Brexit: A Time Of Opportunity For UK Business & Executive Search? Part One
20 December 2017
Brexit Blog Post Series
This is the first installment of our 2-part Brexit blog post series. We are publishing our Brexit whitepaper, split into 2 blog posts, each covering a section of the whitepaper:
Blog Post One: Why Britian Will Get A Good Brexit Deal & Why Brexit May Create A better Environment For UK Businesses
Blog Post Two: Why Britain’s Core Strengths Present A World Of Opportunity, And What Brexit Means For Your Executive Search
The key takeaways from this blog post series, and our Brexit whitepaper, are:
- The feared “Brexodus” has not materialised, with companies maintaining, and in many cases vigorously expanding, their UK
- Brexit negotiations may well see the UK maintain access to the common market without the many restrictions of EU
- Britain’s core strengths: Its knowledge-based industries, business infrastructure and geographical position remain immune to any political Major companies seek to make their UK presence more significant to take advantage of these strengths and of global growth opportunities.
- The above facts combined mean the need to find the best executive talent should remain a top priority for companies in the Having executives who think creatively and spot oppor- tunities early, can give businesses a competitive advantage during this time of change.
Brexit – An Opportunity For UK Business
The news may be awash with negative Brexit stories, but if we look beyond the attention-grab- bing headlines of the press, the data actually shows continued strength in the job market, a resilient economy and corporate optimism.
There are many, objective and convincing facts that show clearly how Brexit will be an extraordinary opportunity for the UK in terms of business, economic growth and innovation.
Why Britain Will Get A Good Brexit Deal
One possible outcome of the negotiations will be a "soft" Brexit. This could see Britain adopt the Norwegian model, namely full access to the EU-28 market but without the budgetary or legal restrictions mandated by EU membership.1,2 There are many reasons for this scenario to happen, based on the economic and political realities of the UK and EU:
Trade with the UK is very important to EU employment, accounting for:
All EU members have the utmost interest in preserving these jobs, especially in view of the weak economic situation present in most of southern Europe.
A total of 2.9 million EU citizens work and live in the UK, including:
Other EU member states gain from the remittances of these workers (£1.2 BLN was sent to Poland alone in 2015).
In addition, EU citizens in the UK have a higher propensity of being business owners than the general pop- ulation: There are 3,000 French-owned businesses in the UK, employing 400,000 workers and turning over £120 BLN annually.
EU countries would suffer significantly were their citizens to return to their homelands without immediate job opportunities, so ensuring that this status quo is not broken, is a fundamental EU prerogative.6
- EU exports to the UK were £312 BLN in 2016,
- UK exports to the EU were £241 BLN in 2016.
The above results in a trade surplus of £71 BLN in favour of the EU.7 Germany’s trade surplus of €50.7 BLN with the UK in 2016 constituted 20% of its total.
What does the above mean? It means the EU has no incentive to hinder trade with the UK, due its favour- able position, especially as the UK is the EU’s 2nd largest export market after the USA.
Why Brexit Will Create A Better Environment For UK Businesses
With Brexit, the UK is set to put itself and UK business at a competitive advantage on a global basis, thanks to many new opportunities:
- Less Taxes – Major political and business personalities are expecting the UK adopt a very favourable taxation regime in the run up to Brexit and Chancellor of the Exchequer Hammond indicated in early 2017 that the UK would seek to lower taxes to boost its long-term attractiveness for investment and business.
- Better Economic and Political Agreements – The UK can fully leverage its strong cul- tural and historical ties to create new trade deals with dynamic markets, including the USA, China and the 52-members of the Commonwealth. The US government has indicated its desire to create a special passporting system between the UK & USA to increase financial links between the two countries.This will also put the UK in a perfect position to take advantage of the strong economic growth of the Asia Pacific and African regions. The EU economy, as measured by its current 28 members, has shrunk from constituting 30% of GDP in 1980 to only 15% today.12 Starting in 2009 and continuing to date, the UK has sold more goods and services to non-EU countries than to the EU.
- A Business-Friendly Immigration Policy – The UK will likely regain full control of its bor- ders and immigration policy. This could enable it to choose what immigrants can come into the country, based on the needs of business and A tiered immigration system, as those present in Australia and New Zealand, would put an emphasis on attracting high-skill workers. The UK could therefore consolidate its already strong position as a magnet for international and European talent. Furthermore, as the UK may more easily bypass the EU’s migration crisis, this will make for a safer social and economic environment for businesses in the long-term.
The World's Leading Companies Bet On Britain
Not only are companies continuing to invest in the UK. There are also more and more examples of world-leading multinational corporations planning to expand their UK operations significantly in the future.