A performance PR agency with clients in the United Kingdom and a focus on the European market has, in the wake of the UK’s EU referendum result, set out to better understand the impact of Brexit on their business and numerous sectors of the European economy.
Amid turmoil in the financial and housing markets, harshness from Brussels to London and the threat of a divided United Kingdom, the research team uncovered some interesting potential winners from the outcome of the vote. Below are the seven sectors which could benefit the most from the British public’s decision to break ties with the European Union. Those who position themselves wisely in any of these sectors could emerge as winners.
1. European Financial Hubs
The UK leaving the single market will have numerous financial, legal and bureaucratic ramifications for the financial sector of London. Many banks have already began preparing to relocate to other cities on the continent, with experts speculating that cities such as Frankfurt, Paris and Dublin will benefit the most from London’s exit from the EU.
Frankfurt Main Finance expects their home city to win big out of Brexit. The central German city, which is home to the headquarters of the European Central Bank, could become a magnet for companies in the financial service industry. Experts anticipate that within the next 5 years there may be over 10,000 finance employees migrating from London to Frankfurt.
“The economic and political stability in Germany, combined with access to a highly qualified talent pool make Frankfurt am Main a leading choice in location,” commented Dr. Wolfgang Dörner, Senior Partner and Director of Boston Consulting Group’s Frankfurt office. BCG’s survey taken in June 2016 prior to the results of the referendum, showed the Financial Centre to be leading the race to be the next home for the European Banking Authority.
HSBC has claimed that it would like to start moving 1,000 traders from London to Paris, however they have said they will wait until the final moment to implement such changes. Other reports are emerging suggesting Dublin as the European city of choice for the finance sector, particularly as it will become the only remaining English speaking capital city within the EU.
2. English Speaking Tech Hub, Dublin
Ireland is about to become a unique destination within the European Union. With a population of over 4.5 million, the country will become largest English speaking region in the EU after Britain exits. This makes it a top choice for companies who would like access to both the European market and a wide pool of tech savvy, English speaking employees.
The Irish capital already has in place some of the best regulations for corporations within the EU, with corporate tax laws capped at 12.5%. Well established companies such as Twitter, Airbnb, Slack, Facebook, and Google have already chosen Dublin as their base, thanks in a large part to this.
The commissioner for startups in Dublin, Niamh Bushnell already counts herself and her city as one of the biggest potential winners of Brexit, as seen in her press release, Thanks to Brexit. Bushnell invites global companies to invest in her city that is already home to a startup density of 1,200, “among them world leaders in travel tech, fintech, and SaaS.
“With Brexit comes opportunity.” Bushnell concludes, “Let’s not waste it.”
3. Startup Hub, Berlin
With 2015 stats showing that the number of new companies joining London’s Silicon Roundabout has fallen by a third in one year, from 15,620 to 10,280, the additional pressure of Brexit could mean that London’s deflating startup bubble is set to burst.
Now, since many financial businesses are moving out of the capital and the laws for free labour within EU will need to be renegotiated, the city will lose a lot of its appeal.
Mayor of Berlin, Michael Müller has optimistically speculated, “It is possible that Berlin becomes the winner of Brexit.” The German capital fosters an international vibe, is home to a thriving startup scene, and still has an affordable cost of living. Berlin based companies such as Rocket Internet and Venture Capitalists Earlybird have transformed the scene in Berlin in the past 5 years.
Haseem Lavi, Founder of Berlin based jobseekingseeking site Jobspotting.com reported that his servers were “on fire” the day of the referendum, with four times more job seekers than usual.
“London has been the de facto startup hub for a long time,” Lavi has said, “But Berlin is catching up and with this change, it’s accelerating… clearly people are looking for alternatives.”
4. International Students at British Boarding Schools
Thanks again to the plummeting value of the Pound, prestigious UK boarding schools are expecting an influx of international candidates, according to Dr. Detlef Kulessa, the founder of Internate.org, an international boarding school consultancy responsible for approximately 30% of German scholars in attendance at UK boarding schools.
Post-Brexit prices for students are already down by 10%, and with annual prices for international students priced at around €30,000, this could mean savings of thousands per year.
Mark Peters, the Headmaster of Westbourne School has said, “This will no doubt generate additional last minute demand for this September from families that could not quite afford our fees previously… but with the above reductions, now can.”
5. Tourists Visiting the UK
With the Pound at its lowest against the Dollar in 30 years and HSBC predicting the Pound to drop from the pre-referendum price of €1.35 to €1.08 by the end of this year, tourists visiting the United Kingdom are the the first winners of Brexit.
In a recent survey from one of Europe’s largest online travel agencies, KIWI.com, nearly 80% of 54,000 EU travellers would still visit the UK in the event of an exit result.
Now that shopping, hotels and restaurants will be significantly cheaper for visitors exchanging Euros or Dollars into Pounds, the UK becomes a much more economically viable destination for travellers.
Oliver Dlouhý, CEO of KIWI.com has said, “With the weak Pound, we expect to see more people booking flights to the United Kingdom and taking full advantage of all the country has to offer.”
6. Law Firms and Consultancies
The prospect of the UK leaving the EU has brought up many complicated questions and issues that need professional answers. What EU laws will be kept by the UK? How will trading relationships between the EU and the UK develop? Or even between the UK and the rest of the world?
With the UK potentially losing approximately 60 free trade agreements between all EU members and other countries, bilateral agreements will need renegotiating. The multiple financial institutions planning to move their departments to different European countries will undertake plenty of legal legwork as they too renegotiate terms with their clients, not to mention the many UK companies with EU clients and vice versa.
“While some clients are biding their time waiting to see what steps the UK government will take next, others are proactively reviewing their options to protect their international business.” Said Urs O. Kraft, attorney at law, at Switzerland based Law offices UOK. “Since the results of the referendum in the UK, we have seen a substantial increase in enquiries for corporations seeking the fair taxation and wide access to the EU market that Switzerland has to offer.”
The fallout from the Brexit vote should be keep law firms in business for years to come around the globe.
7. Countries within the EU with an Aging Population
The German vice chancellor, Sigmar Gabriel, has broached the topic of offering dual citizenship to young Brits currently living in EU countries.
“Let’s offer it to the young Britons living in Germany, Italy or France so that they can remain EU citizens.” Gabriel said at a meeting with the Social Democratic Party last Saturday. “The youth of Great Britain are more clever than their bizarre political elite. For that reason we can’t raise our drawbridge on them. We have to think now about what we can offer Great Britain’s younger generation.”
British expats are more likely to be educated, open minded people looking for advancements in their career or education. In 2014, 56% of British people leaving the UK did so in search of a brighter future – looking for work. They are also more likely to be younger, with overall emigration down by 19% but up by 8% among 19-24 year olds.
Gabriel points out that it is up to EU countries to capitalise on the population of young, educated and open minded British expats, 80% of whom voted to remain. For countries like Germany, Italy and other European countries with an ageing, declining population, opening their doors to young British expats would be a winning move.