Brexit’s impact on global tech 23 January 2019 · Brexit will impact people, politics, economics, and business Brexit – the term used to refer to the UK’s planned departure

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Thematic Research: Technology GDTMT-TR-S205

Brexit’s impact on global tech 23 January 2019

Inside Winners and losers Brexit timeline Parliamentary roadmap Outcome analysis Predictions by sector Impact analysis Report type Single theme Multi-theme Sector Scorecard

Brexit will impact people, politics, economics, and business Brexit – the term used to refer to the UK’s planned departure from the European Union (EU) – is one of the most important and controversial political stories of recent times.

Technology companies worldwide need to reformulate their strategies and progress action plans in preparation for Brexit. The rejection by Members of Parliament (MPs) of British prime minister Theresa May’s Brexit deal has left the technology industry staring at a ‘No Deal’ scenario, with potentially severe impacts on the ability of tech companies to service contracts with customers and worries over falling investment and failing competitiveness because of the ongoing political and economic uncertainty.

Winners Large global tech players, such as Microsoft, IBM, Amazon, Facebook

and Oracle.

Financial technology (fintech) companies, which have been forced to plan early as banks move operations for Brexit regulatory reasons.

Losers UK tech start-ups and scale-ups, which risk losing funding.

Those waiting until the last minute hoping a solution will turn up.

TV broadcasters, telecom operators and space companies facing skills shortages.

Inside, we look at five Brexit scenarios for each sector The table below summarizes our five Brexit scenarios and the corresponding outlook for six tech sectors: hardware, software, internet, TV, telecoms operators and space.

It is based on interviews with specialists on key issues in each sector.

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Sector/Brexit Type No Deal May's Deal Customs Union Renegotiated Deal

Hardware Optimistic Pessimistic Wait and See Optimistic Wait and See

Software Optimistic Pessimistic Wait and See Optimistic Wait and See

Internet Optimistic Pessimistic Wait and See Optimistic Wait and See

TV Broadcasters Wait and See Pessimistic Pessimistic Optimistic Wait and See

Telecoms Operators Optimistic Pessimistic Wait and See Optimistic Wait and See

Space Companies Optimistic Pessimistic Wait and See Optimistic Wait and See

End Outcomes

Current State

GDTMT-TR-S205 Brexit’s impact on global tech 23 January 2019

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Contents

WINNERS AND LOSERS ................................................................................................................................................................ 3

The big global tech players have the footprint to weather the storm .............................................................. 3

The biggest loser will be UK Plc ...................................................................................................................... 3

BREXIT TIMELINE ......................................................................................................................................................................... 4

PARLIAMENTARY ROADMAP .................................................................................................................................................... 5

BREXIT OUTCOME ANALYSIS .................................................................................................................................................... 6

May’s Deal ....................................................................................................................................................... 6

No Deal ............................................................................................................................................................ 6

Customs Union ................................................................................................................................................ 7

Renegotiated Deal ........................................................................................................................................... 7

SECTOR PREDICTIONS FOR ‘BREXIT’ SCENARIOS............................................................................................................... 8

Hardware ......................................................................................................................................................... 8

Software and services ..................................................................................................................................... 9

Internet .......................................................................................................................................................... 10

TV broadcasters ............................................................................................................................................ 11

Telecoms Operators ...................................................................................................................................... 12

Space companies .......................................................................................................................................... 13

BREXIT IMPACT ANALYSIS ....................................................................................................................................................... 15

Current State: Macroeconomic concerns ...................................................................................................... 15

Current State: Regulatory concerns .............................................................................................................. 16

‘Hard Brexit’ situation: Macroeconomic concerns ......................................................................................... 18

FURTHER READING .................................................................................................................................................................... 22

ACKNOWLEDGEMENTS ............................................................................................................................................................. 22

APPENDIX: OUR THEMATIC RESEARCH METHODOLOGY .............................................................................................. 23



Winners and Losers There are five key areas which have been identified as challenges that must be overcome to mitigate the impact of Brexit on the tech sector. They are:

securing the continued free flow of data;

ensuring continued access to talent;

enabling the frictionless movement of tech products and services across borders;

providing alignment on rules covering digital services to avoid barriers to market access; and

retaining access to EU funding streams such as Horizon 2020 and the European Investment Fund.

With no clear picture yet emerging as to what Brexit will ultimately look like – ‘No Deal’; May’s Deal; Single Market; Customs Union; deals of the kind secured by Norway and Canada – tech executives used to taking decisive action could be forgiven for adopting a ‘wait and see’ approach before deciding what to do.

You might think there are few, if any, ‘winners’ from Brexit, only ‘lesser losers’, but it’s clear there are going to be winners. In any time of significant change, there always are.

The big global tech players have the footprint to weather the storm The big global tech players will come through the waves caused by Brexit because they have a big enough boat to ride them and a European harbor to sail for. Those that have the infrastructure already in place, including a European base, will be well equipped to cope, provided they can rely on smaller suppliers in the event of a ‘No Deal’, as will those firms – typically fintech companies – that benefitted from a regulatory push that forced them to plan, act early, and (in many cases) move out of the UK, several of them to Ireland.

