Impact of Brexit on the Internationalisation of SMEs in Kent

Kent County Council commissioned some research in 2016 as part of an EU-funded project to better understand the current situation with the internationalisation (export activities) of local companies including barriers to exporting and the challenges faced by businesses. This follow-up report was commissioned to better understand the evolving outlook of Kent businesses relating to international trade as the UK prepares to leave the European Union. It builds on quantitative and qualitative findings from a survey on SMEs’ internationalisation in October-November 2016, a roundtable of local businesses organised by Kent Business School in February 2017 and the Kent Business Summit that took place in January 2018.

The report starts with a discussion of the impact on inward and outward Foreign Direct Investments and continues with a discussion of the impact on both facets of SMEs internationalisation, i.e. exporting and importing activity. It then provides evidence on the impact of Brexit on the overall economic activity and concludes by summarising the key findings and recommendations.

A summary of the findings reveals the following important issues:

Firms and especially SMES should be aware of their position in global value chains.

Foreign exchange fluctuations are a major factor especially for SMEs that do not have the resources to hedge in the medium and long term.

Access to talent and skills could have an important effect.

Brexit could be an opportunity but this requires the development of an entrepreneurial approach that enables firms to become resilient.

Kent’s economy has the necessary characteristics to develop innovation and entrepreneurship.

These findings suggest that Brexit has a negative impact but this could be mitigated with appropriate support in the following areas:

Supporting businesses to having better planning and scenario analysis.

Enabling access to talent through the retention and attraction of highly skilled labour force.

Supporting an entrepreneurial approach to business through access to funding and additional specialised support in the development of ideas.