According to a report issued to BBC by the UK’s Office for Budget Responsibility chairman, Mr. Richard Hughes, Brexit is estimated to lower the British GDP by 4 percent in the long run, which is twice as much COVID-19 pandemics is predicted to diminish the Gross Domestic Product output in the forthcoming period. The OBR’s chairman stated that the supply chain industry has taken the most severe blow of Britain’s exit from the EU and that these issues caused supply problems for numerous business owners as well as individual consumers.
The effects of Brexit on the startup environment are complex and where one door gets closed another opens up wide but who’s keeping track of the windows?
As numerous reports by startups owners in London, and across the UK for that matter, state talent acquisition is the main problem since the British voted out of the EU. A lot of startups are forced to look for employees in a rather restricted market which makes the potential to hire the best person for the job rather difficult as the choice falls only on the UK talent pool. Things are pretty much different for the tech industry as there is still a chance to hire people remotely, and thus overcome the immigration restrictions that came as the result of Brexit.
In addition, numerous companies from Europe and America hire people from the UK for remote job posts, which is a common practice among tech startups and large corporate entities. A fine example of a European company that hires people from the UK is the popular video streaming platform Flowplayer.com that’s based in Sweden but hires remote workers from the UK among other countries throughout the world. On the other hand, having a worker from Britain move to the EU could be an issue or simply demand a lot of paperwork and waiting, all of which reflects negatively on the appeal of Brits as a workforce.
After the referendum results took place, business owners in the UK started experiencing issues with access to their partners across the English Channel. Additional paperwork, customs expenses, as well as a series of other legislative concerns make it difficult to arrange a profitable business operation outside of the UK borders. These problems mostly hit startup owners within the manufacturing industry because they depend on an uninterrupted supply chain and low export fees so they could stay competitive on the EU market.
As for the tech industry, things seem to be looking better than ever for Brits, as London becomes an unofficial AI capital of Europe with companies invested in this technology grew by 50 percent during 2017, just one year after Brexit. According to most recent statistics, there are currently 758 companies in London engaged with AI development, which is more than there are in Berlin in Paris combined. Tech startups in London, Leeds, Coventry, and several other cities in Yorkshire and West Midlands provide a positive growth environment for startups engaged in the tech industry as well as numerous microbusiness solutions.
Brexit made a powerful influence on the workforce migration process, making it difficult for talents from the UK to move to Europe and vice versa. However, the fact that Britain is such a tech industry powerhouse allows the Brits a chance to dream big and start new businesses in those industries that aren’t affected by Brexit.