As Britain moves forward with plans to leave the European Union--a so-called "hard Brexit"--entrepreneurs across the euro zone worry that the move could have a negative impact on their bottom lines. Top concerns include renegotiated trade deals between the U.K. and the rest of Europe, and restricted immigration and access to talent.
On Monday, U.K. prime minister Theresa May won approval from Parliament to begin talks for the country's exit from the E.U. May plans to invoke what is known as Article 50 of the Treaty of Lisbon, which outlines how an E.U. member may leave the bloc--provided it gives two years' notice. (Hours earlier, Scottish first minister Nicola Sturgeon demanded that Scotland have its own referendum, to determine whether it would remain a part of the U.K.)
"Parliament has today backed the government in its determination to get on with the job of leaving the E.U.," said British Brexit secretary David Davis. "We are now on the threshold of the most important negotiation for our country in a generation."
Still, for many small businesses, "getting on with the job" is cause for concern. "Brexit seems like a step in the wrong direction in terms of integration," noted Mehdi Jaffer, head of marketing at the London-based IT services startup AlphaSights, which employs around 300 workers--a large share of whom are immigrants.
To his point, over half (57 percent) of chief executives say the stability of the European Union is an issue that keeps them up at night. That's according to the results of a recent Inc. survey, which polled dozens of European executives whose businesses landed in the third-annual Inc. 5000 Europe. An additional 29 percent of respondents cited Brexit, in particular, as a top concern.
International trade deals, and whether they would continue to be favorable to E.U. member businesses, is top of mind. Around a quarter of respondents said that decreased export opportunities, due to new tariffs or other barriers, could be especially damaging. "The biggest single concern is that the U.K. would not be able to replicate the kinds of trade deals it currently enjoys with third parties," noted Geoffrey Heal, a professor of social enterprise at Columbia Business School, in an interview with Inc. last June. Meanwhile, 28 percent of respondents said they were worried over the increased complexity and cost of regulation that Brexit could bring about.
Other concerns include restrictions on work force mobility (cited by 21 percent of respondents in the Inc. survey) and the ability to cater to customers in other markets (cited by 8 percent). For Lovehoney, a Bath, England-based sex toy retailer, the ability to hire multilingual customer service staff has been key to growing sales. "We find it very easy to grow our business by recruiting people from Europe--French, English, and German speakers," co-founder Neal Slateford recently told Inc. He added that he was concerned over whether that could become more difficult in the coming years.
Of course, it's very early days for Brexit: The U.K. wouldn't formally withdraw from the E.U. until March of 2019, according to the terms of Article 50, and there's much that needs to be hammered out before then. The U.K. government and the European Commission are set to negotiate in the coming months on issues such as international trade, E.U. citizens' rights within the U.K., and an exit fee.