Investment in the development of innovative and value-added products, improved services and processes can help companies capitalise on opportunities provided by Brexit. To access and compete in international markets and with larger players benefitting from greater resources, businesses will need to invest in research and development to remain competitive and find more efficient ways of working, such as lean practices. Equally, investing in research and development will give companies a competitive edge in the EU when cost pressures may impact pricing. Developing new innovative products will help businesses to secure premium prices, helping to offset any profit margin squeezes that may be felt from currency fluctuations and additional international trading costs. Protecting and growing your collaborative relationships will help to adapt to any possible restrictions arising related to collaboration and data sharing in the EU. Proactively identifying risks to R&D funding during the transition to the new system is important too. In Wales, funding for R&D may be available from the Welsh Government; contact Business Wales on 03000 6 03000 for further information.
Possible Opportunities and Challenges
New products and services
Competing in the post-Brexit era may mean investment in existing products and services to provide a competitive edge. Alternatively, or additionally, the development of new, value added products could give business offerings wider appeal. Create a product and service development strategy by examining your current portfolio and consider investment in producing new, value added offerings. As well as more significant changes, don’t rule out smaller enhancements to existing products or new iterations to help you stand out from the crowd.
The Bank of England expects the level of business investment to be around 25% lower by 2019 relative to its pre-referendum forecasts, potentially affecting resources invested in innovation. Furthermore, key innovation funds such as EU Horizon 2020 funding to drive innovation and research may very well be unavailable after Brexit, with uncertainty over alternative funding arrangements. Companies will need to consider alternative funding options, such as leasing, factoring and crowd funding, and be open to sharing equity with the right external investor prepared to provide venture capital. Review the pros and cons of each to establish the right financial base and resilience for your business.
Collaboration and data sharing
Collaboration is essential for innovation and companies require access to a range of resources, facilities, expertise and finance for successful innovation and development. Cross border working has helped bring together capabilities and assist with data and information sharing. After Brexit, opportunities to take part in collaborative research programmes or share expertise will change which may affect a company’s abilities to access facilities and specialist knowledge. Consider the agreements and processes required to bring together capabilities with suitable partners post Brexit to ensure collaboration and data sharing can continue.
The effect of Brexit on Intellectual Property (IP) will be determined by whether there is a negotiated agreement, or whether there is a “no-deal” Brexit. Patents should not be unduly affected, and the UK is seeking to take part in the forthcoming European Patent system even after leaving the EU. The tax treatment of IP may well be more flexible after Brexit – businesses need to keep this under review. The UK Government has recently announced that all existing EU trade marks and designs belonging to UK proprietors will retain protection post-Brexit, although the status of applications pending at the date of Brexit is still unclear. As regards Geographic Indications (such as those applying to Welsh Beef and Lamb), the UK intends to establish its own scheme post-Brexit. Businesses should identify and review all licences and agreements related to IP rights now to understand what the implications of different scenarios could be. Businesses may need to seek advice from trademark bodies and IP advisors in order to protect their IP and/or apply for new rights to cover the appropriate geographical areas after Brexit.
TO DO LIST: Preparing for a possible No Deal
- Sign up to the Business Wales Newsletter
- Visit Welsh Government’s Preparing Wales website
- Register to get EU Exit updates from HMRC
- Stay up to date with Health and Safety Executive information
- Search for new contracts and advertise your services on the Sell2Wales website
If you import or export
- Watch HMRC’s hour long webinar about 5 key areas UK businesses must be aware of to keep trading goods when the UK leaves the EU
- Review UK Government’s publications on Trading with the EU
- If you are an importer or exporter you must have an Economic Registration and Identification (EORI) number to continue to trade with the EU. If you don’t already have yours, you can get an EORI number on GOV.UK. Having an EORI number is just the first step to continue to import or export. Follow these import and export processes to trade with EU and non-EU countries
If you transfer personal data
- Follow the Information Commissioner’s Office’s ‘6 steps to take’
- Visit using personal data after Brexit
If you provide services or operate in the EU
If you employ EU citizens
- Support your EU staff to access the required documentation
- Consider up skilling your workforce – see the Skills Gateway support
If you sell manufactured goods
If you are involved with intellectual property or copyrights
- Comply with changes to intellectual property
UK Government’s full list of EU exit information for businesses can be accessed here.