If large companies with resources will be winners, then smaller players lacking significant manpower are more likely to be losers. Telecom operators, which need skills to tackle full-fiber rollout, TV broadcasters which will have to move operations to the EU, and space companies unable to bid for secure signal work on the EU’s Galileo global navigation satellite system (GNSS), will face challenging times, as will those companies that simply sit there, hoping something will turn up.

The biggest loser will be UK Plc The biggest losers will be UK tech start-ups and scale-ups in search of funding. The UK has typically been the default stop for US tech investment, but any Silicon Valley CEO looking at the UK’s likely post-Brexit hangover (and current political turmoil) will either put off a decision indefinitely or opt for an alternative base that is both tech-friendly and offers strong English-language skills. “Dublin or Amsterdam will do fine for now – and we’ll look at it again when things are clearer,” would be an understandable response.

That is not to say UK tech investment will dry up altogether, but it’s likely, for now, that the UK will no longer be the default setting on the US corporate investment dashboard. When there is more post-Brexit business clarity, that investment will be back.

Another potential casualty from Brexit is likely to be the UK’s lofty ambition to be a leader in artificial intelligence (AI). The UK academic community is doing groundbreaking research into AI, but uncertainty over future European research funding – indeed funding generally – threatens to introduce unwanted barriers to those efforts. Ultimately, just as Brexit has already led to TV companies going to the Netherlands and fintech companies to Dublin, it is possible that new European research centers will attract top AI talent from the UK and the UK’s hopes of being a leader in AI will prove to be literally ‘artificial’.

The government talks a good game about winning the global race, in areas like AI but not even British athletics legend Mo Farah could win a race with his legs tied together. If the government expects the UK’s tech sector to continue to thrive it has to create the conditions for it to do so.

A ‘No Deal’ Brexit has been described by techUK CEO Julian David as “like pulling the handbrake at 70mph on the motorway. You don’t know what will happen. All you know is that probably a lot of things will break.”



Brexit Timeline How did we get here? Since the early hours of June 24, 2016, the UK has been on its way out of the EU. This story has dominated the political, economic, social and news agenda in the UK ever since. The major milestones in the journey towards Brexit are set out in the timeline below, but there are undoubtedly more to follow as Britain’s people, politicians, and businesses – their leaders and employees – wrestle with the reality of undoubtedly the biggest upheaval for the country since the Second World War.

Source: GlobalData

The story of Brexit so far… 2014 May 22: The UK Independence Party (UKIP), led by Nigel Farage, wins 24 seats in the UK’s component of the 2014 European Parliament elections, gaining 27% of the popular vote, marking the first time since 1906 that a party other than the Labor Party or the Conservative Party has won the popular vote. UKIP – which considers a referendum on the UK’s position in the EU as a cornerstone of its manifesto – also makes considerable gains in the concurrent local elections.

2015 May 7: Prime Minister David Cameron wins a 12-seat majority at the general election based on a manifesto that includes a commitment to hold a referendum on the UK’s future membership of the EU. Shortly after this victory, Cameron’s ruling Conservative Party sets the date for the Brexit referendum for June 2016.

2016 June 23: After a contentious referendum campaign, the UK voted to leave the EU by a margin of 51.9% to 48.1%. The national turnout (72%) was the highest ever for a UK-wide referendum. David Cameron, who led the Remain campaign, resigns as Prime Minister on the morning after the referendum. He is replaced the following month by Theresa May.

2017 March 29: The UK invokes Article 50 of the Treaty on European Union, formally beginning the withdrawal process. Article 50 gives both sides two years to reach agreement so, unless the UK and the 27 remaining EU member states agree to extend the deadline for talks, the UK will leave on March 29, 2019.

June 8: Having called a snap general election in order to consolidate her authority, Theresa May suffers a serious setback when the Conservative Party loses its majority in the House of Commons. May remains as Prime Minister of a minority government supported by Northern Ireland’s Democratic Unionist Party (DUP).

2018 November 14: Theresa May gains support from the Cabinet for her Withdrawal Agreement and outline political declaration on the future EU relationship.

December 11: Conservative MPs trigger a confidence vote in May, following mounting criticism of her handling of Brexit negotiations. May wins the vote, but over a third of Conservative MPs fail to support her.

December 19 The government publishes a white paper setting out plans for a tough UK immigration regime post-Brexit.

2019 January 8: May suffers a Parliamentary defeat as 20 of her own MPs vote against the government over an amendment to the finance bill that will curb some of the government’s tax administration powers in the event of ‘‘No Deal’. Among the rebels are six former cabinet ministers and 11 former junior ministers. May’s opponents say the defeat means a ‘No Deal’ Brexit is unworkable and that May should explicitly rule it out.

January 15: The delayed ‘meaningful vote’ takes place, and May’s deal is massively rejected. The scale of defeat, by a majority of 230, was greater than any seen in the past century and triggered a No Confidence debate the following day, which the Prime Minister won. She then offered to discuss new options with other parties.

