The FT & KPMG Brexit Regional Roundtable series brings together the views of senior leaders from the worlds of business, politics and academia to discuss how they can practically respond to the challenges and opportunities of Brexit.
KPMG has been meeting with organisations around the UK to assess how they are responding to Brexit in a series of dinners, hosted jointly with the Financial Times. Here are a few of the interesting things we heard in Birmingham:
1. Businesses are now getting the message
While FTSE 100 and multinational companies are advanced in their thinking around Brexit, many other firms only started considering its impact after Article 50 was triggered and are playing catch-up. “We’ll stay adaptable and find a way around it,” said one leader at the event.
2. The pound continues to create winners and losers
A net exporter from the automotive sector has benefited from the exchange rates over the past 12 months, but foresees future challenges around borders and tariffs. One attendee who works in finance said the pound would fall to parity with the euro by early 2018, so was happy to hold stocks in the FTSE 100, which tends to rise as the currency weakens.
On the flip side, the head of one Midlands firm buys a lot from Europe and said their company had been squeezed by the sterling’s fall. Doubtful of an upswing in the exchange rate, the firm is now trying to expand its dealer network and sell into Europe.
3. Universities need the UK to stay global
Universities bring global talent, investment and business into areas like the Midlands. One university leader said on average £1 million was generated for the economy for every eight international students coming here. These institutions therefore need to demonstrate the importance of an open economy.
Academic institutions across the region are already adopting another tactic that may help in the post-Brexit environment: establishing mini campuses in other parts of the world.
4. Skills are a worry
Attracting the right talent is a challenge for leaders throughout the region in an economy with near-full employment. In logistics and distribution, leaders report a particular shortage of drivers; a gap they have filled by employing EU nationals up to now. However, as the pound has fallen some have started to leave. Leaders are also asking: even if EU-born drivers do stay, will their foreign licences still be valid?
5. Regulatory upside?
One business head said their company had long been burdened by EU rules and regulations which have changed constantly. They therefore see some positives and opportunities in what lies ahead for the UK. A February survey of local businesses revealed that they now feel more confident than before the EU Referendum.
6. All businesses need to innovate and add value
Some of the region’s biggest names in the automotive industry pour billions into R&D every year, but smaller businesses need to follow suit. Regional leaders said they were committed to supporting firms of all sizes to pursue innovation as a key to growth, not just survival.