The UK’s cutting-edge digital start-up firms need to have more flexibility over immigration rules if they are going to be able to attract the best-qualified staff, says a think-tank.
Policy Exchange warns that UK digital firms are at risk of being starved of the highly-skilled staff they need to expand, because of visa restrictions.
It argues the US gains an advantage by hiring from a global talent pool.
Report author Chris Yiu says skilled graduates are in “short supply”.
The report is published as London Metropolitan University is taking legal action to overturn a decision to stop them recruiting overseas students.
The Policy Exchange report highlights tensions in trying to maintain tight national migration rules while at the same time trying to nurture fast-moving industries which rely upon a highly-mobile, internationalised workforce.
It calls for a more sophisticated differentiation between attracting talent and maintaining borders.
It raises concerns that the next generation of digital entrepreneurs are more likely to be drawn to places such as California.
“Start-ups need to be able to take on the right people fast, not spend months trying to expand their technology teams. That’s why we need to make it easier for UK start-ups to take on highly-skilled foreign graduates,” says report author, Mr Yiu.
“Companies like Intel, Yahoo!, Google, eBay and YouTube were all co-founded by immigrant entrepreneurs. They are now major global businesses. We need to create the right conditions to ensure that the UK lives up to its potential to be a world leader in the digital economy.”
The report suggests that employers need to have more flexibility over employing overseas graduates and allowing them to act as sponsors.
It also calls for changes to the “post-study” visa regulations for graduates when they finish at a UK university – to make it easier for science and technology graduates to continue working in the UK’s digital industries.
These rules had been tightened after fears that this time after graduation had become an immigration loophole.
Without creating a more effective channel to recruit from overseas, the report argues that digital start-ups will not have access to sufficient numbers of high quality staff.
A spokeswoman for the Home Office said: “Latest visa stats show that around 40% of those coming here to work are joining the IT sector and we have made sure innovative student entrepreneurs who are creating wealth are able to stay in the UK to pursue their ideas.
“Our immigration reforms have brought in a more selective system which attracts the brightest and the best from across the world whilst bringing net migration down to sustainable levels.”
A report from Oxford University earlier this year produced a map of digital economies – and showed how “technology hubs” grew up in clusters, often around universities and research centres, and depended on a supply of suitably-qualified graduates.
These technology hubs – such as Silicon Valley or around Boston in the US – had a high concentration of innovation and competed for talent on an international basis.
In the longer term, the report argues that the education system in the UK will need to generate more home-grown talent – but there needs to be a more immediate response for industries which otherwise might re-locate.
“In the near-term, making it easier to tap into the global pool of digital talent would help ensure that today’s digital start-ups are still around to employ our school leavers and graduates of the future,” says the report.