March 29: The UK is due to leave the EU.



Parliamentary roadmap After two years of negotiation and countless trips to Brussels, plus the rise and fall of several Brexit secretaries, the tortuous legislative path of EU Withdrawal through the House of Commons should be nearing its end. The problem is that, as the clock ticks down to March 29, no-one yet knows what Brexit really looks like.

The long and winding parliamentary road What are the possible routes to Brexit?

Source: GlobalData



Brexit outcome analysis There are a range of possible outcomes to ‘Brexit’, all of them largely dependent on political twists and turns.

Here are the most likely scenarios, as of January 22, 2019, in order of the likelihood of occurrence:

Most likely Renegotiated Deal Customs Union May’s Deal No Deal

Least likely One of the characteristics of the UK’s journey towards leaving the European Union has been the confusion and lack of clarity even a matter of weeks before Britain is due to leave the EU on March 29. By arguably over-hastily triggering Article 50 and the subsequent two-year countdown before the country had even made its mind up on what “Brexit means Brexit” looked like, Prime Minister Theresa May set a clock ticking that is now inexorably winding down and left the country with three, or possibly, four scenarios. The House of Commons however remains riddled with uncertainty on what the outcome of those various scenarios might be.

The four main scenarios are detailed below.

May’s Deal A Withdrawal Agreement with the EU – a “Soft Brexit” The Withdrawal Agreement negotiated by Theresa May provides a provisional text which exceeds 500 pages in length and facilitates the end of a 45-year of political marriage between the UK and EU. The agreement establishes key rights and sets out outstanding obligations. Given that both sides will now have to adjust to their new relationship, the agreement creates a transition period which will run until the end of 2020. It is possible that this could be extended, by mutual agreement, for a set time.

During the transition period, Britain would exit all the EU’s political institutions though it would continue to apply EU law in full. However, in leaving the EU’s institutions, it loses any say and influence over its rules and decisions. In order to come into legal force, the Brexit deal must clear several approval hurdles. Late in 2018, it was approved by the Cabinet and the EU but on January 15, it failed to clear the House of Commons.

Situation The Withdrawal Agreement was due to be voted on by the House of Commons in a ‘Meaningful Vote’ before Christmas 2018, but, facing a defeat of up to 200 votes, largely over the issue of the Northern Ireland ‘backstop’ (which seeks to avoid a “hard border” – involving physical checks or infrastructure – between Northern Ireland and the Republic of Ireland), Theresa May pulled the vote and rescheduled it for mid-January. Having overwhelmingly lost the January vote, May is unlikely to make another attempt to push her deal through without achieving further concessions from the EU. The EU, for its part, has made it clear that there can be no re-negotiation of the Withdrawal Agreement.

Impact When – or if - May wins a parliamentary vote on a Withdrawal Agreement, a separate trade agreement will still have to be struck by the end of any transition period. There have already been suggestions that such a deadline is likely to be too tight, necessitating a further extension. The May deal was, begrudgingly, backed by much of the tech industry, though not by all of it. That the Withdrawal Agreement, in its current form, fell has now left some tech suppliers rethinking their preferences.

No Deal No Agreement with the EU – a “Hard Brexit” The reality for the House of Commons is that MPs have already voted for the UK to leave the EU on March 29. The question is: will there be a deal with the EU ahead of that date that is backed by MPs? If not, then the UK will leave without a deal. That is the current reality. For ‘No Deal’ to be ruled out, something must replace it.



Situation A ‘No Deal’ agreement is the outcome most politicians – and the tech industry - wants to avoid, though there is a cadre of Brexit supporters (often referred to as Brexiteers) who would welcome such a scenario, as it involves an immediate severing of all links with the EU (a “Hard Brexit”). In the case of a ‘No Deal’ situation, a series of well-publicized and equally well-criticized emergency plans put in place by the government would come into force. However, it is possible that a series of emergency House of Commons motions could be introduced to try and prevent a ‘No Deal’ scenario occurring. One development has seen Conservative, Labour and Liberal Democrat MPs voting on amendments to the Finance Bill which would see the Treasury’s powers stripped if a Hard Brexit goes ahead without the consent of MPs.

Impact In a ‘No Deal’ situation, the implications for global TMT companies are stark, with the UK immediately being designated a ‘third country’ with implications for data protection, and a high level of uncertainty about individual citizens’ rights and future immigration systems, with freedom of movement coming to an immediate end. The impact of ‘No Deal’ on the UK’s customs arrangements is likely to be most disruptive. With no customs agreement, there would be significant disruption for businesses trying to bring goods into the UK from EU countries. Also, there would be no UK-EU trade agreement guaranteeing access to the Single Market.

Customs Union The ‘Norway’ Option The fear of leaving the EU with ‘No Deal’ being the only alternative to May’s Deal has led MPs across the House of Commons to weigh up alternatives that could gain a majority in Parliament. The options being considered range from a Norway Plus or Common Market 2.0 option to a Second Referendum. May however remains implacably opposed to both a new referendum and a Customs Union, and she has also declined to rule out a ‘No Deal’. A Customs Union means all EU 28 member countries form a single territory for customs purposes. This means that: no customs duties are paid on goods moving between EU Member States; all apply a common customs tariff for goods imported from outside the EU; and goods that have been legally imported can circulate throughout the EU with no further customs check.

