n 2016, it was clear that the social, economic and political effects of Brexit were going to be huge. Even before the negotiations and the delivery of the holiday agreement, uncertainty was rife across the UK, with real signs of business hesitation and anxiety. In fact, according to ONS data, business investment today is more than 9% lower than at the time of the Bridget referendum, and is flat from 2016 until the onset of epidemics.
On the eve of the sixth anniversary of the Bridget referendum, Britain’s secession from the European Union and the approaching 19th century have made it difficult to undo the effects of these two events on the British economy. However, the evidence we have strongly suggests that Bridget’s There must have been a significant impact. However, and perhaps surprisingly, for years after the referendum, the impact of Brexit on trade has been limited – so far.
This is not free trade.
After endless negotiations and a series that felt like many twists and turns, the UK finally reached an agreement with the EU and we introduced the Trade and Cooperation Agreement (TCA), meaning trade remained tariff-free. And while it is premature to draw any conclusions about the long-term effects of Brexit on trade, it is clear that TCA failed to remove the regulatory, logistical and administrative hurdles that many businesses feared, potentially As UK businesses are reconsidering the structure of their supply chains..
ONS BICS data Businesses that rely on imports and exports had plans to adjust the supply chain before Brexit, he said. However, during 2021, changes in supply chain retail, for example, more than doubled. The TCA is a potentially important driver, because when it stopped the tariff burden, it was no substitute for free trade and it produced a lot of red tape.
Beyond the UK borders
If we compare the UK’s trade patterns with the major economies that were similarly affected by epidemics, including France, Italy and Germany, as well as the United States, their trade is now on the upswing, while not the UK’s. Is. Furthermore, in 2021 and 2022 after most G7 economies have grown, The UK could be the slowest growing economy in the G7 in 2023. (Excluding Russia)
In this environment, new supply chain strategies are emerging and being implemented – especially near shores (redesigning supply chains to be closer to home) and supply chain diversification (suppliers). Expanding the network).
Using ONS data, Dun & Bradstreet’s work shows that during pre-transition planning, small businesses tended to be on the near shore, while larger firms sought to create flexibility through a combination of the two strategies. Tried However, that all changed by December 2021, when businesses had 12 months to experience the real-life effects of leaving the EU and TCA and to adapt their business operations accordingly. Businesses of all sizes underestimate the need for diversity. For example, by the end of 2021, the number of firms with 0-9 employees that diversified into supply 1.5 times larger Compared to those who planned to do so in 2020. This was for firms with 50-99 employees. 83% more And for firms with more than 250 employees 66% more.
Do not put your eggs in a basket.
While the nearby coast is becoming increasingly popular.Businesses should be aware that relying solely on a market can increase risks, which cannot be overcome. For some businesses, this may be the way to combine nearby beaches and supply diversity. A portion of imports and exports are close to home, but there is also a diverse number of suppliers so you can rely on a single market and recalibrate more easily in the event of a shock.
Clearly, the UK’s exit from the EU helps to establish a new geography of the supply chain, which has been further complicated by the strengthening of CoVID-19 and de-globalization forces. In this changing scenario, building flexible supply chains will require businesses to assess risk at various stages of the chain, in many ways, and data is important. The data that granular and timely insights can provide will be critical to establishing stronger supply chains and competitive advantage. And as Britain paves the way for its newcomer. Digital strategyBusinesses need additional support when it comes to using data to mitigate risks and seize opportunities.