As Scotland prepares not just for Brexit but also a possible second vote on independence, businesses need to future-proof themselves, says Catherine Burnet, Senior Partner for Scotland, KPMG in the UK.
It’s getting to be something of a national habit. This June’s snap general election will be the fourth time in three years that the people of Scotland have been invited to exercise their democratic right at the ballot box in a major vote. And, given that First Minister Nicola Sturgeon has now requested a Section 30 order to launch a second independence referendum, there is potential for the country to find itself in the polling booths once again before too long.
It’s fair to say that, if Brexit spells temporary uncertainty for businesses across the UK, companies north of the border face a whole extra layer of volatility. Yet, far from pulling in their horns and waiting to see what outcomes the politicians deliver in terms of fiscal policy and trade and regulatory agreements, they should be doing the very opposite. They need to actively harness new opportunities and engage with the challenges as they arise in order to create their own stability.
From what we heard from our clients at this week’s FT KPMG Brexit Boardroom Round Table in Glasgow, most are already doing precisely that. The event brought together voices from a range of organisations and industries, including academia, the health sector, local government, financial services, the food and drink sector and the energy industry. Their varied experience underlined the fact Brexit will inevitably affect different sectors in different ways: depending on their import-export model and customer-base, for example, some reported a short-term boost in profitability from the weaker pound, while others pointed to the opposite.
Not surprisingly, all spoke as one on the vital need to safeguard their future supply of skills and talent – both EU and home-grown. That’s particularly key, given the challenges Scotland faces from both a declining population and a shortage of valuable expertise in fields such as engineering. Companies understand that working more closely with universities to ensure this pipeline of business-critical skills is all part of the drive to boost the Scottish economy.
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What also struck me is how widely Brexit is seen as another component of ‘business as usual’ in running a globally-networked organisation, rather than a separate bolted-on challenge. In effect, it already features on the board agenda, in everything from dealing with currency fluctuations to questions about locating parts of the business overseas or reconstituting the supply chain. One more disruptor, in other words, to join all the others such as artificial intelligence, digital and changing customer trends, lining up to reshape the business landscape.
There’s no ‘tartan bullet’ for Brexit – or IndyRef2, if it comes to that. Businesses understand that the way to future-proof themselves is through agile contingency planning, based on choices informed by real-time risk analysis and a deep knowledge of critical paths and key investment decision points. It’s an approach that’s central to our tool to help clients through Brexit – the KPMG Brexit Navigator.
Any such plans also need to factor in the potential impacts of what could end up being a double farewell, from both the EU and the rest of the UK. That’s a vital consideration for many companies, given that Scotland’s exports to the rest of the UK are worth four times more than its exports to the EU.
Everything we heard at our roundtable event this week convinces me that businesses in Scotland want to make a success of Brexit. It can act as a catalyst to deliver a united vision for the Scottish economy – positioning the country as a stable, attractive, prosperous place in which to work, invest and grow a business.
That outcome requires close, constructive, cooperation between business and government, as well as other partners such as Scotland’s world-class universities. And there is undoubtedly a strong appetite among businesses to play an active part in this dialogue.
Brexit: A catalyst for businesses to reset their futures.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK. You can register for the email subscription list of this column and expert views from our Brexit leaders.