Brexit rulebook rewritten
Brexit means lower levels of capital investment in the UK, reduced access to external finance, lower growth, less product development and lower levels of business internationalisation, with SMEs more likely to be negatively impacted.
“The results of our analysis suggest that Brexit-related concerns could result in a range of negative consequences for UK SMEs, especially the impact on reduced capital investment,” says Dr Ross Brown, reader in entrepreneurship and small business finance at the University of St Andrews.
The findings are from a study conducted by St Andrews together with the University of Essex, which leans on an econometric analysis of the UK government’s Longitudinal Small Business Survey, which encompasses around 10,000 firms.
Crucially, the study finds that those SMEs believed to be the most significant for boosting productivity and economic growth may well be the most negatively affected by Brexit. In fact, the larger, more innovative, more export-oriented and hi-tech you are, the more likely you are to have concerns regarding Brexit for your business.
“Owing to its highly complex, contested and indeterminate nature, Brexit is unlike most other types of institutional instability because it has the potential to fundamentally re-write the rulebook for how firms do business in the UK," says Dr Brown.
The UK has 5.5 million SMEs which account for more than 99% of firms, and 60% of total UK private sector employment.
Image: Steve Mullins