The vote by the UK to part ways with the European Union (EU) has created a potential for disruptive uncertainties that will invalidate any long-range scenarios based that are exploring futures related to business and government.
Need for New Scenarios
There are likely many scenarios that looked at the implications of an UK departure from the EU. Prior to the vote, the biggest uncertainty was the outcome of the vote itself. The vote results are now fact. The aftermath of the vote created a number of emergent uncertainties. These uncertainties become tangible rather than speculative now that vote results are known. This means that even if an organization created a Brexit scenario and explored its implications, the scenario set has now collapsed into a single frame and all of the uncertainties identified in the scenario exercise, and those that have emerged since the vote, must be rapidly integrated into a new set of scenarios.
Preliminary list of the Brexit Uncertainties
Here is a preliminary list of the Brexit uncertainties that organizations concerned with business (finance, trade, labor, etc.) and governance should be looking to explore.
- The duration of Brexit’s impact on global markets.
- The depth of the Brexit’s impact on global markets.
- The momentum for other countries to challenge their membership in the EU. Will Brexit precipitate other actions that challenge the stability of the EU, or is it .
- Vibrancy (or not) of the British economy.
- Role of UK as a bridge to US trade with Europe. This has been taken as a negative by many, but it is really an uncertainty. The UK mediated trade and facilitated finance before the EU, and with Brexit all we know is that there will be a change in the current model, but it does not necessarily imply that the UK will end up in a weakened leadership position in the long-term.
- High-tech investment in UK. Will companies like Google, Microsoft, and Facebook continue to make investments in the UK. While early rhetoric is negative, the ultimate answer to this question is closely tied to the vibrancy of the British economy. A vibrant economy will attract investment regardless of formal international agreements.
- Access to talent. Will the UK be able to maintain a competitive stance if it can’t easily access talent required to drive business where native talent doesn’t meet current needs. Also includes the uncertainty about the flow of immigration and labor, and the composition of the UK’s talent pool.
- The character and details of a rewritten UK regulatory framework for business and commerce.
- Trade: Movement of goods and services to and from the UK. This includes tariffs and duties, regulations, and licenses, including financial institution passporting.
- Security and flow of data across borders. How will cost of mobile voice and data, as well as where protection boundaries lie for roaming customers and multi-national transactions).
- The flow of capital into UK.
- Robustness of crowdsourced solutions.
- The character of data policy (e-commerce, privacy, streaming) once the break takes place, EU General Data Protection Regulations (GDPR) will not apply to the UK, what will replace it?
- Intellectual property regulations.
- The position and spirit of UK governance. Who will run the UK and what principals will they represent?
- State of the UK. Relationship with Scotland and Ireland, and the impact of Spain’s offer of co-sovereignty with Gibraltar.
And finally, the staying power of the Leave vote. With buyers remorse setting in, Millions of people signed a reconsideration petition, originally developed for the Remain constituency (a good example of a simple idea being able to be rapidly repurposed in the face of change). While many in the UK suggest that a revote is a non-starter, a revote is not impossible, and therefore all of the speculation about uncertainty aimed at the future of a UK severed from the EU could end up as a historical bubble should the UK eventually decide to stay. And that decision will create its own new set of uncertainties, though likely a smaller, less existential list of Brexit uncertainties than the one above.
For on-going coverage of the Brexit aftermath see The Economist Brexit page. FT subscribers can look here.