Why US firms are more relaxed about Brexit - KPMG Global
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Why US firms are more relaxed about Brexit

Why US firms are more relaxed about Brexit

Why US firms are more relaxed about Brexit

Paul Harnick | Leadership,

As a Brit living in the US for the past 18 months, it’s been fascinating to follow the maelstrom of Brexit from afar. While it dominates the front pages back home, over here in New York it seems the glorious performance of Liverpool FC – my lifelong ‘soccer’ obsession – gets more coverage than arguably the largest peacetime change to the UK in a century.

I’d go so far as to say only a handful of company boards outside the financial services and life sciences sectors even have Brexit on their risk registers. Perhaps the most common response I get when asking clients for their view of the UK’s departure from the EU is, “we’ll figure out a way to fix whatever problems it throws up, when you Brits figure out what the issue is.”

To an extent I can understand this more relaxed approach. Access to the European Union is far less of a strategic priority among most US businesses located in the UK than it is for investors in, say, Japan.

So yes, while I completely agree that Brexit has created extreme uncertainty for much of the UK business community – especially those reliant on highly-integrated supply chains, EU-born workers or a zero-tariff regime with the rest of the EU – I also think it’s time we stopped using Brexit to define the UK or its future potential.

Sitting at a distance allows me to see the bigger picture: the UK has trading is in its blood and innovation in its DNA. I can think of a number of ways in which the UK as a favourable place to do business:

  1. It has  four of the world’s top 10 universities[1]
  2. A first-class R&D ecosystem – ranked 4th on the 2018 Global Innovation Index, the highest of all major economies[2]
  3. A business-friendly environment  - ranked the easiest place to do business in Europe by the World Bank[3]
  4. Global market-leading products and services in a number of industries and sectors
  5. A proven track record for digital innovation and nationwide hubs – with a robust intellectual property system providing a natural home for global innovators (international organizations own 41.5% of UK patents)[4] and one of the world’s highest concentrations of R&D expertise in the Oxford-London-Cambridge ‘Golden Triangle’
  6. A market of 66 million consumers
  7. Government commitment to growth and regeneration through the Industrial Strategy, created to boost investment in innovation and industries

(RC) The recent UK CEO Outlook found that 76% of CEOs in the US are more likely to invest in the UK after Brexit (that’s an even higher rate than among CEOs in the UK!).

I believe this is recognition that there are many things which still make the UK a great place to do business. Combining a heritage of excellence, with a determination to be part of the industries that will power growth in future decades, the UK continues to provide growth opportunities for ambitious investors.

KPMG’s UK member firm (RC) works with a range of US organisations with a presence in the UK, or those who are looking to establish operations there through our US-UK corridor team.

Read more of my and my colleagues’ reflections about investment opportunities in the UK, spanning everything from life sciences to consumer markets, in our new Bridging the Atlantic series. And feel free to drop me a line at any point.

[1] DIT 2018
[2] www.globalinnovationindex.org
[3] World Bank 2015
[4] UKTI