The National Outsourcing Association (NOA) released a statement that presented their opinion poll findings. The NOA asked various British outsourcing industry members to express their opinion on Brexit, especially since the UK is currently the second-largest outsourcer (and outsourcing greatly supports its economy). The NOA’s results showed that 73% of the UK outsourcing industry didn’t want Britain to leave the EU, with the top priority being to ‘preserve valuable outsourcing and trade relationship’ (35%) and ‘keep UK exports strong’ (15%). 34% stated the EU opened far more doors for the UK and that leaving would be reckless.
When it comes to Brexit, most of the IT outsourcing news you hear is doom and gloom in that Brexit will hit IT outsourcing hard. However, the latest IT Outsourcing News suggests that Brexit might bring about a new beginning.
So, what happens next?
What will happen to IT outsourcing in the UK after Brexit?
Diminishing of the talent pool
One of the benefits of being an EU member is having the benefit of free movement. As this privilege gets taken away, so will the EU IT professionals. As a result, this will drive up the price of skilled IT experts, which will affect UK businesses and their decision to outsource. They might focus more on AI, cloud-based technology and automation. As a result, this will in itself increase the skill gap. Or they might outsource offshore or nearshore for a cheaper alternative.
However, IT providers can stay competitive if they keep up with changing demand in technologies.
Increased interest in data security
Another thing that will go away with Brexit is the EU Legislation on Data Protection. Either the government will come up with their regulations. Or the lack of requirement will lead to increased security risks. For UK IT providers to stay competitive, they must keep up-to-date with implementing data security to compete with Europe. UK businesses will likely need help with maintaining or changing their cybersecurity and data protection procedures. So, if IT support companies in the UK can provide this, the industry will thrive.
Devolution of the pound and decreased trade
The UK Treasury estimated that leaving the EU will drop Britain’s trade in goods and services to 9-24%, a significant decrease. While the UK was a member of the EU, its trade increased by 76%, making its market much more competitive. Market isolation will surely follow, and the weaker British currency will create fewer cost-related benefits from outsourcing. As a result of a weaker pound, your IT contract will devalue.
However, a weak domestic currency makes national exports more competitive in global markets. As a result, there could be an opportunity to sell to untapped markets in Eastern Europe or beyond.
Effects on startups
London has been labelled the gateway to Europe, especially for fintech startups. As a result, this was the perfect place for IT support companies. However, as EU funding for startups is taken away, these startups companies may move to Europe back into the single market. And with them, the prospect of new customers for the IT support companies.
To keep your business moving forward in these uncertain times, contact us today, and we can help your business navigate through Brexit with the power of IT.
