Almost two in three UK businesses (63%) say they will not be ready for Brexit by 31 October – and 26% say they need a further 6-12 months to get their company Brexit-ready – according to new research by ThoughtWorks, the global software consultancy.
The national survey asked 1,026 business leaders how long it would take their business to adapt to the key regulatory, economic and data issues that will come as a result of Brexit. There was little variation between a hard or soft Brexit on business readiness (37% for both scenarios). Only 14% of business said they were already fully prepared for Brexit – and whilst this rises to 37% being ready by 31 October – the majority are calling for more time, with 9% of respondents saying they will never be ready.
Brexit readiness by sector
Businesses in the construction sector were those most likely to say they would be ready for the impact of Brexit by the end of October – whereas those in manufacturing and the education sectors were least likely to be fully prepared. Businesses in retail (31%), health (29%) manufacturing (29%) were most likely to say they would need a further 6-12 months to adapt to the key regulatory, economic and data issues that they believe will come as a result of Brexit.
Brexit readiness by business size
The ThoughtWorks research also found that the size of a business also had a bearing on its perceived readiness for Brexit. Nearly a quarter of small businesses (23%) said they were prepared for the upcoming deadline compared to just (7%) of larger companies.
Brexit readiness by city
The ThoughtWorks study also explored business sentiment across UK cities. Whilst London is seen to be at the centre of Brexit debate, it was firms in Leeds and Birmingham that were most likely to be fully prepared for the key impacts of Brexit (for both a deal and no deal scenario). In Manchester, business leaders were most likely to say they needed an additional 6-12 months to be ready for the impact of Brexit on their company (39%). Some were calling for even more time – around a quarter of businesses in the Newcastle said they needed until 2021 to be ready (23%) – and some businesses in Liverpool needed five years (13%). Looking at the regional picture, businesses in Scotland and the north were least likely to be prepared for Brexit on 31 October.
Kevin Flynn, Director at ThoughtWorks UK commented: “After a period of unprecedented economic and political uncertainty, we asked businesses around the UK how prepared they were for the key regulatory, economic and data issues they believed will result from Brexit. It is a concern that the majority of businesses surveyed say they do not feel they are ready, and this changes little for the deal or no deal Brexit scenarios.
“In the weeks ahead, we will look more closely at how businesses plan to adapt to the new post-Brexit era. Supply chain disruption, employment of EU citizens, the falling value of the Pound and transfer of data between the UK and EU are key issues cited today as challenges for businesses. There will no doubt be opportunities from market uncertainty and we expect to see the tech gap widen, as tech-centric agile businesses adapt quickly whilst those whose technology holds them back will likely fall behind or struggle to survive.”