The United Kingdom is facing turbulent times. Brexit negotiations have not yielded any results so far. The European Union bloc is well prepared for post-Brexit challenges.  It is welcoming companies seeking an exit from the UK.

The British population is now concerned about the economic future of the country. Once popular, the Brexit referendum is losing its appeal. This is evident from the recent anti-Brexit rally and demand for a second referendum.

The modern world is a global village. The financial markets never sleep. Physical commodity trade volumes have touched new highs. Virtual workforce is there to assist the companies at all hours in any part of the world.

There would have been no concept of a global village if technology would not have progressed. Each economic sector is running on the rails of technology. The big tech companies have nothing to worry about  in regards to political or geopolitical events occurring in any country or region of the world. Tech companies are the biggest beneficiaries of this connected economy.

Alibaba, the Chinese tech giant is a respected name in the world of technology. Alibaba is still known to many as an eCommerce portal. However, Jack Ma, the Cofounder and Chairman of Alibaba, diversified the company business to provide a variety of tech services. The most notable achievement of Alibaba was capturing the payment industry of the Chinese market by launching its Alipay digital wallet.

A lesser-known business segment of Alibaba is its Cloud computing platform. Alibaba is racing to catch up with Amazon Web Services (AWS), Microsoft Azure and Google Cloud. It is undergoing rapid expansion and is offering hi-tech Cloud solutions to its customers at affordable rates.

Alibaba and the United Kingdom

Alibaba could not have come at a better time for the UK.

CNBC (22 October 2018) reports:

“Alibaba opened two data centres in the UK on Monday, further expanding its cloud footprint in Europe. The new facilities (both in London) are the Chinese tech giant’s first in Britain, and will provide its business customers in the region with round-the-clock security and engineering support and real-time monitoring”.

Alibaba has not yet disclosed the size of investment and the number of jobs it will create. However, the company says: “We are expanding quickly across Europe, and we are always looking for good talent to join our team”.

While announcing this news, the company spokesperson gave a broad picture of Alibaba’s operations in perspective of this investment decision. However, the extracts relevant to the UK economy are stated below:

“Our decision on the location is driven by the rapidly growing customer demand in the UK”

“The United Kingdom is one of the fastest growing European markets for Alibaba Cloud, and many of our customers are in key verticals such as retail, finance, media, education and research, and logistics”.

About Alibaba Cloud

The service started in the year 2009. Synergy Research Group in its June 2018 report ranks Alibaba Cloud as “the fourth biggest global provider of cloud infrastructure and related services”.

Alibaba’s Cloud unit now has 52 data centre zones (including 2 new London sites) across 19 different regions.

Alibaba is not alone to invest in the UK (this week!)

CNBC (19 October 2018) reports:

“Amazon is set to open a new office in Manchester and will hire more than 1,000 new staffers to work on research and development in the UK”.

“The USA tech giant said it would hire additional roles in Manchester, Edinburgh and Cambridge as part of its boosted investment in Britain. Its new Manchester base alone will lead to the creation of 600 jobs, the firm said, indicating a serious investment in England’s North. It will also take on more than 250 high-skilled staffers in its Edinburgh development centre and 180 in its Cambridge facility”.

Commenting on this development, Amazon’s UK Country Manager Doug Gurr said:

“With the UK taking a leading role in our global innovation, we are delighted to announce plans to create capacity for over 1,000 new highly-skilled roles across the country. These are Silicon Valley jobs in Britain, and further cement our long-term commitment to the U.K”.

Tech Companies and the UK – a delicate Alliance

The increased interest shown by big tech companies in investing in the UK is a good sign.

After Amazon’s announcement of the UK business initiative, the British International Trade Secretary Liam Fox expressed the country’s aim to promote foreign investment.

“Ensuring that the world’s best and brightest companies continue to invest and innovate in the UK is at the heart of our global Britain agenda”.

“Amazon’s decision to create hundreds of highly skilled jobs in Manchester, Edinburgh and Cambridge is an enormous vote of confidence in the UK and a signal to the world that the UK is very much open for business.”

There is one problem that might raise tensions with foreign tech companies wanting to invest in the UK. Britain’s Finance Minister, Philip Hammond wants to introduce “Amazon Tax”. This proposed tax (or any other alternate plan) is to level the playing field for all online retailers.

The specifics of this new tax have yet to be drawn, but the Finance Minister has voiced his thoughts to tax all online retailers based on “value generated”.

Time will tell what will be the outcome of the British tax plan. It is a delicate matter as companies investing in the UK in the middle of Brexit storm might not warm up to paying new taxes.