In or out of Europe? How 'Brexit' could impact the AV industry
It’s a story that’s dominated the news headlines in Europe. Politicians and analysts have had their say on ‘Brexit,’ but would Britain leaving the EU help or harm the AV industry? Charlotte Ashley reports.
It’s no secret that the outcome of Britain’s vote to leave or remain in the EU on June 23, 2016, could potentially affect the freedom of trade, inter-country relationships and future make-up of the UK’s workforce.
The electorate are fairly evenly split according to opinion polls, with a mid-April YouGov survey suggesting a 40% Remain, 39% Leave with 16% still unsure.
Britain’s biggest lobby group, the Confederation of British Industry (CBI) has backed remaining in the EU after 80% of its membership – comprising of 190,000 businesses - voted in favour of membership, with 5% supporting leaving the EU, commonly dubbed ‘Brexit’.
The Leave campaign argues entering the unchartered territory outside the EU could revitalise the British economy through a less regulated market, and avoiding the cost of membership (an estimated £2.50 a week net contribution for every UK citizen, according the 2015 House of Commons EU budget library).
An online poll conducted over two months amongst InAVate readers suggests support for Britain staying in the EU, with 59% voting that leaving would have a ‘negative impact’ on the AV industry - but what do AV companies operating in and outside of the UK think about the subject?
A public letter from nearly 200 business leaders backing the ‘Remain’ campaign was signed by names including Cisco chief executive Phil Smith and chairman of Arup Greg Hodkinson. It claimed Britain leaving the EU would “deter investment and threaten jobs,” and “put the economy at risk.”
“Talent goes where opportunity is. So if there is less opportunity in the UK because of Brexit – which I do firmly believe – there will be less talent.”
An uncertain future
Robin van Meeuwen, CEO of Crestron EMEA shares this view. “I don’t support leaving the EU. Why leave the EU? For the UK exports, it’s working. UK businesses are doing well out of the EU trade relations. Why should we go off on our own?”
Ian Vickerage, president at ScanSource Communications Europe comments: “From a business point, we’d prefer to stay in. We’re running on a European basis, and having barriers in the way of moving goods and people around is obviously negative to that.”
“I’d prefer the UK to stay in the European Union,” says Mark Wilkins, CEO of US-based distributor Stampede – who recently opened a UK office. He adds: “As soon as you start putting things in place that hinders that trade, then to me, that’s not good.”
Key account director at UK-based integrator Feltech, Nevil Bounds, commenting independently, disagrees: “Personally speaking, I can’t wait for us to leave the EU. I don’t think it will have any effect at all on the AV industry, in terms of the way we do business. The only thing that might be affected is the business of people that do rental and staging, as these people that have quite free movement of equipment between countries.” He adds: “I think there will be a massive positive impact on the country.”
The UK economy is worth nearly 2 trillion pounds a year and made a net contribution of £8.5 billion to the EU this year. The EU’s GDP is ranked the joint highest in the world with China. On its own, the UK ranks ninth. For most, the uncertainty leaving the EU would bring to the business landscape and the overall British economy is their biggest concern.
Speaking on the outcome of a Brexit, Wilkins says: “In business, uncertainty is always a problem.” He continues: “Anything that stops trade, or could potentially stop trade is a problem. Because I’m sure the European Union wouldn’t take it lying down, and you’d probably find there would be tariffs or something that would hinder Britain’s ability to compete with the rest of Europe.”
Could leaving bolster the UK economy through branching outside of Europe? “No, I think that’s completely wrong. If trade barriers go up and there’s a reason not to trade, than that takes away opportunity.”
Jon Sidwick, vice president of Maverick Europe comments: “There is an expectation that there will be costs associated to any change, and this could impact across the whole channel; for example end users pausing on investment decisions until there is clarity, and businesses assessing everything from location to regulation.”
Bounds argues there is no reason to fear such tariffs: “I don’t see inter-country tariffs being applied. I don’t think they would dare, because they need us more than we need them at the moment.”
Relocation outside Britain
The ramifications of a vote to leave the EU could be significant for businesses, with a recent survey conducted by the Bertelsmann Foundation of British and German companies indicating that almost a third would consider relocating out of Britain.
Wilkins agrees that this could happen: “We have headquarters in the US and we’re looking to expand. We are going to put our European headquarters in the UK, using it as a stepping stone for going into the rest of Europe. However, if Brexit happens, we’d have to not change, but potentially rethink our strategy.”
“A big portion of the pro-AV business comes from corporate companies, so I’m sure a lot of other corporates COOs will be thinking ‘Do we want our global headquarters in the UK? Do we want to invest in the UK? Or are we better off spending our dollars, RMBs (currency of China) or Yen putting our headquarters and jobs into the UK market, or are we better putting it into Europe, where the overall business is much bigger?’ That will directly affect the AV business, not just from a supplier point of view, but from a customer point of view too,” he continues.
Van Meeuwen believes that a Brexit could mean London loses its status as a business hub: “UK businesses would suffer and the “global” role of London would be diminished.”
Improve, not abandon
Van Meeuwen believes that the EU has been instrumental in protecting its members through preventing wide-scale conflict. “Despite its many shortcomings, thanks to the EU, we haven’t seen any wars in Western Europe since the second world war. This alone has tremendous value.”
Nearly all AV professionals stressed the need to better, not abandon the UK’s relationship with the EU. The British Chambers of Commerce states that 55% of it members back staying in a reformed EU. It is approximated that it will take at least two years for Britain’s withdrawal from the union to come into effect and be organised.
“I think the EEC has got itself into this problem because the EEC itself is badly run, bureaucratic and doesn’t listen. The concept of the EEC is obviously really hard to argue with, but the execution is terrible. It would be great if they actually improved things and the way it’s being done, and that’s more likely to happen,” says Vickerage.
Bounds disagrees that the terms of Britain’s EU membership can be renegotiated for the better: “No, I’m fed up with that, and I think a lot of other people are as well. I think it’s gone far too far in the other direction, with unelected people running it.”
One of the most hotly debated subjects in Britain is restricting mass migration from the free movement of people that the EU was founded upon. Membership to the EU provides Britain with access to a market of 500 million people, and over 2 million EU immigrants currently work in the UK – many at technology companies.
Could Brexit harm the industry’s ability to hire multi-lingual, talent? “Talent goes where opportunity is. So if there is less opportunity in the UK because of Brexit – which I do firmly believe – there will be less talent,” says Wilkins.