Situation This scenario became more likely following Theresa May’s failure to get her agreement through the House of Commons. There has also been an ongoing campaign for a second referendum or People’s Vote and, now more loudly, as an option more MPs could support, for the UK to remain in the Customs Union, all of which May has continually ruled out. Labour has now called for the Commons to vote on whether to hold a second referendum and on its own proposal that the UK remain in a post-Brexit Customs Union with the EU and have a strong relationship with the Single Market.

Impact Campaigners continue to make their case for the UK to stay in the Customs Union and Single Market through the so-called ‘Norway model’ – the latest version actually calls for a ‘Common Market 2.0’ - or a permanent Customs Union, or a Canada free trade agreement. A recent poll of tech companies said that supporting calls for another referendum would be their preference. Some form of Customs Union, which is the position of the Labour Party, seems to have some broad support across the House of Commons. Theresa May, however, appears to have ruled it out for fear that the proposal would split the Conservative Party.

Renegotiated Deal Involves Article 50 Extension On 29 March 2017 the UK invoked Article 50 of the Treaty on European Union which leads to its withdrawal from the EU. There is a two-year clock ticking from that date. The EU has said it will not extend Article 50 simply to give the UK more time to make up its mind, but would consider extending Article 50 for a second referendum or a General Election. Extending Article 50 is not in itself a long-term solution, but it is a means to an end.

Situation Given the current impasse across all sides of the House, there have been several calls for Article 50 to be extended, a development which would need the EU’s agreement. An agreement to extend is likely to be short term with European Parliamentary elections taking place later this year. May’s refusal to countenance extending Article 50 continues to retain the focus on – and the pressure for – her own deal.

Impact The impact on the tech industry would probably be a continuation of the uncertainty it has experienced since the original vote in 2016. However with March 29 approaching fast and the House of Commons still to make up its mind, asking for an extension to Article 50 would deliver ‘less uncertainty’ than the impact of No Deal.



Sector Predictions for ‘Brexit’ Scenarios Hardware Ahead of March 29, when the UK is expected to leave the EU, the current state still provides certainty for businesses moving hardware (and IT services) in and out of the country. There remains a clear regime for customs which means that spare parts can easily be shipped in and out at will without needing stockpiles of parts to be created. Parliament’s rejection of Theresa May’s deal – and, more importantly, the lack of an agreed alternative - makes the need for stockpiling more necessary and urgent.

Similarly, the testing of consumer electronics goods can currently take place in the UK with a UK CE badge recognized anywhere in the EU. There is no need for goods approved in the UK to be re-registered elsewhere in the EU in order for the CE mark to be recognized there. Both of these situations will change when the UK leaves the EU, whether as a result of ‘No Deal’ or any other outcome which does not retain access to the Single Market or Customs Union. There has been a likelihood since December that Theresa May’s deal would not receive Commons approval, so far-sighted hardware companies will already have been taking steps to prepare for a ‘No Deal’.

Hardware companies are likely to be happy with the current picture across factors such as innovation, investment, skills, regulation and market access but will also be resigned to change. They might well be happy to remain in a Single Market or Customs Union, but will be fearful of the discomfort ‘No Deal’ would bring, especially in terms of regulation and market access, and lukewarm about an extension of Article 50 as, while it would certainly prevent ‘No Deal’, it would not, for now, bring any more business clarity or investment certainty.

The table below describes the attitude of senior executives in the hardware segment of the global technology, media and telecoms industry to various Brexit outcomes.

Type of deal Innovation Investment Skills Regulation/market access

Data Overall outlook

Current State

No Deal

May’s Deal

Customs Union

Renegotiated Deal

Key: Content Worried Fearful Wait and See

In the overall rating, Green denotes an optimistic attitude, Red a pessimistic attitude while Yellow suggests a resigned, ‘wait and see’ attitude



Software and services The twists and turns over Brexit have convinced many tech companies that they would prefer close alignment with the EU after Brexit. Recent surveys suggest that, rather than wanting greater flexibility over the rules surrounding the digital sector, enterprises would prefer the greater certainty of market access. Smaller companies, with limited financial resources, are more likely to want a future relationship that retains a high level of alignment with the EU on issues such as the free flow of data, regulation and the availability of talent.

Simon Hansford, the chief executive of public cloud company UKCloud told GlobalData, “Our main fear about Brexit has been about ensuring we can maintain our elasticity and ability to scale...We expect this to be one of the main consequences of Brexit for cloud providers based in, or operating out of, the UK. Also, the prospect of tariffs and a weakened pound is something all cloud providers will be concerned about, given that almost all of our hardware comes from the US via Europe.

