How we shape a vibrant economy, navigate the uncertainty and come out of Brexit more resilient than before.
When Theresa May triggered Article 50 to start Brexit on 29 March she hailed it as a "historic moment from which there can be no turning back". Within weeks the Prime Minister also announced a General Election to be held on 8 June 2017, heralding a further opportunity for voters and organisations to shape the Brexit debate.
The question is, will the UK look back at this time as a catalyst for positive change or a missed opportunity?
Recently, Grant Thornton brought together experts from across the country in a spirit of co-creation to discuss the challenges and opportunities, Brexit offers at our Top Track 250 roundtable event. The conversation focussed on how we shape a vibrant economy, navigate the uncertainty and come out of Brexit more resilient than before.
There were some key matters that seemed to be on everyone’s mind.
Some UK businesses, have benefited from the devaluation of sterling such as UK manufacturers, for others increasing export costs represent a huge challenge. As with all instances of political upheaval and structural change there will inevitably be winners and losers.
However, key note speaker, Ron Jones CBE, founder and executive chairman of independent TV producer Tinopolis, made an interesting observation. “Much of our revenue coming out of the UK is typically priced in dollars around the world. The model that we’ve ended up with, not by design, is actually already an international model…in many ways, reflecting that more complex landscape of international relationships that comprise modern business.”
The key learning I take from this is that businesses already operating an international model will find themselves to some extent futureproofed against national and local currency fluctuations. For those who have not done this yet, Brexit is a catalyst for change that can drive them towards a stronger and more resilient model.
Everyone at the discussion largely agreed the time was ripe to deregulate. Banking has become too complex and onerous. Brexit uncertainty has, in the short-term at least, intensified the problem – making banks are more cautious than ever. Clearly, this is stifling business and potentially making UK-based organisations less agile and competitive.
If Brexit achieves its promise to make Britain open for business and if we are to build a truly vibrant economy, as Ron Jones said, “Simplifying regulation to allow UK businesses to flourish rather than being hamstrung by regulation will be key.”
Operating internationally is not just about navigating cross-border regulation and currency fluctuations. Possibly the most important and challenging issue organisations face in a global economy is cultural.
Ron Jones is particularly aware of this given his organisation is in the “culture business” making television programmes. Programme-makers in the UK are not necessarily fit to make programmes in the United States because there is a different feel to programming that can only truly be understood by those embedded in those communities. When operating internationally, he always opts to use local companies that he knows and trusts or individuals that are embedded in the culture.
There is a valuable learning here that can apply to any organisation, not just those that are in the creative industries. As potential trade barriers increase, good partnerships with trusted organisations or individuals on the ground who are embedded and understand the culture of the customers businesses reach out to will be more important than ever. As Ron Jones said, “That’ll be the thing that gets us in. It won’t be tariff barriers that will keep us out.”
One of the major issues on everyone’s mind right now is talent. Can we keep foreign talent already in our employment? How can we source the best talent from around the world? If we cannot access talent from abroad do we have the skills in the UK? What is being done to train or re-train our workforce to power the new economy?
The reality is, Brexit will mean the UK will almost certainly have a smaller workforce so the key to our future prosperity will be two-fold. Firstly, we need to resolve the uncertainty around the status of EU nationals currently working in the UK. Secondly, we have to act now to train an army of young people to meet business needs in two years when we officially leave the EU.
The UK needs a strong infrastructure strategy that will make us globally competitive, attractive to inward investors and Brexit-ready. We have to move ahead with plans to increase our aviation capacity, road and rail networks and renewable energy. It is critical that we bring our broadband capabilities up to speed. For example, it is lamentable that according to OFCOM’s December 2016 Communications Market Report, only just over a third (37%) of the UK has superfast broadband. We need to modernise and maximise our infrastructure now. There is no time to waste.
Time to act
Despite the challenges and uncertainty that Brexit has generated, the UK is going through an incredibly exciting time. Brand UK is a powerful one – and we have an opportunity to leverage ourselves on the international stage. We are currently a magnet for talent, and we must build on this.
Businesses are not passive bystanders but key movers shaping post-Brexit Britain. We have an opportunity to lobby government on critical issues such as talent, regulation, trade and infrastructure; and push for a transition plan that reduces uncertainty and boosts business confidence. We need to encourage government to put in place policies that help corporates prepare for Brexit, such as tax credits for exporters and access to funding for internationally trading companies.
Individual businesses can also improve their business models to become more robust and less vulnerable to national economic headwinds. It is time to internationalise, increase trust and integrity, drive sustainable growth and build thriving environments.
Now is a time to innovate and co-create, to ensure that Brexit is a catalyst that unlocks the UK’s potential; and that the UK comes out of it stronger and more vibrant than ever before. I truly believe that if we take the right actions now, we look can back at this moment, not as a missed opportunity but as a golden one.
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