A global view: British business in a post-Brexit world
25 Nov 2019
As the UK prepares to leave the EU, many businesses are concerned about the ramifications. But panellists at our global conference pointed out the view held by government that leaving one trading bloc did not mean leaving the wider international stage. “It's the opposite. We are leaving one bloc to take a fully global view."
The discussion centred around business in a post-Brexit world, a timely topic as it took place on 31 October, the morning the UK had planned to leave the EU.
The expert panel tasked with debating the issues and opportunities included Jules Chappell, managing director of London & Partners, the Mayor of London’s promotional agency; Jacqueline de Rojas, chair of techUK; Jimmy McLoughlin, a former business advisor to Theresa May during her time as prime minister; and Sir Kenneth Olisa, one of the UK's most successful entrepreneurs of the last 30 years, now Lord-Lieutenant for Greater London.
While the panel acknowledged the damaging uncertainty from the UK's stalled Brexit process, it also highlighted a bigger picture. That leaving the EU could stimulate a rethink of the UK's regulatory environment, generate support for skills and entrepreneurs, and so foster innovation and growth.
Challenge and change for the workforce
"There's a misunderstanding that disruption is a bad thing," said Olisa. "If you are used to doing something the same way, day in and day out, and someone comes along and does it a different way, then there's value creation. Business as usual is not the answer."
This extends further than just innovation in technology, he added. With the strength of the UK’s legal and professional services, for example, organisations in that sector can be thinking more creatively about how to solve a broader range of business problems. "We've got energetic young people, a culture where it's ok to start your own business, and in this country we have lawyers, accountants and others who are trying to find a new mission,” said Olisa. “If they can all come together then the UK becomes a cauldron of development.”
Such a step change will require new skills, however. De Rojas points out that the challenge for the UK's workforce post-Brexit might be less about creating jobs than filling jobs from its domestic workforce. She adds: “By 2022 the country will have 1.2 million unfilled jobs in the technology sector. The UK has work to do to create more science, technology, engineering and mathematics skills across the population. If we are to address the markets we seek to serve, we must do more to attract diverse talent in all its forms”.
Reforming the visa system
The EU operates a single labour market, which means that hiring from other countries in the Union does not require a visa. Yet, domestic and political concerns over aggregate immigration mean hiring in-demand skills from countries like India is difficult and the debate over immigration divisive.
The panel agreed that having control of a reformed visa system was an opportunity to hire globally to match skills shortages.
McLoughlin predicts we will end up with a better-equipped system. "In the EU we had access to 500 million people. You could offer them a job on Friday and they could start on Monday. Outside the EU it will not be that simple, but we will have a proper national conversation about how we attract the skills that we require, or how we are going to train British people," he said.
Moving regulation forward
McLoughlin also argued that the chance to build innovative regulatory structures to foster emerging industries would spur UK growth.
"When the world history books of this time are written, Brexit will be mentioned. But there will be entire chapters dedicated to autonomous vehicles, clean energy and other innovations. The opportunity is there for the UK to be more nimble and create regulation that works," he said, citing fintech as an example where the UK was able to design its own regulation and encourage the sector to flourish.
De Rojas agreed. "In cyber and fintech we’ve already created trusted regulatory and legal environments that lead the world. The question is, how can we align with our near neighbours in the EU and also continue to play a leadership role for the rest of the world?"
Generating one-third of UK gross domestic product, and perhaps more exposed to foreign markets, London is increasingly discussed in different terms to other cities. So, is Brexit more of a threat to London's economy than to the rest of the UK?
No, said Chappell. "One of the big advantages is the global diversity of the city and that is a huge driver of investment. If you're going to build a product with global appeal, why not come to a city that has global talent and global research at the heart of it?"
We do not yet know when the UK will exit the EU and under what conditions, but all agreed that the most important change will be thinking differently about how we regulate and develop skills to drive growth. Olisa concluded, "Mindsets in this country have been fundamentally changed. That doesn't go away whatever we do about Brexit."