What does a post-Brexit world mean for UK innovation?3 min read
Brexit, will we ever hear the last of it?
Every day brings fresh news and twists in the saga which has made it impossible for anybody to predict what will happen in the next few days, never mind the rest of the year and beyond. But that is a huge issue for businesses, including the ones aiming to deliver innovative products and services in the future.
The car manufacturing industry has taken a mammoth hit over the past year, due to the fact that significantly fewer people are buying new cars, which may be attributed to the uncertainty around Brexit and how much money people will have spare if the economy crashes. Manufacturing plants have closed down and according to the SSMT, “Inward investment fell 46.5% to £588.6m last year from £1.1bn in 2017.”
Impact on innovation
The stock of UK assets held by EU investors also fell by £124 billion between 2016 and 2017 according to a report on investment after the Brexit vote as highlighted here. Expand this across other major sectors and a worrying eventuality begins to look possible. If foreign investment in the UK slows down significantly, so will innovation.
The private sector is not the only area in danger of pulling or holding investment, it is funding from the EU itself which will also be removed, though that is much more certain.
This is a serious problem for people across many industries, such as agriculture, which relies on subsidies from the EU to provide farmers with additional income and investment into farming to produce food. If that money goes, it will be difficult for farmers to invest and for research to be carried out on new equipment.
However, though less money may be around, an argument could be made that this will actually drive innovation forwards. Two examples can be used as a reference:
The world’s water crisis
Freshwater is becoming an increasingly scarce resource in some parts and the world and according to Sir James Bevan, Environmental Agency Chief, “The country is facing the ‘jaws of death’, at the point where water demand from the country’s rising population surpasses the falling supply resulting from climate change.”
This is due to environmental issues, but also the fact that the management of water systems is atrocious and the amount of water that leaks from pipes in the UK is the same as the amount that actually gets used in homes.
As a result, innovation is desperately needed in order to combat a major issue. If it doesn’t arrive, the UK will have a serious crisis on its hands.
Agriculture in the UK
One of the big problems facing UK farmers post-Brexit is the pulling of funds from the EU. A particular scheme that provides funds, allows farmers to claim money for land that they do not cultivate and allow them to grow wild.
We cover this in more detail in our piece on the future of the agriculture sector, which you can read by clicking here.
However, when the funding gets pulled, farmers will be left with land that is no longer profitable, meaning that they will have to come up with innovative ways of utilising their property more effectively.
Looking back at history to see the future
These two examples highlight that innovation is needed in difficult circumstances. Post-Brexit, it is likely that a lot of problems may need to be solved, however, as history has proven time and time again, the UK and the world has come up with incredible victories using innovative research and development.
Hopefully, the trend continues post-Brexit and beyond.