The U.K. risks losing its position as the leader of tech in the region if visa quotas for skilled tech staff are not met as a result of the Brexit plan, according to analysis from Balderton Capital, a venture capital investor in Europe.

According to the report, the U.K. is still the most desirable destination by people outside the country who are looking for tech jobs, and the country has reaped the benefits of global tech talent. The report states that more than a fifth of tech workers in the U.K. were born outside of the country.

“Forty-one thousand non-native tech workers were hired in the U.K. last year, almost double the skilled visa quota,” said Balderton, “If EU workers were required to apply for visas following Brexit, this would cause a recruitment crisis for the tech industry.”

Hiring skilled staff is a “headache” for start-ups across Europe said the report, with talent hard to come by. At present it’s believed that three countries – The U.K., Germany and France – collectively employ two-thirds of all the people who work for tech startups in Europe.

The U.K. has the most startups in Europe, with an estimated 31 percent. Germany and France lag behind with 18 percent and 19 percent, respectively. Balderton foresees a worst-case scenario for Britain that could result in the number of startups dropping to 24 percent.

“Research shows that the attractiveness of the U.K. to this highly mobile workforce could decline rapidly and that the high costs of hiring staff who need visas could become a significant issue should policies towards skilled workers change significantly post Brexit,” said Balderton.

James Wise, a partner at Balderton Capital, said that London alone has benefited greatly in the past from non-natives choosing the city as the place to start a tech company, as some 40 percent of tech companies founded in London last year had at least one non-native founder.

Wise sees a possible turn of fortune. “The relative weakness of the pound since the referendum vote, together with developer’s willingness to be mobile and work in smaller tech hubs, could reduce the relative advantage the capital enjoys without proper policy support post-Brexit,” he said.

The report also says that London, Paris and Berlin together are home to as many developers as Silicon Valley. The top five companies from which European startup employees came are IBM Corp., Nokia Corp., Microsoft Corp., Accenture PLC and Google Inc.

Photo credit: August Brill via Flickr