“If the Brexit uncertainty continues, or if we leave with ‘No Deal’, inward investment, which is already slowing down, will be discouraged further, and will almost certainly slow down the UK’s digital economy – and that isn’t in anyone’s interest. None the less, whatever one thinks of Brexit, there could be long term opportunities if the UK was prepared to be a genuine leader when it came to digital. Not just in its innovation, and in its approach to the government’s own transformation, but also through its approach to its policies and regulation.”

Other software and services suppliers have seen UK contracts being renewed to provide continuity of service. IBM gained a 17-month contract extension with the Department for the Environment, Food and Rural Affairs (DEFRA). Law firm Bird & Bird advises tech companies to audit their existing commercial contracts and assess what effect ‘No Deal’ may have on the enforceability of English law contracts where there is a non-UK element.

In the event of ‘No Deal’, for sales of software and services between the UK and EU and vice versa, WTO rules treat sales of packaged software as products covered by the 1996 Information Technology Agreement. Whether cloud-based or sold on physical media, international software sales between the UK and the EU should remain tariff-free. Like hardware firms, software companies will have significant fears about skills, inward investment and data. An Article 50 extension would avoid a Hard Brexit, for now, but considerable uncertainty would remain.

The table below describes the attitude of senior executives in the software and services segment of the global technology, media and telecoms industry to various Brexit outcomes.

Type of deal Innovation Investment Skills Regulation/ market access


Current State

No Deal

May’s Deal

Customs Union

Renegotiated Deal


In the overall rating, Green denotes an optimistic attitude, Red a pessimistic attitude while Yellow suggests a resigned, ‘wait and see’ attitude.



Internet The UK has Europe’s biggest ecommerce market, with UK online shoppers spending more than their European counterparts. In 2017, the highest shares of online shoppers among internet users aged between 16 and 24 were registered in the Netherlands (90%), Sweden (89%) and the UK (88%). The UK also had the highest share of older online shoppers aged from 65 to 74 (75%).

The market should be set for the future, but now the UK is leaving the European Digital Single Market (even though it wants to stay as close to it as possible) and that brings uncertainty for online sellers and buyers, and also brings issues around VAT registration for ecommerce companies.

In the event of ‘No Deal’, the UK would no longer participate in the EU’s VAT area, which will require businesses to register with HMRC to be able to comply with VAT requirements, as well as registering for the EU VAT Refunds Scheme via 27 different EU tax authorities. That could have a major impact on organizations selling goods through e-commerce platforms, as they will have to ensure that they have all their paperwork completed to be properly VAT registered in multiple countries. That may not be so much of a problem for the largest ecommerce players, but could well be an unwanted headache for smaller firms.

The table below describes the attitude of senior executives in the internet segment of the global technology, media and telecoms industry to various Brexit outcomes.



Current State

No Deal

May’s Deal

Customs Union

Renegotiated Deal





TV broadcasters The UK is the most important location in the EU for companies broadcasting television channels to other EU member states, but Brexit will put this pre-eminent position under threat as licenses issued by Ofcom for broadcasting to the EU will now have to be issued elsewhere in Europe.

The UK benefits from having a large domestic broadcasting market, a stable and well-respected regulatory regime, good access to highly-skilled workers, excellent post-production facilities and a range of satellite uplinks and technical transmission providers. Retention of skills post-Brexit is also a concern. According to Ofcom, up to 40% of people working in the UK’s creative industries may be EU nationals with no UK citizenship.

For the broadcasters, especially those who wish to continue broadcasting to the EU, the die has long been cast. The advice given in 2018 was to allow at least six months to investigate where to move to in order to gain new licenses to be able to broadcast to the EU. Potential other jurisdictions where broadcasters could re-license in order to continue broadcasting to the EU include Ireland, the Netherlands, Luxembourg, Malta, and Estonia. In January 2019, the Discovery Channel opted for the Netherlands, citing Brexit as a key reason for its decision.

The impact of Theresa May’s deal, taking the UK out of the Single Market, forced broadcasters’ hand. Broadcasters had sufficient concerns over skills and market access to see May’s deal in the same light as ‘No Deal’. Given the six months lead time, they had to move. Any future policy shift to remain and stay in the Single Market would be ‘too little, too late’ as far as broadcasters’ market access is concerned – they’ve already gone (although it might eventually help in terms of skills retention).

The table below describes the attitude of senior executives running TV broadcasters to various Brexit outcomes.



Current State

No Deal

May’s Deal

Customs Union

Renegotiated Deal





Telecoms Operators For the last few years, the UK has benefited from a stable regulatory regime, provided by Ofcom and overseen by the European Commission (EC). The EC’s role has been to watch over the UK’s legal frameworks to create a single European market for telecoms and play a key role in promoting harmonized regulation. Ofcom says it has analyzed the laws that govern the UK telecoms industry and advised the government how they can continue to work after Brexit. In the longer term, Ofcom would like to see a triple test applied when deciding which EU laws should continue to apply in the UK. Firstly, does it prioritize the interests of UK consumers and the wider public? Secondly, does it promote competition and investment? Thirdly, does it support UK companies’ ability to trade successfully in the EU, and EU companies’ ability to serve UK customers? A key issue is likely to be the length of market reviews, which may move to five years rather than the current three. That might be attractive to investors who will see two more years of market certainty.

