As much as the ‘Leave’ voters ascertain offloading EU obligations, they must also be prepared for mysterious business outcomes, after Brexit.
Britain, up until now, remains a global nerve center, but it is heading for an identity makeover after parting ways with the European Union. London remains in the hearts of global investors, entrepreneurs, and all sizes of businesses, precisely due to a strong Sterling and a powerful Euro. Britain exiting the EU is poised to deliver conditions, some of which are mysterious, and some of which may be conceivably favourable. Economic health will be connected to the country’s (May’s) ‘political will’.
Logistics of talented manpower, mostly from the EU, is under the radar, as they constitute a large chunk of the working class in the UK. Curbs on liberal immigration are certainly expected, for conservative policies tend to strip everything down, before expanding cautiously. Free movement of talent would be curbed initially, until a fresh immigration policy is formed. Such moves would without doubt hurt the immigrant population, a significant percentage of the workforce.
Start-ups and entrepreneurial ventures form a significant part of the economy. 15% of them initiated in the UK were courtesy of EU nationals compared to the 5% start-ups initiated by UK nationals. Although, immigrants form a significant part of the economy’s start-up community, the UK is still home to some large home-grown businesses.
The immigrants’ success in the UK is due, in parts, to the strengthening of a single EU culture across EU nations, and the ever-developing trustworthiness of EU nationals in the UK. Immediate restrictions on EU nationals is not on the cards, as Brexit is yet to negotiate an exit deal, which will include multilateral trade and immigration policy between UK and EU. Separating from the EU is poised only to create a hypothetical and oversensitive market only barely, but no sooner the market stabilises, normalcy would be established. The pound has dropped 14% against the US dollar since the Brexit referendum results were announced, but this will be short lived, as it strengthens again after a firm footing on its economic reforms. May’s government shall reinstate new economic policies which, notwithstanding the EU impact and obligations, will be directed to favour the UK’s businesses and the entire business ecosystem.
Immigration policy is interlinked with the extent of investments into start-ups and entrepreneurs seeking to station their base in the UK. The May government announcing new start-up policies is not surprising, as it would try and recharge home grown talents to maximise government resources and business provisions. That there shall be a decline in entrepreneurial activity post Brexit is not certain, for the government would never want to derail its economy by offloading immigrants. Speculations abound, but the May government is all set to start negotiations with the EU for striking the best multilateral trade deals covering all sectors, especially those based in the UK that seek to prosper.
Post Brexit, when UK is free to call the shots, it is most certain that the government shall expedite domestic growth with financial stimulus, and strengthening its economy by partnering US, China, India, Japan, and other Asian countries on new terms. These terms could even be better than what it currently secures while with the EU.
On the government reserves front, UK shall lose some subsidies it enjoys currently being with the EU, and it may even raise its sovereign debt from EU and other nations. To adjust these impacts on the treasury is tricky; the government’s expertise, policy creativity, and enforcement quality will be tested. Overall, UK shall not see a drastic reduction in start-ups and entrepreneurial activity, as it shall, within the two years of Brexit negotiations, secure lucrative immigration and multilateral trade policies with the EU.