Half of the companies in Dundee’s computer games sector fear a “brain drain”.
Research has found more than half of Britain’s mid-sized technology companies believe their skilled employees could be lured abroad.
The technology hazard warning report is an in-depth study of owner-managers in the mid-market sector “companies with a turnover between £5 and £300 million” which highlights the key concerns for UK technology companies.
Although it found 77% of companies are more optimistic about the future than they were last year, failure to retain and recruit the right staff is the biggest concern of technology companies.
The report claims the lack of tax breaks for the games industry is a key factor in British workers heading overseas.
It states: “Portability of skills, coupled with higher salaries and the chance to enhance lifestyle are cited as the key reasons for considering a move abroad.
“Experts warn that the lack of students opting to study technology-related subjects, coupled with tax breaks offered by other countries to entice business, means we are compounding problems further for the future.”
Geoff White, a senior market underwriter for Zurich insurance, said: “From the television to the computer, the UK has always had a strong foundation in technology, and the companies within this sector are of great importance to the growth of the UK economy.
“This sector provides the opportunity for us to make Britain a highly competitive or even leading, business nation on a global scale.
“However, the research shows that employers in the technology industry are suffering from brain drain and fear this even more for the future, losing skilled employees to overseas competitors, which provide a richer, more challenging environment for them to work in.”Incentivise subjectsComputer games trade association, TIGA, said the report backs their calls for the government to introduce tax relief for games developers.
Chief executive Dr Richard Wilson said: “This report confirms three of TIGA’s long-standing arguments.
“First, that the UK is at risk of a brain drain of highly-skilled IT workers.
“Second, that relatively low numbers of students studying technology subjects such as computer science in turn creates recruitment difficulties for businesses.
“Third, that tax breaks such as those for games production are fuelling the brain drain and associated skill shortages.”
Dr Wilson said more must be done to encourage children to study subjects that will benefit the UK’s hi-tech industries.
“To surmount the challenges posed by the brain drain and skill shortages we need to incentivise students to study subjects such as mathematics and computer science,” he said.
“Additionally, we need the coalition government to enable UK high technology businesses to compete on a level playing field.
“Many of our key competitors benefit from generous tax breaks. The UK games industry does not.
“TIGA will continue to make the case for a tax break for games production and for improved R&D tax credits.”
Although the previous Labour government had intended to introduce tax breaks for games firms, these plans were scrapped when the coalition government came into office last year.
Photo by Flickr user Mykl Roventine.