It was Socrates, the philosopher not the Brazilian footballer, who said that “all that I know is that I know nothing”. For Socrates, such humility was required in order to facilitate effective learning but, all these many centuries later, the sentiment stands as an accurate summation of most people’s thoughts on what a post-Brexit world will look like.
The UK’s new Prime Minster, Theresa May, did everyone a favour by stating categorically that the decision to leave the EU is binding and there will be no change of mind or a second referendum. However, as the weeks tick by and the enormity of the task of unravelling the UK from its myriad ties with the EU becomes apparent, no one is any clearer on what the political and economic future is going to be. The Guardian reported recently that the newly-formed Department for Exiting the EU (or, predictably, DExEU) doesn’t yet have an office and is holding meetings in Starbucks; this is hardly reassuring.
From a business point of view, I’m determined that uncertainty should not have an adverse effect on my staff or our customers and I’ve been quick to reassure both of these groups that whatever the precise consequences of Brexit, our company’s commitment to the UK is both permanent and unambiguous.
I think the most important thing we can do in our industry is not to panic. Things are uncertain and will remain so for many months, even years, to come but once we accept this we can begin to employ strategies to manage this uncertainty and find new ways for our businesses to thrive.
It’s true that the EU has a significant impact on the IT industry. Freedom of movement within the EU, for example, means that we can attract the smartest people from across the continent and have them join our teams the very next day. It seems certain that this is going to change post-Brexit and likely we will find it harder, in the short term, to recruit top-drawer IT brains. That said, this is an opportunity for companies to invest in, and nurture, the huge potential that I know exists within universities in the UK.
On a separate topic, data flow and security remain thorny issues and the on-going debate between the EU and US on “safe harbour” legislation has become a lot trickier post-Brexit. The inherent contradiction between national borders and data held on servers internationally means that negotiations to find a solution will continue to be slow and complex. I believe that it’s crucial for businesses to have flexibility in cloud options and the ability to adapt solutions to comply with local laws. It’s important to use modern SaaS companies that are able to employ different service providers in different countries to ensure that customer data resides where, and how, legislation allows. These companies are finding great success in operating their own clouds, both private and public, which enable services to be delivered securely and free of restriction.
The more legislation that occurs, and I think that this is inevitable post-Brexit, the bigger the challenge for companies employing older SaaS models as they are forced to navigate different legalities in different markets. The cloud functions more efficiently when data loads can be shifted from one data center to another. Without the free flow of data, response times go down and costs go up.
Cool heads and a prudent attitude are required all round. Employers should look to reassure their employees, as well as their customers, and I’m certain that the vast majority of CEOs are already several weeks into a process of evaluation and planning for the post-Brexit world. Finally, let’s not forget that uncertainty is not necessarily a cue for panic or pessimism; I think that the opposite can also be the case.
Doing business in the UK and Europe will irreversibly change, but where there is uncertainty there are also exciting possibilities. On this note, all of us can welcome the recent report from London & Partners that shows British firms have attracted $200m of venture capital funding across 42 deals since Brexit.
Although it’s not going to be easy, I am confident that whatever the future, the tech industry is well-placed to emerge from this period of uncertainly stronger than ever.
By Larry Augustin, Chief Executive Officer, SugarCRM.