By Nate Vickery
Results of the United Kingdom’s most controversial referendum has shaken the EU, as well as many other countries from around the world that have close relations with Land of the Hope and Glory. While Nigel Farage and Boris Johnson are still celebrating their victory, many entrepreneurs from both Europe and the United States are asking whether this historical referendum will have any implications on their business. As many other events in the global political arena, Brexit will have drastic implications on businesses in both Europe and America. In this article, we will focus on major consequences of Brexit referendum for American small businesses.
Larger talent pool
Results of Brexit referendum will probably cause a large brain drain from the United Kingdom, into other EU countries and in United States. Many young and educated members of British society who voted for their country to stay in the EU, will probably search for a new home, in an environment where they can pursue their career dreams and live more freely.
Since educated talent from the United Kingdom won’t face a language barrier in the United States, this country can become the most popular destination for British expats. This will increase the competitiveness of labor market in the most popular states and enable small businesses to hire top talent that will speed up their development.
More relaxed regulations in EU
One of the main reasons for this referendum, were strong regulations that are imposed to all EU member states. Since several prominent politicians from European mainland started campaigning for similar referendums in their own countries, the EU will probably need to loosen up its current regulations and allow both domestic and foreign businesses to work more freely inside its borders. This will enable more American (both big and small) businesses to enter the EU market and offer competitive products to EU consumers.
Better trade relations with UK and EU?
Although Obama administration supported the UK Prime Minister David Cameroon during the referendum campaign, right after the referendum results have been declared, White House released a statement, which says that the United Kingdom and the United States will remain indispensable security and trade partners. Same rules apply for other EU countries. This means that the friction between the United Kingdom and the European Union can drastically increase the influence of American business on both sides of this conflict.
The United States is a great place for company incorporation. Due to its large consumer base and highly developed corporate culture, US will probably become a dream destination for British business owners. This will drastically increase competition in many different niches and small businesses will suffer the consequences of post-Brexit ‘refugee entrepreneur’ influx.
Difficult regulations concerning British and EU employees
Britain will definitely change many regulations that deal with EU employees’ status. The EU countries might apply some countermeasures and we can also expect from United States to change their regulations in order to control mass immigration from both the UK and the EU. This also means that entrepreneurs will need to strictly follow immigration regulations, in the next few years, if they want to keep their overseas employees. Hopefully, software developers will manage to add immigration rules check to their HR software solutions, so entrepreneurs won’t need to browse legal and immigration websites for every foreign employee.
Just one day after the referendum, both British pound and euro started plummeting. American market is not tightly integrated with the EU one, but this trend can easily cause recession in the United States as well. Although dollar skyrocketed (against the euro and the pound) on Friday, the US bond yields fell to the record low, since 2012. This trend can take United States’ stocks on a very tough ride, which will be the first market hit caused by Brexit that will drastically decrease the value of US small businesses.
Although Brexit caused several major economic changes just one day after the referendum results were declared, we should expect for the above-mentioned consequences to occur during the next several years. The United Kingdom will need at least two years to become fully independent from the EU system. Who knows what can happen during this time?! Economic relations between the United States, the UK and the EU will also depend on the new Prime Minister of the United Kingdom, as well as on 2016 US Presidential Elections that will take place in November.
Nate M. Vickery is a business consultant from Sydney, Australia. He has a degree in marketing and almost a decade of experience in company management through latest technology trends. Nate is Editor-in-Chief at Bizzmarkblog.com. You can reach him on Twitter at @NateMVickery.