Since the result of the EU referendum was announced on June 24 and the resulting political drama that followed we have all been bombarded with commentaries, reports, speculation (both positive and negative) and general anxiety about how the UK is going to function in a post Brexit world.
One thing is for sure, nobody can accurately predict what is going to happen and the exit isn’t going to happen for at least two years. Hopefully whatever changes occur will be a result of careful negotiations with our EU partners. In the meantime all of us are operating in a climate of uncertainty and we need to think carefully and plan for the times ahead.
In the days following the result, when it became obvious that the leaders of the Leave campaign had no detailed plan to deal with the new situation, the Governor of the Bank of England, Mark Carney, stood out as a voice of reason and calm. In his Opening Remarks to the Financial Stability Report on 5 July he clearly laid out the challenges ahead, and was frank about the risks involved, but at the same time had a clear plan to anticipate and deal with problems and seize opportunities in the UK’s new relationships with Europe and the rest of the world.
Two recent British companies that have been in the news for completely different reasons are ARM Holdings and Lowcostholidays. The success of the former is a result of technical ingenuity, an innovative business model and investment in well rewarded staff. The demise of the latter appears to be a result of cash flow issues caused by an adverse consumer reaction to the EU referendum result and the subsequent fall in the value of the pound. ARM Holdings prospered in the immediate fall out from Brexit and Lowcostholidays foundered because of it.
So how can businesses learn from this? Whether we wanted it or not Brexit is going to happen and we have to navigate our way through it. Here are four ways that we think will help beat the Brexit Blues and focus on what will be important:
1. Plan ahead for hurdles along the way and keep well informed.
Look for events and publications from industry and business specific sources that can offer practical information and opinion. Prepare for the worst case scenario but also try and think innovatively round the challenges that you can identify. Continue to explore new markets and seize opportunities where they arise. Continue to forge relationships with overseas investors and think globally.
2. Don’t forget the basic principles of good business practice.
Many businesses fail because of poor cash flow. Take advantage of current government initiatives such as R&D and Patent Box tax relief and the new £57.5million fund set up by the Innovate UK to develop innovative UK science and technology business ideas.
3. If you employ talented staff from the EU encourage and support them to stay in the UK.
Keep recruiting from overseas if that is what your company needs for its future growth. We believe that the Government will have to take account of the needs of technology businesses to have access to the brightest and the best from around the world.
4. If you need them, keep applying for European grants.
There have been media reports that European partners have dropped UK colleagues from grant applications but there is no evidence that UK applications are not being considered by the grant giving bodies. The European Research Council has a global remit as well as a European one. The Cambridge Development Forum has recently suggested that the future relationship between the EU and the UK may take more innovative forms leading to a more internationalist approach in science and research funding.
We believe that it is within the power of UK business to positively contribute to moulding the way in which the economy reacts to Brexit. As an example the publication last week of the Markit Purchasing Manager’s Index, showing a fall in output and orders in the manufacturing and service sectors, and tentatively blamed on Brexit, lead to an immediate fall in the value of the pound. However such volatility brings both pitfalls and opportunities and companies need to be flexible enough to rise to the challenge.
We believe that business must seize the opportunities created by Britain leaving the European Union. The next few years will be challenging, however too much doom and gloom could lead to a downward spiral. The UK’s record of entrepreneurial and innovative reaction to a variety of stimuli shows that the technology sector has the tools required to create business growth and to create the circle of positivity required to give British business the best chance of growing in the next few years.
Perhaps there is no need for the blues, in the words of Irving Berlin, “Let’s face the music and dance!”