Tech sector ‘most positive’ about Brexit
With less than a year to go until the UK splits from the EU, it seems the tide may be turning on how the tech sector views the upcoming changes.
In line with the EU Council meetings taking place over the next couple of days, PwC has released a new study on Brexit readiness.
56 of the 351 respondents hail from the tech sector. The study found that these companies are more likely to be positive about the impact Brexit will have on their business than the average, with 57 per cent believing it will have either a very positive or quite positive impact compared to 41 per cent on average.
The sector’s biggest concern is that imports & exports have the potential to be subject to high tariff rates.
Second is fears about time-dependent cross-border logistics, with highly integrated UK-EU supply chains & distribution models the third biggest worry for tech companies.
Nearly half of tech companies are preparing for a ‘withdrawal-only’ deal, resulting in an orderly exit from EU with agreed exit transition, followed by ‘no deal’ (32 per cent) and ‘limited future deal’ (30 per cent). Only seven per cent aren’t planning for Brexit.
The majority of tech sector respondents are still in the planning or ‘have started’ phase of preparations.
However more than a quarter (27 per cent) have completed steps like changing warehousing arrangements, exploring alternative operating models and applying for authorised economic operator status or other customs facilitation/VAT relief schemes.
“Technology companies are used to facing disruption and are arguably more agile than most and less affected by new barriers to physical trade, so it may come as no surprise that they feel more positive than other industries about their Brexit preparedness,” said Jass Sarai, UK technology industry leader, PwC.
“As most industries continue their journey to become tech enabled, demand remains high for core technology products and services. Companies in the sector also tend to have more of a global view as they strive for rapid growth.”
Sarai believes it’s positive to see that some tech companies have begun proactively scenario planning for potential Brexit outcomes.
“While we believe a deal is more likely than a ‘no deal’ scenario, it’s important for businesses of all sizes to consider how different outcomes could impact them,” he said.
“Some of the ‘no regrets’ areas that will be useful to look at no matter the outcome include understanding your supply chain, planning to be agile and supporting your people.
“In conversations with our tech clients now we often hear concerns around talent shortage. This may be addressed partly by the increased number of visas recently announced by the government, but we need to ensure the UK remains an attractive place for tech talent to work and companies to reside with as few barriers as possible.”
Ultimately, tech companies are looking for more support from industry forums and peer networks, as well as industry specific communications from government.
They’re also more likely to have engaged with the government or an industry body on Brexit impacts and preparations than the average.