When Big Ben chimes midnight on New Year’s Eve an invisible wall in eastern Europe will crumble. January 1 marks the end of UK labour movement restrictions with Romania and Bulgaria, two of the European Union’s poorest countries.
Pressure group Migration Watch predicts as many as 70,000 immigrants a year could flood the UK. This has led to frenzied fears that they will take British jobs and drain the welfare system, while gypsies erect permanent encampments on Park Lane and Mayfair.
Rubbish, says Emi Gal.
Gal, a 23-year-old Romanian expat, is part of a new wave of eastern European immigrants coming to the UK to start businesses in high-growth sectors such as technology and social media. Britain’s pre-eminence in these fields attracts entrepreneurs who lack the markets and infrastructure needed in their eastern European homelands.
“Romanians are good at two things – engineering and entrepreneurship,” says Gal. His native country has produced a Nobel prize-winning biologist, the inventor of the jet aeroplane and even sent an astronaut into space.
Gal moved to London three years ago, after studying computer sciences and mathematics in Romania, to set up his video advertising technology firm, Brainient. His business adds interactive features to online videos, helping clients increase ad revenue by an average of 30 per cent.
“If you take a publisher that’s making £20m a year, that’s £26m,” explains Gal. “That means more tax and that means hopefully more staff. What people expect when they hear Romanians are gypsies.”
Estonian Taavet Hinrikus is another member of this new eastern cohort. He came to London in 2007 as an employee of Skype, whose software was built by Estonian developers.
Hinrikus has since left to set up his own company TransferWise, an international money transfer service that cuts out bank fees and counts PayPal co-founder Peter Thiel as an investor.
“We have a lot of developers in Estonia, but when it comes to marketing, there are no marketing people in Estonia,” says Hinrikus. “The UK is the centre point of the entrepreneurial activity in Europe. I say to all my entrepreneurial friends in Estonia, ‘Hey, you need to have your company based in the UK’.”
Lithuanian Rytis Vitkauskas chose London as a base for his last-minute ticketing app YPlan for similar reasons. “My number one choice was London because it’s a hub of entrepreneurship and finance.”
While the wave of eastern European immigrants in the mid-2000s were accused of taking British jobs, start-ups like these are creating work for Brits. TransferWise employs 15 people in London, Brainient 10 and YPlan 30.
“We’ve created jobs, hired from universities, trained interns – that’s a good impact,” Vitkauskas says.
While the government is encouraging students to study more technical courses to meet a growing digital skills gap, many eastern European countries are already producing graduates well equipped to build digital and technology businesses.
“Slovenia is really good for technical skills,” says expat Tine Postuvan. “We have a lot of developers. They’re a little bit cheaper and the knowledge is really good compared to Ireland or the UK.”
The business he co-founded, Equal Eyes, which makes smartphones accessible to the visually impaired, moved to London last year to join Telefonica’s Wayra, a project that helps start-ups by offering free desk space and mentoring.
“We knew we had to go to a bigger market,” says Postuvan. “It was basically between the States and London. We were accepted into the Wayra accelerator and we’re here because of it.”
Schemes such as Wayra are helping to attract developers to Britain as the country’s digital economy grows. Despite the fears over the strain on welfare budhets and jobs, eastern European developers may well become the new “Polish plumber”.
The ‘out of europe’ chorus is swelling
Hotelier Rocco Forte and Dragons’ Den online entrepreneur Julie Meyer are among the latest business names to back a campaign to renegotiate Britain’s membership of the EU.
Business for Britain announced its latest signatories as it unveiled a poll that found almost half of businessmen and women want a referendum on whether to remain part of the bloc. Only 30 per cent were against holding a vote.
The Eurosceptic group was launched to much fanfare in April, with former Marks & Spencer boss Sir Stuart Rose and Phones4u founder John Caudwell among its first batch of more than 500 backers. An additional 250 have now joined the campaign, which is the nemesis of the EU-supporting Business for New Europe group founded by Roland Rudd, the City’s foremost spin doctor.