Another key issue in the event of ‘No Deal’ is the removal of oversight that the EC has of Ofcom’s decision-making powers. Currently, the EC can review and potentially override any decisions or at least tell Ofcom to re-think them, though it rarely uses these powers. A widespread view in the telecoms sector is that the very process of having oversight delivers better quality regulatory decision-making for the UK market.

Ofcom has previously expressed its concerns about data protection when the UK leaves the EU. In a speech in 2017, the regulator’s chief executive Sharon White said, “Clearly, media and telecom operators need certainty that the UK, which already complies with EU data law, will retain this status. Without that assurance, pan-European operators will face practical and commercial disruption.”

The table below describes the attitude of senior executives in the telecoms segment of the global technology, media and telecoms industry to various Brexit outcomes.



Current State

No Deal

May’s Deal

Customs Union

Renegotiated Deal



For telecoms operators, a ‘No Deal’ Brexit raises concerns over UK providers’ access to equipment at a time of the year (March/April) when poor weather is likely to necessitate urgent telecoms repairs. Telecom operators will have to undertake equipment audits to see both where they may need to stockpile equipment in the UK, as well as find other partners that they may need to utilize for their operations in the EU.

A second, more significant issue, is access to labor. The UK government’s ambition is to deploy a lot more full-fiber connections. That necessitates digging up roads and is generally done by people who are seen as less



skilled. The new migration White Paper does not allow frictionless migration from the EU or other countries into the UK, exacerbating a challenge for the UK telecoms market by restricting the quantity of contractors.

To achieve the government’s target cost for full fiber deployment per home passed, then a supply of cheap labor is needed. The UK’s full-fiber work needs to continue for 15 years, with a build target of two million premises passed every year, meaning whatever the shape of Brexit, skills remains an issue for telecoms.

A further future issue will be what happens to roaming post-Brexit. If there is a negotiated withdrawal, surcharge-free roaming will continue to be guaranteed during the transition period until December 2020. Following the transition period, the arrangements for roaming, including surcharges, will depend on the outcome of negotiations of the future economic partnership between the UK and the EU. If the UK leaves the EU without a deal, the costs that EU mobile operators could charge UK operators for providing roaming services would no longer be regulated, meaning that surcharge-free roaming during travel to the EU could not be guaranteed.

Space companies Space companies will be significantly impacted by Brexit. On November 30 last year, Theresa May announced that the UK will no longer seek access to the secure aspects of Galileo. It followed negotiations between the UK and the EU over what level of involvement the UK’s national security, defense and critical national infrastructure sectors will have in the development of the secure system, as well as the level of space companies’ participation in the space sector, which has grown by over 70% since 2012.

Key to the issue is the UK’s future involvement in the development of the encrypted Public Regulated Service (PRS) for Galileo, designed especially for government-authorized users. Although the UK will still be able to access the secure side of Galileo - as long as a security agreement is concluded - the UK’s exclusion from the development of the PRS led to the government concluding that it would not be in the UK’s security interests to use the system. The government has now said it will press ahead with developing a British GNSS and has launched a £92m study to fund an 18-month program to design such a system. However, given the length of time of the study, procurement opportunities for space companies are unlikely to emerge much before the summer of 2020, assuming a UK GNSS gets the go-ahead.

Currently, the UK participates in several European Space Agency (ESA) and EU Space programs, such as Galileo and Copernicus. While the UK’s membership of the ESA is separate to its membership of the EU, failure to secure access to programs may lead to an industrial and security capability gap.

If the UK fails to secure a deal, UK organizations will have no access to Horizon 2020’s successor, Horizon Europe, or to the remainder of Horizon 2020. In addition, without a UK commitment to match EU funding the UK is at risk of developing a long-term funding gap for research and innovation, as the EU currently funds almost £100m of UK R&D in the aerospace, security and space sectors every year.

The UK has done well out of the Galileo project, which was launched in 2003. London has funded roughly 12% of the annual budget and received a work share of more than 15%. Fearing being cut out of access to the Galileo secure system, providers of navigation systems satellite tracking services are now moving to other EU countries. The irony is that it was the UK that said it didn’t want anyone from outside the EU having access to the detailed security protocols and what’s underneath them “because we run national security programs off that.”

Countries that are not in the EU can still bid for time on the satellite, but cannot build things for it because to do so would require knowledge of the security protocols.

Jeegar Kakkad, chief economist and director of policy at ADS (the trade organization representing the aerospace, defense, security and space industries in the UK), said the UK’s post-Brexit departure from involvement in Galileo may have implications for the police and emergency services, as well as security services and emergency response systems, as the UK may not be able to access the secure signal which provides access to high resolution images of the Earth from space. “Access to that secure signal post Brexit will need to be negotiated,” Kakkad told GlobalData.

