How Marketing and Technology Firms are Evaluating Brexit

The people of the United Kingdom have finally voted in favor of Brexit. After all the debates and discussions the ayes have it and the UK is set to exit the regional bloc. However, the economy is the common point of concern for almost all. Several surveys have been conducted since the proposition gained heat, and going by the polls, majority of the business community is against Brexit.

Loss of Influence

Those who oppose the UK’s exit from the EU mainly underline the friction that would be caused by the change in socio-economic policies as the main concern. Many like Russ Shaw, who is the founder of Tech London Advocates, are of the opinion that policy incompatibility between the UK and the EU in the wake of Brexit would deprive the country of a rich market comprised of 500 million customers. They argue that the exit will push the country to start building up their economy from scratch if its leaders agree to align their policies with EU’s policies to continue smooth and seamless trade.

CONTENT THAT CONNECTS: WHY INFLUENCER MARKETING IS THE FUTURE OF GEN Z ENGAGEMENT

Gen Z is a business opportunity you can’t afford to miss. As 40% of the population commanding upwards of $40 billion in spending power, modern marketers need to build compelling strategies to engage with Gen Z.

Download

Further business leaders are ruing what they are terming as Britain’s ‘loss of influence’. Sir Martin Sorrell, CEO of WPP, had already voiced his concerns about the potential fallout of Brexit at Advertising Week Europe. He noted that if the UK does leave the EU single market, “clients will close plants and jobs will go,” This comment is made more significant by the fact that the advertising industry in Britain not only has a strong presence, but is known for exporting their services across the region. In fact, according to a report, Britain exports close to $5.46 billion (£4.1 billion) in advertising services.

Regulatory Challenges

A significant challenge that could crop up at this point could relate to an overload of regulatory challenges. As part of a regional whole, UK was part of a ‘multi-nation market’. The country was subject to rules and regulations that applied to all the member nations. In addition exiting the Union also cuts off easy access to a ready market of 500 million consumers. In addition adopting technological changes across the continent is also easier when all members can function under the auspices of a singular umbrella of regulations. London business owners have clearly stated that setting up continental operations was easier because of ‘harmonized EU regulations’.

Talent Crunch

In an inevitability that was bound to occur, talent regulation and immigration concerns are coming to a head in the ongoing debate surrounding Brexit. The recently implemented no-work visa facility along with a slew of other developments have served as a deterrent in acquiring and retaining the most suitable talent for their businesses. In addition due to recent political events there has been a swell in anti-immigrant feeling in many layers and sections of the socio-political zeitgeist.

However, bridging skills gaps are a major concern for tech companies, and nearly 80 percent concur that Brexit amplifies the problem. Statistics show that more than 1.5 million people are employed in the digital space and one in every three come from outside the UK. This is an industry that continues to grow. While Brexit might not deter applicants from outside the UK, increased bureaucratic regulations will mean greater delays and higher costs for firms trying to recruit.

An Uncertain Future

Many businesses have already started facing the heat, with investments halted. Investors’ skepticism is rooted in the lack of visibility into the UK’s economic future – how much markets would fluctuate, which firms will benefit from Brexit and which will lose, and so on. Only companies like Twilio, which mainly has business in the US and has even made the IPO there, are relatively less concerned. There are many big names opposing Brexit, such as BT, Microsoft, Ford, Vodafone, Virgin Media, Spotify, O2, among others.

For those supporting Brexit, such as Dyson, one of the major argument is the trade imbalance with Europe. The sentiment of Brexit supporters is summarized well by Dyson, "They have different languages which, for an exporter, means that everything from the box to the instruction manual has to be in a different language. The plugs are different. The laws are different. It's not a single market. The only communality is that there's no tariff, but the pound going up against the Euro is far more damaging than any tariff. If the pound rises, £100 million is quickly wiped off."

It was recently reported that none of Britain’s homegrown unicorns (post-millennial companies valued above $1 billion) have overtly come out in support of the Brexit vote. Spokespeople from Funding Circle, a financial technology startup was quoted as saying, “A successful, well-functioning Europe is crucial to a business like ours and we believe this is best achieved by remaining part of the EU.”

The fact remains that the UK can avail of regulatory and bureaucratic benefits by remaining part of the European Union. What the future serves up, however, is still in question.

On the other hand supporters have stated that this development could mean a revitalization of ‘Brand Britain’. Others remain positive and hopeful based on the belief that the tech market in the nation can whether the storm created by Brexit. As Tudor Aw, KPMG tech sector head, UK, says, "The core attributes that make the UK sector so strong and attractive remain in place,"