Unless you’ve spent the past few weeks living under a rock, then chances are you know that something major has happened – on the 23rd of June, the UK voted to leave the European Union. This decision to leave is already poised to have a massive impact on our lives, but how will it affect the digital marketing industry?
As with anything, there are lots of positives and negatives. While the EU certainly isn’t perfect, economically, there were lots of good reasons for us to vote to stay in.
A lot of very important people have spoken about how dangerous the repercussions of a leave vote truly are is, and no, I am not talking about Bob Geldof careering down the Thames on a boat. Mark Carney, the Governor of the Bank of England said that leaving the EU was “the biggest domestic threat to business financial stability” in the country’s history. That’s a huge red flag, coming from a man whose job demands a nuanced understanding of the economy. Indeed, prior to the referendum itself, the Leave campaign struggled to find a single economist who did not predict financial instability in the instance of a Leave victory. It even led Brexiteer Michael Gove to adopt the strange tactic of insisting that the British people have “had enough of experts”.
But the British people have spoken. As much as we may disagree with the result, people who voted on both sides of the divide must work together to shape the best future we can for our country outside of the EU. And for remain voters like myself, that means looking at the positives. So what positives could there be for the digital marketing industry?
A key positive, promoted heavily by the Leave campaign, is that Britain could now be able to trade more easily with countries that weren’t part of the EU. Trading with these countries is more difficult and costly than it is with EU member states as the Union imposes sanctions against those who aren’t in the Union. Brexit will theoretically encourage companies to have more trading partners across different parts of Europe, and the wider world. However, while this scenario may eventually come good, the period of transition away from EU trade – towards trade with other nations around the world – is unlikely to be a smooth one, and the economy will likely bear the brunt of this.
What does it mean for London?
One thing that we can’t overlook is how leaving the EU will change the way that the UK’s largest city does business. Brexit is something that could seriously impact London’s status as a major digital hub. The UK’s capital city is currently a key European centre for tech and digital innovation, with companies primarily clustered around the ‘Silicon Roundabout’ on Old Street. London dwarfs other tech hubs in Berlin, Amsterdam and Stockholm both in terms of investment and talent pool. Some of the industry’s rising stars have their headquarters here – companies such as TransferWise, Funding Circle and CrowdCube. But now that we’re leaving the EU, is London truly such a nurturing zone for startups? As with everything regarding Brexit, this is unclear, but the outlook is not good. The German liberal party – the Free Democratic Party – even commissioned adverts across London cheekily urging startups to relocate to Berlin.
Taavet Hinrikus, a co-founder at TransferWise, recently said that “it would be crazy to leave the European Union. Like many businesses in London we chose to headquarter here because of the access to global talent and global markets. If the UK leaves the EU, we’ll have to consider whether it makes business sense to stay headquartered here. It’s a decision we don’t want to make but one that we’re having to consider”.
Quotes like this hint at the fact that London could lose its status as the continent’s tech capital. Of course, it wouldn’t be the first time that someone made an empty threat to leave the country because a public vote didn’t go their way. However, the fact is that there are numerous tech cities across Europe that still benefit from EU membership, and there’s no reason why these countries couldn’t entice key players such as TransferWise to up sticks.
Draining the talent pool?
Another potential consequence is that tech companies will find it harder and harder to recruit foreign employees. Many companies recruit talent from the EU because a lot of people don’t have the skillset that modern, tech-focused enterprises require. Losing out on this talent is bad news, as there’s a serious dearth of tech minded people in the UK. Look at most companies – especially in London – and you will see a massive cosmopolitan mix of people from all over Europe. Making it more difficult for European nationals to make a home here could threaten the inclusive, global atmosphere that makes London so special.
However, something that has become fairly apparent over the past few weeks, is that leaving the union is unbelievably complex. From trade rules, to employment law, to funding for small businesses, European Union membership affects almost any aspect of life you can think of. Disentangling the UK’s domestic law from that of the EU is insanely difficult, and could take years. This itself is one reason why there has been such a slump since we exited. The market hates uncertainty, and this situation is about as uncertain as you can get. Don’t forget, no country has ever left the EU before. We are in uncharted waters.
We don’t know what’s going to exactly happen during the next few years. What we do know is that it is going to have an impact on how all businesses operate. Indeed, the digital marketing and tech worlds might be among those that suffer the most.