Key issues to be considered in the development of a new UK GNSS include what the timeline is likely to be, what the costs are and who the partners will be. Besides the existing US GPS and European Galileo systems, there are also Russian and Chinese systems which, for security reasons, would not be potential partners for the UK in the building of a new system. Any UK GNSS project is likely to take between five and 10 years to build and cost anything from £3bn to £5bn. Whoever the UK partners with – and Australia, Canada or Japan have all been mentioned as potential partners – is likely to want to see procurement opportunities emerge for their own space and industrial specialists.



Another key factor to be considered when assessing potential partners are the reasons – possibly geopolitical – that certain countries are in the market for a secure signal. They may have their own considerations as to why they would not want to rely on the US or Galileo signal. Companies likely to be in the market to play a key role in building any new system are Airbus, BAE Systems, Leonardo, Inmarsat and Avanti.

Although the UK does not have a stellar reputation in the delivery of large-scale technology projects, Kakkad insists there is no reason at this stage to believe that a UK ‘Galileo’ project would necessarily overrun.

“We have seen issues with other projects when the direction changes. The UK tends to go for the lowest cost approach and a specific approach. Arguably, in this case, it should take a more open and collaborative approach to the process and needn’t over-specify things.”

Considering the merits of Theresa May’s deal for the space sector in comparison to what would happen if the UK crashed out without a deal, space specialists point out that May’s deal allows for a transition period where the status quo remains, allowing the sector to determine its future space relationship with the EU. One specialist said, “It means we could potentially maintain some cooperation on space and R&D programs with the EU going forward post-Brexit.”

The table below describes the attitude of space companies to various Brexit outcomes. The ratings are a judgement given the issues discussed.


Data Overall rating

Current State

No Deal

May’s Deal

Customs Union

Renegotiated Deal


In the overall rating, Green denotes an optimistic attitude, Red a pessimistic attitude while Yellow suggests a resigned, ‘wait and see’ attitude



Brexit Impact Analysis In this section we assess the impact on people, politics, economics, and business of two Brexit scenarios:

current Brexit situation

‘hard’ Brexit

Current State: Macroeconomic concerns The table below highlights the key macroeconomic concerns resulting from the current Brexit situation.

Concern Consequences

Value of digital economy

The UK’s digital sectors account for roughly 16% of domestic output, 10% of employment and 24% of UK exports, according to techUK. The UK marketplace, as a result of its geography and existing membership of the EU, provides clear access and a bridge to European markets for technology companies both from the UK and around the world. Those companies take advantage of the strength of the UK digital and technology sector, for which access to markets, talent and data flows are three key priorities. Tariffs on digital goods are generally low and are limited by World Trade Organization (WTO) rules. The primary trade-related risks for the digital sector overall from Brexit are likely to be through non-tariff barriers, for example, for the regulation of services activities. According to GlobalData figures, the UK’s ICT market is the fourth-largest in the world, valued at $153bn in 2018. However, the uncertainty in the ‘type’ of Brexit being followed has already led to economic uncertainty, with investment decisions being put off.

International focus

There is undoubtedly a strong international focus to the UK sector, which itself comprises the UK operations of global technology companies as well as a thriving start-up community. 20% of final demand for goods and services for the entire digital sector – comprising the digital producing segment plus the final demand of goods and services – is exported, according to a techUK report.

Skill and talent The UK digital sector is reliant on global talent. Up to 18% of the tech sector’s three million employees are foreign-born, with a third of them from EU countries. Foreign-born workers in the tech sector accounted for 45% of net employment growth between 2009 and 2015. Therefore, Brexit risks the provision of access to necessary tech skills by disrupting, or arguably wrecking, an essential talent pipeline. Tech policy specialists believe the UK government’s recently published migration White Paper offers precious little reassurance that technology companies will easily be able to secure talent under the existing visa regime.

Data The UK digital market relies on the free flow of data across borders. The flow of data and information is what drives economies around the world. But Brexit arguably puts this at risk by fragmenting the regulatory certainty that currently exists between the UK and its largest trading partner for data flows. Businesses depend on such data flows to get access to markets, and create effective, friction-free supply chains. The biggest challenge to cross-border data flows is the impact of Brexit on the protection of personal privacy law as enshrined in the EU’s General Data Protection Regulation (GDPR) which came into force in May 2018. The UK is likely to maintain its own data protection regulations identical to the EU’s, for reasons of continuity and market access, but that does not guarantee a secure legal base from which data can be transferred into and out of the EU. That relies on an “adequacy” decision by the EU that applies to ‘third countries’, which the UK will become when it leaves the EU on March 29. An “adequacy” decision determines that a third country offers an equivalent level of protection compared to the provisions in EU law. It would require a full review by the EU of the UK’s data protection regime. Given the closeness with which the UK and EU data protection regimes currently operate, an “adequacy” agreement might reasonably be expected, though the process would take at least a year. However, as part of its review, the EU will also consider the UK’s strong surveillance culture, in particular, the 2016 Investigatory Powers Act.




