One of the most shocking moments on the geopolitical arena in 2016 was the decision of the UK to leave the European Union. As a completely unexpected event that stunned the world, the voters in the England, Wales, Scotland and the Northern Ireland decided to take their country out of the EU. For practically all analysts and experts, the result came as a shock, but more worryingly, the same reaction was provided by the political establishment on both sides of the English Channel. In the immediate aftermath, there was no indication what would happen next, especially when it comes to the economic and financial repercussion of the decision.
Several months later, Theresa May, the new PM of the country, declared that the UK will trigger the article 50 of the European charter which begins a two-year separation between a country and the EU before the summer of 2017. Now, when it is clear that the UK will leave the EU well before 2020, many are wondering what will be the repercussions, especially when it comes to those who work in the tech and IT fields. Because of that problem, here is an analysis of the repercussion and Brexits affect on small and medium sized tech businesses operating in the country.
Loss of EU Funds
A range of funds of the EU which are now accessible to entrepreneurs and businesspersons of the EU will dry up with the separation of the two entities. This would be a big problem for all tech startups and small emerging companies which desire to somehow lessen the burden of starting a new business. The same would also apply for subsidies and any other forms of financial support coming from the EU funds. It is certain that the UK will not be able to replenish all of these in a fast manner, which places these current and future businesses in a tight spot if they received any EU financial support. Some might alleviate this problem by moving to the EU country, but not all of the startups can or could do this.
Potential Travel and Work Permit Issues
As pointed out in this article where WebCreationUK reviews the effect of Brexit on small businesses, the issue of immigration was one of the biggest in the Brexit referendum. But, once the UK leaves the EU, the ability to easily acquire work visas and other permits for EU citizens in the country will stop. The same will also mean that the British expats have to do a lot more to start working in the EU nations. All of this will provide a strain on the exchange of skilled labor, which is one of the most important factors in running a small and medium IT or tech business. Without the possibility of easy introduction new employees into their systems, UK companies will probably get into a position of being under-staffed with senior and specialist workers.
Access to a Single Market
Like with the movement of people, the movement of goods during any type of trading will also be different. When the UK leaves the EU it will also leave its single market. While many British politicians want to keep this agreement even after Brexit, it appears the EU leaders are adamantly against this. For tech companies, this means that they will need to work additionally on making sure their projects adhere to the EU regulation. Additionally, those companies which fail to do this will lose access to an incredibly important market, so everyone will have to invest money and time in making sure this does not happen.
For the current perspective, UK tech companies, especially medium or small ones, have very little to gain through Brexit, but plenty of things to lose if the divorce process ends with an isolated UK that could struggle to access the EU market in any meaningful business sense.