Alphabet (GOOGL) and Apple's (AAPL) recent London investments mask a deeper concern for the city's future as a global tech hub as the government grapples with Brexit and rivals in Europe and Asia attempt to lure talent.
Google's plans to build a new London HQ in the city's King's Cross district and add 3,000 new jobs has been seized by the British government as a validation for its post-Brexit future. The move follows Apple's decision to shift 1,400 of its staff to London's Battersea Power Station, best-known as the photographic backdrop to the famous Pink Floyd album "Animals". Amazon (AMZN) also appears committed to its new east London office in Shoreditch in an area known as 'Silicon Roundabout'.
But in a fast-paced technology industry where speed matters, some say Brexit confusion - a leaked memo Tuesday accused the government of having "no overall strategy" for leaving the EU - has complicated re-location and investment plans.
A survey conducted by London's Magister Advisors showed that a non-U.K. software company placed 100 engineers in Germany rather than Britain immediately following the June 23 referendum and a fintech company decided in August to shift dozens of jobs to Dublin.
"I reckon people will be making decisions during next year," said Magister's MD Victor Basta. "These companies are growing 50% a year. You can't tolerate three years of uncertainty. If there is a degree of uncertainty by late next year, it will force a bunch of people to make decisions they otherwise didn't have to make."
Derek Boyd, CEO of NMI, which represents 324 electronics and semiconductor firms operating in the U.K. such as Germany's Infineon Technologies (IFNNY) and the Netherland's NXP Semiconductors (NXPI) , said that while he does not think employers are "upping sticks from the U.K. and moving elsewhere at the moment," he has heard they are looking to expand elsewhere for talent.
"Where I know employers are looking closely is the need to seek a route to expand and recruit jobs, expand their businesses and recruit new engineering talent," Boyd said. "If there isn't enough in the U.K., then they're more likely to have to recruit outside the U.K."
Employers aren't worried about current staff being sent home, Boyd argued, but are nonetheless keeping expansion options open should Brexit lead to tighter immigration policies, with an eye towards France, Singapore, Taiwan and the United States.
Still, while Berlin and Paris have increased their competitiveness and Barcelona and Lisbon are viewed as tech hubs in-the-making, London continues to tick all the right boxes, an investor said.
"You probably have twenty criteria to start a business," said Julian Riedlbauer, partner with GP Bullhound, an M&A advisor for the tech sector. "But when it comes to funding, the ecosystem, other clients, London didn't change just because of Brexit. London reduced the number of boxes it ticks, but it still has a lot of boxes it ticks."
Rob Moffat, partner with venture capital firm Balderton Capital, also believes that London remains attractive. But, like Basta and Boyd, he thinks imports of new talent may become difficult.
"London is still by far the biggest hub for tech companies in Europe," said Moffat. "Some fintech firms may have to open EU operations if passporting doesn't survive Brexit, but [are] more likely to do so with new staff rather than trying to move existing staff with inevitable attrition risk."
Gilbert van Roon, CEO of London-based FinTech Compliance, said that following the Brexit vote, he noticed an immediate 'wait-and-see stance' from the clients he helps get authorization to operate in the U.K. from the Financial Conduct Authority.
"Has there been an exodus or threats of an exodus? Not yet," van Roon said. "These businesses, they're happy to make a decision if they know what the environment's going to be like. If you don't know, it's almost impossible to make a decision. The uncertainty is damaging."
(Alphabet, Apple, NXP are held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holdings here.)