How to prepare for Brexit
The technology sector must recognise and seize its opportunities. Although IT companies may be concerned about the challenges that Brexit poses those who prepare themselves can use the opportunities to their benefits.
Many people and organisations are worried about Brexit. Brexit will be a storm causing changes in IT industries around the world. The details of the deal between UK and EU are still very uncertain. This has been highlighted by the recent resignation of British Foreign Minister Boris Johnson. Many details of a Brexit deal are still under discussion and they do not all look positive for the IT sectors.
At first the tech industry will notice that organisations IT expenses will decrease, partnerships with companies based in the United Kingdom will become more difficult and American companies will have to reconsider their European adventures now that England in particular will no longer be a natural springboard to the European market.
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Brexit opportunities and threats
Even though analysts predict organisations will at first try to cut costs on their IT budget they advice that it is much better to keep investing in current IT and IT development.
Below an overview of a few possible consequences of of Brexit:
- Concerns about immigration laws can have a devastating effect on the availability of (foreign) IT talents because IT talents will very likely leave the UK for other European countries.
- The development of product and service innovation will slow down as British companies have to put more effort and time into working together with innovative companies from the EU.
- Uncertainty about the privacy regulations and less access to data will hinder companies in gaining customer insight.
- Financial services (fintech) will potentially shift from London to the continent (Amsterdam, Frankfurt).
- The manufacturing industry and automotive industry will possibly move their innovative initiatives outside the UK.
Despite of the anti-immigration sentiment in the UK analysts suggest to make the acquisition of new IT talent from outside the country a top priority. In addition the UK has to speed up the composing of our own privacy standards and the conclusion of an agreement with the EU and the US on the use and sharing of data.
Brexit and IT expenditure
IT expenditure has slightly gone up in the UK in 2017 compared to 2016. This is a good trend however it is difficult to predict what the final Brexit deal will look like and how it will effect IT expenditure. In general uncertainty is not good for any market.
To once again emphasise the impact on IT spending: the UK is Europe’s largest IT market and accounts for no less than 26 percent of the total spending in Western Europe, compared with 18 percent to Germany’s contribution, which is the largest economy in Western Europe. This is mainly due to the large use of business services in the UK and its consequent investment.
Even though there are still a lot of uncertainties around Brexit it is important that your organisation keeps investing in IT infrastructure to keep up with demand and development. At Tech-Wales we provide excellent business IT services and cloud computing services to prepare your business or organisation for any outcome of Brexit. Do not hesitate to contact us.