SMEs most likely to be affected by Brexit
29th Jan 2018
New research by academics at the University of St Andrews has suggested that it will be small and medium sized businesses who will be worst affected after Britain leaves the EU. The study draws upon information gathered from a UK government attitude survey about 10,000 firms. The study highlights the potential impacts of Brexit uncertainty on SMEs.
Conclusions were that Brexit is likely to result in reduced levels of capital investment, lower access to external finance, slower growth, reduced product development and lower levels of businesses expanding their operations into overseas territories.
Leader of the study, Dr Ross Brown: "The results of our analysis suggest that Brexit-related concerns could result in a range of negative consequences for UK SMEs [small and medium-sized enterprises], especially the impact on reduced capital investment, which critically weakens and undermines their ability to grow and prosper.
"Most worryingly, these perceived negative impacts appear to be foremost in the minds of entrepreneurs and managers located in the types of innovative and export-oriented companies, which are often viewed as the high growth 'superstars' of tomorrow.
"In other words, SMEs thought to be the most significant for boosting productivity and economic growth may be the most negatively affected by Brexit."
Although, it is not only SMEs that Brexit is likely to affect. The research found that Brexit-related uncertainty was more likely to affect larger, export-oriented firms and those operating in hi-tech and service-related industries.
Innovative SMEs in particular seemed particularly concerned about the UK's divorce from the EU.
Interestingly, the study also found that enterprises based in Scotland and Northern Ireland shared more concerns over Brexit than others based in England and Wales.
A UK Government Department for Exiting the EU spokesperson said: "We are engaging extensively with businesses and organisations across the country - including our important SME sector - as we seek to secure a good deal with the EU that works for the whole of the UK.
"We recognise the importance of providing certainty for businesses, which is why we want to reach agreement with the EU on an implementation period as soon as possible.
"We have already made good progress, agreeing in December to move talks onto our future relationship. The EU has said they will offer their most ambitious free trade approach and we are confident of negotiating a deep and special economic partnership."
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