UK SMEs are geared up to take advantage of global business opportunities following the UK’s departure from the European Union, according to research published by Key Cities ahead of a significant industry conference on Brexit
The findings of the survey, conducted with 2,025 businesses based across the UK, are to be discussed at Key Cities’ ‘Beyond Brexit’ conference on Tuesday 20th November. The conference will bring together policymakers, academics and the private sector, to highlight the challenges and opportunities for businesses post-Brexit.
Key Cities’ research demonstrated that despite concerns over the UK’s future trading relationship with the EU, many businesses are optimistic and are considering new markets to drive future growth. Rather surprisingly, a larger proportion of businesses (45%) believe growth will be attained through opportunities within international markets rather than domestic business activity (39%).
In addition, more than half of businesses believe exporting activities will be unchanged by Brexit. This is particularly pertinent, with five of the top ten goods exporting cities being members of Key Cities. The Key Cities also contain some of the fastest growing economies in the UK, and are home to around 250,000 manufacturing jobs.
The research highlights that the manufacturing sector is likely to be one of the most resilient following Brexit, with 56% of firms stating that their exporting activities will remain unchanged. Real estate (64%), IT and telecommunications (61%) and the legal sectors (60%) lead the way on this metric, whilst businesses in the East of England (62%) and East Midlands (60%) were the most supportive of this view.
Key Cities is a collaboration of 24 mid-sized cities from across the UK to ensure all members are placed on a sustainable footing to deliver continued, inclusive economic growth. The group seeks to generate awareness of the economic contributions of its member cities and to develop solutions to the constraints preventing growth and further prosperity for the UK.
The Key Cities also represent communities who largely voted in favour of Brexit. 60% of the population of Key Cities voted to leave the EU and all but one of the Key Cities overall voted in favour of leave. The ‘Beyond Brexit’ conference will also seek to address the concerns of Key Cities residents, who primarily voted for Brexit due to fears of communities being left behind and suffering from a historic lack of investment and engagement from central government.
Encouragingly, just under a third of business owners are not concerned about any business costs increasing following Brexit. This view was strongest among those in the legal (45% of respondents), education (45%) and finance and accounting (37%) sectors. Geographically, this viewpoint was strongest amongst those in the East of England (30% of respondents) and Wales (37%).
Of those who are concerned about business costs increasing, the core considerations are rising levels of bureaucracy (18%) and supply chain costs (15%). Increases to tax and interest rates were also cited as relevant factors. Perhaps unsurprisingly, concerns around rising levels of bureaucracy were particularly high amongst businesses with a £1m + turnover (22%).
Cllr Michael Mordey, Deputy Leader of Sunderland City Council and portfolio holder for Brexit within the Key Cities group, commented: “The ‘Beyond Brexit’ conference will provide a forum for a broad range of policymakers and stakeholders to discuss the challenges and opportunities that Brexit presents to both communities and businesses.
“Our research – and from the conversations that our Key Cities members have on a daily basis with SMEs right across the UK – highlights the resilience of the UK’s business community, and the willingness to explore and grasp new opportunities.
“We’re looking forward to engaging the broader Key Cities grouping on these issues, and developing a series of policy asks to take to central government, ensuring that the voice of Key Cities’ communities and businesses are heard as the UK prepares to exit the EU.”
