There have been several stories in the news recently about UK start-ups and established companies looking at options outside of London as a result of Brexit. Rival cities like Berlin and Paris have lost no time in taking advantage of the Brexit decision to woo our companies and top talent, many of whom are unsettled by the uncertainty and prospects of less favourable conditions post-Brexit. If this is not managed well, it could be an own goal for the UK government and businesses.
Ensure a competitive tax system and remove ‘red tape’
Businesses are always attracted by low-tax regions so it would be prudent for the UK Government to consider reducing corporate income tax for small businesses and providing competitive subsidies for high growth, important sectors like the digital and biotech sectors which it is attempting to promote.
Similarly, it needs to ensure income tax is competitive with other leading economies to ensure talented people are not discouraged from settling here. Raising tax on high earners, including entrepreneurs, corporate executives and skilled professionals, simply stifles economic performance and puts off investors and top international talent.
Furthermore, regulatory barriers and ‘red tape’ are ‘red flags’ to companies looking to invest. Following Brexit, the UK Government should find ways to remove EU ‘red tape’ to make it easier for businesses to start and operate within the UK.
Encourage immigration of in-demand talent
Although the Government appears to have discounted the possibility of an Australian style points-based system, it should find an alternative that makes it relatively straightforward for in-demand talent such as engineers, IT specialists, scientists and digital/online entrepreneurs to live and work in the UK. This will encourage world-class talent to settle here, particularly if their spouses or partners also gain rights to work here.
Invest in talent hubs
Regional and local ‘talent hubs’ are crucial to the development, retention and deployment of talent, as well as the healthy growth of the economy. Two great US examples spring to mind to illustrate the importance of such hubs: Silicon Valley in the US and the Boston area for Pharmaceutical and Biotech R&D talent.
The UK Government and big businesses need to take bolder steps to promote and invest in such hubs, encouraging international talent with straightforward and transparent visa systems, subsidies, excellent infrastructure, good living conditions and excellent educational institutions. Although there are good examples of this in the UK such as the “East London Tech City”, the third-largest digital technology startup cluster in the world, far too little is being done to ensure the talent conditions are best-in-class. This is equivalent to asking a premier league football club to train in a second rate training facility without the best tools and kit. Players will obviously get disgruntled and move to clubs where the environment is more conducive to them achieving their best.
On a recent visit to China, I was struck by the scale and vision of a relatively new hi-tech hub just outside Shanghai called Zhanjiang Hi-Tech Park. Although most Westerners have probably never heard of this hub, it also is home to around 200 venture capital funds, over 100 research and development institutions, more than 3,600 companies, and employs well over 100,000. As well as being a magnet for local digital and hi-tech talent, Zhanjiang is attracting Western talent. In the UK we need to be similarly ambitious and have the courage to create super-hubs if we are going to remain competitive and compete with rising giants like China and India.
Focus on building and promoting national strengths
The UK has many outstanding and varied strengths to be proud of, including our rich history and democratic tradition, diverse population, central location (allowing companies to easily deal with companies from East to West during the business day), great scenery, world-class talent, creativity, top-ranked universities, rapidly improving infrastructure and relatively low level of regulation to start and operate a company. These strengths need to be optimized and trumpeted to companies and talent around the world who might not be aware of them to attract ongoing investment and top talent.
It is crucial that the UK looks after its existing talent, particularly in sectors like Finance, Pharmaceuticals, Education and Digital/Online, as well as encouraging new best-in-class talent to our shores both during and post-Brexit. Like any company, the UK shouldn’t become complacent and assume its talent won’t move elsewhere or that it doesn’t need to put in place proactive strategies to attract leading talent to the country. Only through a focused, innovative and partnership-based approach to the challenges that lie ahead, will the Government and businesses avoid a talent exodus post-Brexit.
By James Brook, co-founder and joint MD of Strengths Partnership Ltd and co-author of business management book ‘Optimize Your Strengths’.