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Malta Business Review
POLITICO GLOBAL POLICY LAB
Brexit & the future
of Britain’s economy
By Mark Scott and Charlie Cooper
During this five-week project into how the
U.K. can retool its economy after Brexit,
one message reemerged again and again.
Many Britons who voted to leave the EU
feel disconnected from the country’s recent
economic growth — a phenomenon that
has led to some of the highest rates of social
inequality anywhere in the Western world.
With feedback from the panelists of our
“brainstorming” workshop, as well as from
readers like yourselves, we delved into this
topic in our final article for this Global Policy
Chapter. In particular, we assessed whether
Brexit can be used as a vehicle to improve
social equality across the U.K.
We also put together a graphic on how many
parts of the country — in fact, some of the
most disadvantaged regions — voted most
avidly for Brexit even though they may have
the most to lose from leaving the EU. See
the maps that show how Brexit and social
inequality, at least for the moment, go hand
in hand.
As we finish the third chapter of POLITICO’s
Global Policy Lab, these are three paths,
based on feedback from this collaborative
project, for revamping Britain’s economy (and
some of the trade-offs that will go along with
them):
Singapore-on-the-Thames
Britain’s has one of the most advanced
financial services industries anywhere. It
generates billions of pounds of tax revenue
each year and connects the U.K. to all four
corners of the world. The country could
double down on those advantages, paring
back regulation in some areas and promoting
itself as the go-to place for international
financial services for growing global powers
like China.
The downside? Without so-called passporting
rights to the EU, some in the City may find
it hard to offer their services to the rest of
Europe, still one of the largest buyers of
Britain’s financial expertise.
Return to manufacturing
The U.K. may not be the manufacturing
powerhouse it once was, but when it comes
to specialized areas like the aerospace and
automotive sectors, Britain still punches
significantly above its weight. Combine that
with a pound falling against other currencies,
and you have a golden opportunity for exports
— with the added benefit of rebalancing a
domestic economy that has become overly
dependent on services.
One significant challenge, though, is access
to talent, particularly from the EU if the U.K.
continues down the path toward a so-called
hard Brexit. For local manufacturing to keep
pace globally, a steady stream of highly
qualified talent will be required, either trained
locally or imported from elsewhere.
Digital Britain
The U.K. government is already promoting
its Europe-leading tech sector, with
investments announced to boost digital
training and expand research into artificial
intelligence and robotics. These sectors will
only grow in prominence as all industries
embrace digital advances demanded by 21st
century consumers. And since much of this
technological race is global (the United States
and China are arguably larger markets than
Europe), Britain’s departure from the EU will
pose few obstacles to this digital push.
Again, much will depend on keeping the local
workforce trained in the latest skills if the U.K.
is to take advantage of its current status as
first among equals in Europe’s tech industry.
That will take money. Lots and lots of money
to educate the next generation of British
workers that will come of age after Brexit.
Underlying this discussion is one clear fact.
Brexit — no matter if you voted Leave or
Remain — will fundamentally alter the
U.K.’s economy. And that offers a once-in-ageneration
chance to reframe Britain’s future
after arguably the most important political
decision for Britain in the last 70 years. MBR
Credit: The Politico Global Policy Lab
Digital skills,
skills, skills
The digital sector is one in which Britain
undoubtedly leads the way in Europe.
Whether in terms of venture capital
invested or startups valued at more than a
billion pounds, rivals like France, Germany
and Sweden are green with envy.
As Britain looks to a future beyond Brexit, it’s
clear the country’s digital sector can’t stand
still. That means both attracting foreign talent
(both from the EU and farther afield), as well
as training up locals in the technical skills
required for a 21st-century economy.
The situation in the U.K. is a mixed bag. The
country has almost 1 million developers
working across both tech and non-tech
sectors, according to data compiled by Stack
Overflow, an industry career website. That
gives Britain one of the deepest benches of
tech talent anywhere in the world and makes
France and its 460,000 developers look paltry
in comparison.
But its position as a tech leader is by no
means secure.
More than 40 percent of job vacancies linked
to so-called STEM (science, technology,
engineering and mathematics) professions
remain hard to fill, according to research by
the U.K. government. And in London — by a
long measure, the country’s tech capital —
80 percent of local tech companies say skill
shortages are their biggest barrier to growth,
according to a survey by London First, a trade
body.
To ensure the success of the next generation
of local digital companies in the wake of Brexit,
it’s crucial that policymakers invest more in
digital training and push forward with a visa
program for highly-trained migrants (one
already exists for non-EU workers) to ensure
the steady flow of tech workers doesn’t dry
up overnight. MBR
Credit The Politico Global Policy Lab
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