How Will Brexit Affect Silicon Valley? It's Anybody's Guess

Going into the historic British Exit referendum, the "Brexit," a poll of the United Kingdom's tech industry indicated that about 87 percent of the sector was against leaving the European Union.

Silicon Valley seems to be of a similar mind, as the impact of the pivotal vote will, one way or another, have significant impact on the world's capital for tech startups.

California Quake
There are some influential people in Silicon Valley who have suggested that the Brexit could make the UK a better incubator of new technologies. Venture capitalist Marc Andreessen, known for Netscape and other browsers, is one of those voices.

"It's entirely possible Brexit makes UK more attractive place to build and finance new technology companies," tweeted Andreessen.

Despite that optimism, there are two generally accepted views about the Brexit's impact on Silicon Valley. Everything now is all a conjecture and the uncertainty surrounding its impact will stick around for a few years at least, as the process of officially notifying the EU of the UK's decision to exit could take up to two years.

It's that uncertainty, and its probable duration, that'll have the most pronounced impact on Britain and Silicon Valley in the near term. Back in May, Microsoft stated that Britain's EU membership was "important criteria for continued and future investment by Microsoft and others."

Down the line, the UK's absence from the EU could have a negative impact on internet policy, at home and abroad, and on tech companies like Google.

"This is probably of outsized importance to Google: The U.K. is one of their best markets, and the company needs all the support it can get in an increasingly suspicious Europe that is pursuing multiple antitrust cases against the search giant," wrote Ben Thompson, founder of tech research newsletter Stratechery.

When asked last fall what keeps him up at night, Alphabet chairman Eric Schmidt pointed to the balkanization of the internet.

And while many people may have assumed he was talking about China's censorship, the Brexit could undo significant progress in much the same matter, as noted by San Francisco Chronicle's Thomas Lee.

The global stock market took a $2 trillion hit in value, the Scottish again are mulling an exit from the UK to stay in the EU, Slovakia may propose an exit from the EU, high-profile UK politicians have exited en masse and there's the potential for a hung Parliament this fall.

While the Woodford Funds doubts the UK's economy hinges on the Brexit, the firm did note the potential for loss of productivity if multinational corporations, innovators in tech and management practices pulled out some of their investment in the UK.

"Things have changed a lot since 1973, when joining the European Economic Community was a big deal for the United Kingdom," the firm stated in a report. "There are arguably much more important issues now, such as whether productivity will recover."

Take Backsies

There's talk of a second referendum and the potential for the UK's next Prime Minister to simply ignore the first one, which isn't legally binding -- ignoring the vote, the will of the people, would only support those who voted to leave.

No matter how all of this turns out, it'll be months or even years before all this talk sheds more of the hypothetical elements and includes more concrete bits to build on. StockCats puts it best: