Following the UK vote to leave the EU, many international businesses planning to expand to the UK – or who are (or were) already in the process of doing so – are asking what to do now? How do we proceed?
Below we outline some key facts and also our general perspective.
Obviously, every company needs to consider its own position within the context of its overall business and market sector. Should you have any general or specific questions relating to your own market expansion and what to do next, we are very happy to discuss this with you.
We pride ourselves on our integrity and advising our Clients appropriately to enable their business goals to succeed, so do feel free to set up an appointment knowing that we seek to offer you the best and honest advice at this time.
- There will be some short-term economic fluctuations as predicted but there are no fundamental economic or structural changes to the way we do business. The underlying drivers as to why the market is good for expansion here remain.
- The UK is still the 5th largest economy in the world in is own right; no. 2 in the financial and professional services world and world leaders in technology, standards, data security, life sciences, education, creative services, ecommerce, premium branded goods and many more. This fact has not changed and will not. Your reasons for choosing the UK for exploiting opportunities in this market should still hold true.
- We have one of the greatest pools of concentrated, educated and entrepreneurial talent in the world – a mixture of our own talent and those from countries all over the world with relevant skills in our key markets. This will not change.
- The UK will now become even more focused on attracting skilled individuals and entrepreneurial and world-class businesses from all over the world, particularly in the sectors where we are world leaders.
- The UK will always continue to trade and work with the EU. Just like Norway and Switzerland there will be extensive agreements in place to do so. These agreements will apply to all sectors and industries and will include agreements for the movement of people and services also.
- For many, the UK has just become more attractive. As a ‘newly liberated territory’, non-EU territories have now prioirtised negotiations for new trading deals with the UK. This includes India, Mexico, Australia/NZ, South Korea, and others, who view the opportunities that the UK market offers as highly attractive. (The EU bloc has significant gaps in global trading agreements with economic powerhouses such as the US, India, Japan, China and Australia due to the difficulties of negotiating such agreements with 28 different states. Money Week 30/6/2016)
For you specifically, what does this mean for your expansion plans and activities?
- If you had already decided to expand to the UK and have a strategy and plan in place based on a thorough assessment of the opportunities and challenges, your opportunity is still likely very valid. Do the underlying assumptions on which you have built your business case still hold true?
- As nothing will change in the majority of sectors in the short or medium term, there is no reason to change your plans or activities.
- Opportunities in the mid-long-term could improve in some markets as the UK seeks to secure its leadership in those markets through attractive economic measures, and a greater independence outside of the EU.
- A key implication for some international companies in some sectors at the right stage of their market expansion cycle is not to hold or run, but to seize the moment. If you have already committed to expanding in the UK for the right reasons, continuing your expansion whilst others falter or fail to act, can lead to you capturing and establishing a solid market position. In uncertain times, those with certainty and commitment, typically prosper. (There are good examples across the world at times of uncertainty where this has proven to be the case.)
- Not a reason to commit, but certainly something to think about in the short term: a current weakening of sterling means an opportunity for some investment. For some, this may present a short-term opportunity for research, marketing, PR, or sales development, interim recruitment, or other early market entry activities.