How Brexit Will Affect The UK business & Tech Markets
Although Brexit is now in full effect, the actual effects are yet to be seen. However, as 2021 moves ahead, agreements have been reached. The question is not if, but when? When will the new changes actually start to be felt by parties most likely to feel them? Being part of the EU had major benefits for both Britain and EU member states – revolving mainly around travel, business, and with it, commerce.
One of the major sectors that are sure to be affected by the aftermath of Brexit is the tech sector – a sector of vast wealth, resources and with tentacles that spread into so many facets of business and commerce. Which is why one of the biggest questions being posed is how will Brexit affect UK business and tech markets on a domestic level and an international one?
Bureaucracy, red-tape, paperwork, administration – it’s all the same. One would have thought that as technology advanced further that admin would advance less. However, it would be foolish to make such an assumption; the best one could expect is that admin has been streamlined and made more efficient thanks to the inroads of technology.
Brexit has regrettably created regulatory issues for various businesses and with it, extra paperwork for UK companies that have business ties with the EU.
For a UK company to export its goods and services, it needs to comply with the rules and restrictions of the destination country while also obtaining licenses and certificates to make sales. A lot of these bureaucratic structures have to be re-looked now. As a result, and to bypass revisiting a series of procedures and red-tape, parallel distribution has come into play; meaning that companies from the UK have simply set up branches or distribution centres in the EU to provide their service from an EU location. Some might call it ‘business as usual.’
Brexit brought with it limited movement and as a result the UK now has a points-based immigration system. As far as tech workers and skilled workers are concerned, movement will still be relatively easy. It will however be a tad burdened by more bureaucracy. Skilled workers from the
European Economic Area (Iceland, Liechtenstein, Norway, and Switzerland) will need to apply for a visa in advance if they’re to find work in the UK while UK workers looking to go to Europe will need to check the requirements of the selected country. Business travel is also in for a couple of changes.
From next year (2022) onwards Brits will need a European Travel Information and Authorisation System every three years in order to commute to the Member States. Their passports will also need to valid for at least 6 months.
Tech sector growth
For the longest time the UK has been a country possessing the capacity to foster a business to the point of market engagement. It’s been a great incubation chamber for businesses.
Now that Brexit has come along it’s likely to infringe upon the UK’s tech sector development. Companies might find that the legalities of the UK are more accommodating, however, the UK market itself is small in comparison to the rest of Europe, hence such companies might instead set up shop in the EU instead.
However, there is also a growing belief that Brexit is an opportunity for the UK’s tech sector if the government takes certain actions which in turn can make the country a more dynamic, appealing, and attractive market. In essence, this means that the UK could appeal to the broader international market if it makes a change to its visa rules and this could make an impact on exchange rates between USD and GBP’s. Thus far recommendations to the government have included making the UK the type of place where tech companies can easily sell and test new services, thus making it known that the country welcomes people with new ideas.