrace change faster.
He said: “Those are the three things that fundamentally we need to do to stay ahead of the rest of the world.
“And it’s a very specific area of passion for me, because I don’t see too many leaders embracing that as quickly as I think we should.”
IBM’s UK customers include a number of banking and financial services companies. Among them are the Nationwide building society, the Treasury-controlled savings bank National Savings & Investment, and HSBC.
IBM’s recent history has been overshadowed by a number of age discrimination lawsuits brought in both the US and the UK.
Ex-employees bringing legal challenges claim there is a corporate policy of sacking expensive older staff in favor of hiring cheaper young graduates, something the company has consistently denied.
When the company had 281 UK Employment Tribunal cases against it dismissed at a single hearing in 2019, it said: “At each and every stage of the process, IBM rejected any attempt to characterize those changes as age discrimination, and defended our right to make changes to ensure that IBM remains competitive in the marketplace.”
Once thought of as the safest of corporate tech outsourcers, encapsulated in the joke “nobody ever got fired for buying IBM”, the business has faced challenges in recent years as it struggled with an aging workforce and a core product line built around mainframes – early computer server technology dating back to the 1970s.
Despite the age of the underlying tech, mainframes can still be found at the heart of most of the City’s established financial services companies today.
In financial results unveiled on Wednesday IBM beat market analysts’ expectations, posting sales of $14.1bn (£12.5bn) for its most recent three-month accounting period. Losses of $3bn (£2.66bn) came in below its year-ago profits of $1bn, however.
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