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What Brexit means for IT businesses

Tamlin Magee | March 15, 2016
Brexit means data headaches and business uncertainty, say IT pros and lawyers

"As a result, English law-specific terms are more likely to be required than at present," he says. "This may also impact the choice of English law by US-based businesses as their preferred local law when contracting in the EU."

Taylor says leaving the EU would also undermine the perceived benefits of the European Commission's Digital Single Market project, which seeks to unify EU countries under one set of market regulations in digital.

"While no direct legislation has yet been implemented under this initiative, it is unlikely that harmonisation would occur to the same extent, although that would be determined by the format Brexit takes," Taylor says. "This makes the UK's position around the various initiatives uncertain."

Brexit for business: Prospects

For IT businesses, Brexit represents the unknown. With the government tight-lipped about any provisions for leaving, it's all speculation, and speculation is tough to prepare for.

Some of the worst case scenarios: leaving the EU could mean a shortage of talent and a drain of skilled workers. 

It could mean the redrawing of contracts, delays to procurement, and complications to trade. 

But these worries could be temporary or they could propel forward a tougher period of uncertainty.

At the same time, a prepared, slow and transparent exit from the EU does not necessarily have to be a disaster.

What's clear is that a step toward the unknown will naturally shake a conservative outlook into some businesses as they work to assess the lay of the land. The IT industry is no exception.

There are a few likely outcomes if the public casts a vote to leave.

Kemp Little's Calum Murray says Britain's got four main options.

He says Britain could embark on a route similar to Turkey, like a customs union agreement. Or it could go after the Switzerland model - with free trade agreements, or even free trade agreements by sector.

The UK could also join EFTA and the EEA to access the common market, similar to Norway. Or Britain could "forget we were ever part of the EU and treat it like any other third party we're going to trade with."

"The key takeaway is that, while we as a country have our thoughts on how we want it to run, these things are all going to have to happen by agreement," Murray says. "We're going to have to wait to see where the last of it gets out, if the vote is for coming out, for which option is actually favoured."

Owing to the extra international complications that IT faces compared to some other industries, the sector will have to prepare as much as it can to soften any potential blows.

 

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