Scottish Enterprise Economic Trends Survey: planning for leaving the European Union – October 2018

This paper presents the findings of the Scottish Enterprise Economic Trends Survey, which examined the extent to which Scottish Enteprise (SE) Account Managed companies were preparing for the UK’s exit from the EU. SE Account Managed companies are those companies identified as possessing the greatest potential for growth. It covers the percentage of companies that had developed, were developing, or were planning to develop a plan, those that would welcome SE support with this. It also considers how this has changed over time, and across different sectors. It then outlines the opportunities and challenges presented by Brexit that have been identified by the surveyed companies. Finally, it considers those companies that were not planning to develop a plan at all, and their reasoning for this.

The research is based on survey responses from 1195 individual SE Account Managed companies, completed between 1 November 2017 and 30 September 2018.

The research found that there had been very little change in the last six months in terms of preparation among Account Managed companies, with 5% reporting having developed a plan, 28% developing, 33% planning to begin, and 12% planning to begin, but would welcome SE support. Little over a fifth (22%) had no current plans or any plans at all to prepare. There were significant variances between sectors – with Tourism and Chemical Sciences sectors having the highest levels of preparation (64% developed or developing plans). Those sectors least active in the single market tended to have the largest percentage of companies not intending to plan at all, e.g. Construction (34%), Non-Sector Companies (30%) and Financial/Business Services (27%). In terms of opportunities, 21% of companies set out at least one. The nations and regions where these opportunities were identified were: Europe (49%); Asia-Pacific (32%); The Americas (32%); the Middle East (7%); and Africa (4%). Opportunities in the UK market were also identified by 15% of respondents. The challenges identified were broader than the opportunities, and 17 themes emerged. Talent attraction and retention was the biggest issue of concern, felt greatest in Technology and Engineering companies. Other concerns included: future trade tariffs/arrangements; competitiveness/cost pressures; future regulations/regulatory frameworks; uncertainty; supply chain/imports; finding new markets/sales; finding/making investments; innovation; maintaining EU relationships; internal company management/arrangements; loss of grants/funding streams; achieving growth plans/ambitions; negative perceptions of the UK; sector specific challenges; changing role within parent company; and securing/maintaining access to non-UK/non-EU markets. The reasons companies were not intending to plan for the UK’s exit from the EU were that their main focus was on the UK market, there was a lack of information and it was not considered relevant to them.

The report did not make any recommendations.