Opinion

Life after Brexit: COMATCH founder Christoph Hardt shares his views

8 min read

25 June 2018

Editorial Director

COMATCH co-founder Christoph Hardt outlines the challenges and opportunities for British SMES after Brexit from the unique perspective of a German startup.

Uncertainty around the final Brexit deal is becoming a serious concern for businesses, as they look to have a clear answer on how to restructure in a post-Brexit world. However, little work has been done to investigate the impact of Brexit on the UK’s 5.7 million SMEs. A brief look at the results of the UK Government’s 2016 survey of SMEs shows that many business owners, particularly those in the tech-industry, believed that exiting the EU would be a serious obstacle for business. As the Brexit deadline draws closer, what can SMEs do to not only mitigate, but to thrive in an uncertain post-Brexit world? Parking politics for the moment, here are four challenges and opportunities for businesses during Brexit.

SMEs will have to find exactly the right expertise for them

Businesses will have to change how they think if they want to thrive after Brexit, with The Independent reporting that more than two-thirds of businesses will face a post-Brexit skills gap.

The skills gap will be most conspicuous in more advanced positions, as companies struggle to get to grips with the ever-more specialist and complex areas of tech, law and logistics. What’s more, businesses will need to access more niche expertise more often: a serious problem for staffing.

However, technology can now facilitate once dream scenarios, including the quick hiring of the best experts in the world for short-term projects. Researchers from Stanford University revealed that these teams, or ‘Flash Organisations’, can now be created as technology has eliminated barriers to accessing talent. ‘Flash Organisations’ are essentially short-term project-oriented teams where the best experts are recruited to complete a project. Once finished, the team disbands. The Stanford team argued that such structures gave its project members more flexibility to solve problems, and led to more innovative and longer-lasting solutions. SMEs will almost certainly have to build ‘Flash Organisations’, particularly when they come up against problems which are peculiar to them and their business. It will be worth it, however, as innovative solutions stem from innovative ways of working.

Support for SMEs in the regions outside of London

Businesses in the Midlands and the North of England will almost certainly be disproportionately negatively impacted by Brexit, with analysis by The Conversation showing these areas are most dependent on the UK-EU relationship. So how can SMEs outside London remain competitive? One answer of course is to cut costs as much as possible; another answer is to pressure the government to delegate more funding and support to the regions, so the country can stimulate more business. In my native Germany, for example, we’ve been able to build incubators across the country precisely with the aim of fostering new businesses and talent. There are many in Berlin, including the international German Accelerator Tech (backed by the German state, and with links to Silicon Valley), but what’s also very promising is the amount of provincial investment and idea generation, particularly when it comes to incubators. In the industrial heartlands of Cologne and Dusseldorf, there’s Startplatz, which has received over 100 Million Euros investment for its startups. In the south, in Nuremberg, there is the Zollhof – this in a city of less than 500,000 people. What’s more, there are at least three major incubators operating from the port city of Hamburg, drawing in talent from nearby Netherlands and Denmark.

The UK is obviously structured differently from Germany; for one thing, it’s a centralised system and not federal, with London producing and enjoying the bulk of the country’s output. However, good ideas don’t come from one place: it takes a mixture of people, conditions and locations, and all of them have to stimulated and nurtured.

SMEs will need to get their people aligned behind them with a mission and training

Discouraging headlines about Brexit look set to emerge for the next few years, and will make for depressing reading for employees. What’s more, as the RSA and Matthew Taylor advised last year, upto 13% of British employers think more than 30% of jobs will become automated in the next 10 years. This will no doubt create an atmosphere of employee disillusionment, which is why it will be imperative for British businesses particularly SMEs, to provide their employees with increased emotional incentives in their jobs.  

One clear way to encourage employee engagement is through clever company branding, and giving employees a clear sense of mission. Going deeper, however, will require opportunities for development: a recent Gallup poll found that 87% of millennials (and 69% of non-millennials) consider development as an important part of their jobs. Employees need to be given a clear path to success, and not made to feel as though they are stuck in a difficult place, as indeed, the aforementioned Brexit headlines will make them feel. Training and investment might not always be possible for SMEs to provide, but even short-courses, or in-house ones with a clear path to advancement will make a serious statement about how you intend to retain staff despite uncertain times ahead.

Give new marketing ideas a chance

Every business has to face the challenge of innovation, but Brexit looks set to pose ever more demanding obstacles (at least in the beginning) for SMEs. So how do you overcome such difficult odds? Let’s look at Rwanda, the small East African country took the intriguing and exciting approach to advertise on the sleeves of Arsenal Football Club shirt for the coming season, in a £30 Million deal. The deal has already helped the country create a new exposure for a new audience, who wouldn’t have necessarily had Rwanda in mind as a tourist destination.

Thanks to Brexit uncertainty, the temptation will be to cling to old approaches and audiences, but the Rwandan example demonstrates the level of boldness required to break new ground. For example, autonomous cars are not yet at mass-rollout stage, but they will be in several years’ time. And these cars will present an enormous opportunity for marketers – a captive audience, that most likely will require some pre-fed data about the passengers: that is very promising ground for targeted advertising. SMEs will have to start seeing new opportunities wherever they may lie.  

Christoph Hardt is co-founder and managing director of COMATCH. He tweets at @ComatchChris.