DDonald Trump’s Commerce secretary Wilbur Ross suggested that other states should exploit the opportunity created by Brexit business uncertainty to wrestle business away from the UK.
Ross suggested to Cypriot financiers that they should take advantage during the “period of confusion”. It is therefore the responsibility of UK government and business leaders to thwart this desire to wrestle business away from our shores and to regalvanise support for UK startups.
Time to reignite UK PLC...
We need leadership from those with vision, from those who can demonstrate smart thinking & innovation during this time of uncertainty. Now is the time for a creative spirit not seen since the aftermath of the second world war. Leaving the EU is a a bit like starting a new venture...
Let’s face it- Ross is right about uncertainty and it stands to reason that other countries will seek to profit from Brexit but that’s not the whole story. There’s a boat-load of opportunity out there too.
Let’s consider some post Brexit referendum facts:
- British business growth has fallen to a four-year low since the Brexit vote.
- Only 39% of companies recently surveyed by the CMI said they had experienced growth since the Brexit vote; the lowest survey result since 2012
- 65% of companies surveyed by the CMI are pessimistic about growth prospects over the next 12-18 months with nearly half having a gloomy outlook on growth prospects over the next 3-5 years
- 35% said they "lack confidence in current UK leadership and management's ability to capitalise on post-Brexit opportunities".
So all that makes for gloomy times ahead right?
Not for the startup scene and here’s why: Times of recession and economic uncertainty create the perfect setting for innovative startups.
OK so here’s the upbeat side of our argument:
- Sterling is likely to drop further once article 50 is triggered, making UK investments a bargain for foreign investors.
- Some analysts suggest that the pound could plunge to as low as parity with the Euro, meaning that UK property and business investments will represent a real bargain until sterling recovers.
- Interest rates are likely to remain low, making borrowing affordable for UK startups. Despite likely inflationary pressures.
- A likely bounce back of sterling in the second half of 2017 could create the impetus for growth and a sense of vitality for the UK economy.
- Certain structures, services and systems currently provided for by Europe will need to be replicated and/or replaced for the UK, providing work for the UK firms who supply those services.
- Analysts at Deutsche Bank said a “big inflation shock”, the start of the EU exit process and hostile negotiations as Europe focuses on keeping the single currency together would push the pound down to “close to parity” with the Euro.
- The Office for Budget Responsibility expects wages to fall in the second half of 2017 as inflation bites, meaning that UK labour will be more affordable.
- While higher inflation can dampen consumer spending, it is also a catalyst for innovation and change.
- Parity with the Euro would be an incentive for the British to spend their vacations in the UK - with potential benefits for the UK leisure industry.
- If unemployment increases, there will be opportunities for re-training of individuals. This, coupled with introduction of the government’s apprenticeship tax levy provides interesting business opportunities within the adult training sector.
- A potential downturn in productivity and GDP present exciting opportunities in the co-operative & sharing economies.
- Fin-tech, virtual reality, big-data and third sector innovation around health care and catering for an aging population, all remain compelling sectors ripe for innovation and exploitation.
- The march of populism, increased cynicism in big-business and the integration of technology with financial services make for an unusual confluence of opportunity around subjects like peer-to-peer lending, bulk buying clubs and collaborative development projects.
The bottom line is that one person’s misfortune is another’s opportunity. If we keep our focus on problem-solving and driving our post Brexit economy by offering real support and visionary thinking to the start-up and SME sectors, we will provide the best possible chance of a of vibrant and sustainable future for us all.
Parting shot: Is now the time to start a Buy British campaign? In our next blog post we explore why timing has never been better...