Where the Brexit vote differs from other political shocks is that three years on, the uncertainty has yet to subside. We’ve learnt little since 2016 about what our long-term relationship with the EU will look like.
The Prime Minister now has a deal, but that’s only the start. Unlike the focus group stunned into silence at the news that the Withdrawal Agreement marks just the end of the beginning, entrepreneurs know all too well that we are staring down the barrel of long-term uncertainty.
Though Brexit impacts us all, businesses will face an immediate requirement to adapt as the rules of free trade in goods and services across the EU, as well as the free movement of workers, change. Their outlook is gloomy. Harvard research suggests that businesses expect Brexit to lower sales over the longer term, which is likely to carry huge implications for investment, employment, and productivity.
However, history suggests that periods of uncertainty also offer opportunity – Microsoft, GE, Apple, and other titans were created during recessions at a time when larger corporations were decreasing investment. A 2009 Kauffman Foundation study found that more than half of the Fortune 500 list were launched during a recession or bear market.
In a similar vein, while Brexit may have a net-negative impact on business – at least in the immediate term – entrepreneurs should not be deterred from starting up. Business ownership is an inherently risky endeavour: for many startups it is unlikely that our departure from the EU will mark the difference between success and failure.
That is not to say that government can be complacent. Prolonged uncertainty has seen foreign investment into UK firms drop to its lowest level in six years. Companies have deferred hires three times as deadlines passed with no departure. Anti-immigration rhetoric perplexes businesses whose survival depends on access to foreign talent.
Our Job Creators study revealed that half of the UK’s fastest-growing businesses have at least one foreign-born co-founder. In our knowledge economy, prosperity is closely linked to our ability to produce and attract highly-skilled talent.
For this reason, we should welcome the government’s shift away from Theresa May’s self-destructive policies and obsession with the net migration target, for instance with Boris Johnson’s promise to bring back the post-study work visa route, which lets foreign students stay for two years after graduating.
Companies large and small need a government that recognises the need to attract the best people. Brexit may not make or break a business, but access to talent can.
There is a more chilling threat looming, however. Labour MP Lloyd Russell-Moyle has claimed billionaires should not exist. Jeremy Corbyn – likened this week to Stalin by Johnson – has repeatedly and misguidedly attacked business leaders.
Labour’s more extreme plans – confiscation of shares in large firms, widespread state intervention in the setting of wages and rents, attacks on property rights, stealth taxes – expose a wilful ignorance of the impact such policies would have on our economy and the people that the party claims to want to help.
Brexit may be a storm that business owners can weather. The impact of a Corbyn government is harder to predict.
Main image credit: Getty