Uncertainty. Is there anything that financial markets hate more? Whether one voted to leave or remain in the European Union, there is no debating that this air of uncertainty will hang over the UK economy in the coming years.
While Theresa May’s mandate has clearly been hurt by the recent general election, where we saw the first minority government in Westminster for twenty years, her actions since are proof that she will try to deliver the type of Brexit that 51.9 percent of Britons wanted.
Since this historic vote, public opinion has swayed against the result of the referendum, with two trillion dollars wiped off world markets, and a consensus that if the vote took place again, a very different result could take place.
Despite this shift in the sentiment of the everyman, I will advocate in this unique instance for optimism, especially in the technology sector, and the innovative capabilities of the men and women who work there in.
The uncertainty discussed above is multi-faceted, and in itself could be worthy of a longer piece than this, however, the main concerns for UK businesses are twofold: what will become of EU and foreign employees based in the UK, both current and prospective? And how will the UK now interact, at a macroeconomic level, with the single EU market?
It is within this maelstrom of uncertainty that I, and many economists now wonder, how will the Brexit vote effect innovation in the UK going forward?
Many commentators have already discussed how Brexit will negatively affect businesses in the UK, and many figures have been bandied about concerning this. I however, am more optimistic.
Throughout history, innovation has been shown to thrive in uncertain and difficult markets. One needs look only at the rise of industry giants such as Uber, Twitter and Spotify since the global financial crisis of 2007-8 to see that innovative products or services can thrive in uncertain and difficult market conditions.
Perhaps I am a little biased in my case studies, due to my background in technology and software, however, I truly believe that innovation and innovative thinking can still occur, even in uncertain marketplaces. And as such, I am advocating taking a glass half full approach to the market, especially in the technology and software sectors.
Simon, Consultant, Leyton UK