Investment The UK tech sector has been a magnet for inward investment. According to Tech Nation, the UK was in the top three countries for total capital invested in digital tech companies from September 2016 to August 2017, behind only the US and China. Total investment and the number of deals involving digital tech companies has risen significantly since 2012. Undoubtedly a key driver for investment has been the UK’s membership of the EU. The question is whether, following Brexit, other European centers will in future receive investment that would previously have defaulted to the UK, either in venture capital (VC) funding, or in intra-company investment to the UK. In 2016 the UK secured £6.8bn in VC and private equity digital tech investment – 50% more than any other European country.

Innovation Innovation comes from people and the Single Market has allowed European talent to flow to the UK. There were 552,600 foreign-born workers in the digital sectors in 2015, with a third of them from the EU. Since 2017, there have been signs that top tech talent from around the world was starting to question if coming to the UK was their best bet and whether, in light of public attitudes to immigration demonstrated during and after the EU referendum, they might be more welcome in other European digital sectors that have either sought to capitalize on Brexit or, as a result of the simple fact that they are part of the EU, have attracted business and start-ups from the UK who fear loss of EU market access.

A 2017 Deloitte report revealed that 36% of non-British workers currently in the country say they are thinking about leaving by 2022. Highly skilled workers from EU countries are the most likely to consider leaving, with 47% thinking about leaving for opportunities elsewhere in the next five years. That does not mean London, Cambridge or other UK centers will suddenly become unattractive and the government has insisted it is open to global talent from everywhere and not just the EU. However, if international competition for digital talent intensifies and other leading European cities such as Berlin, Amsterdam, Vienna, Dublin or Lisbon start to become the go-to destination for young international talent as the UK’s access to the EU single market disappears, there may be a consequent risk to the UK’s position as an innovation hotbed.

Source: GlobalData

Current State: Regulatory concerns The table below highlights the key regulatory concerns arising from the current Brexit situation.


Brexit regulation

The UK’s withdrawal from the EU will have regulatory impact across the board, covering access to the Single Market and Customs Union, the Digital Single Market, freedom of movement of people, goods and services, and implications for the flow of data and data protection. Although the initial concerns are in the event of a ‘No Deal’ Brexit, there are still issues to be considered in the event of other developments, such as a decision to remain in the Single Market, or more likely, a Customs Union. The rejection of Theresa May’s deal on January 15 itself put at risk the relative certainty of having a transition period in place in which much regulation would remain the same until the end of 2020. An extension of Article 50 to July 2019 has been mooted, with Chancellor of the Exchequer Philip Hammond said to have reassured business leaders that the threat of ‘No Deal’ could be taken off the table and Article 50, which triggered the process of Britain leaving the EU, could be rescinded.




Staffing concerns

As well as impacting the flow of talent to technology companies, the ending of Freedom of Movement will have implications for the supply of people for the delivery of service contracts. WTO/General Agreement on Tariffs and Trade rules place limitations on how long a company can move someone overseas to facilitate servicing a contract. That has implications for the length of contracts that UK companies can offer compared to European competitors. A five-year deal from an EU-based company is likely to be more attractive than a UK one. There are also staffing concerns for the telecommunications sector in fulfilling its UK full-fiber rollout. The program could take 15 years and would typically use EU workers, notably Spanish, Portuguese or Eastern European, who have already completed their own full-fiber rollouts. If the supply of workers is limited, then there is a possibility that the rollout will be delayed.

Data regulation concerns

There are three areas of interest in terms of data. Firstly, UK to EU data transfers based on the UK incorporating GDPR into UK law. Secondly, EU to UK data transfer, which is again covered by GDPR and this is an area at risk of considerable friction. Thirdly, there is the issue of third country data transfers. The EU currently has relationships with the US – under the Privacy Shield – and an adequacy agreement with separate countries such as Argentina. If the UK is no longer in the EU, then it will need to conclude its own agreements. (i.e. after Brexit, it would no longer have an adequacy agreement with Argentina and would need to conclude one). The US is anecdotally regarded as not liking GDPR, but it is still unlikely that, in order to pursue a future trade deal with the US, the UK would decide not to continue with GDPR. Data policy specialists argue that GDPR now has global reach. Any company – including a US one - trading with the EU will have to comply with GDPR, so it does not make much sense for the UK to do anything different to applying GDPR. A significant concern is the likely loss of the UK Information Commissioner’s seat on the EU Data Protection Board (EUDPD) as a result of the UK’s departure from the EU. That means the UK’s data protection influence at the highest level risks being markedly diminished, with the EUDPD likely to set the weather when it comes to standards for technologies like AI and regulating big tech, while the Information Commissioner’s Office (ICO), the UK’s national data protection authority, becomes a “less influential regulator”, regulating the law but not at the leading edge of interpreting GDPR.

Single Market concerns

Two industries at clear risk from regulation issues as the UK leaves the EU are the television and space sectors. The EU Audio-Visual Media Services Directive creates a common area for broadcasters. It also enshrines a Country of Origin (COO) principle. Following Brexit, television companies which currently have a license from the UK’s regulator, Ofcom, to be able to broadcast to EU markets will find that license is no longer valid. That means broadcasters will need to re-license in other EU countries by March 29. The Discovery Channel, for example, has just announced it will apply for new licenses in the Netherlands, rather than the UK.

The well-publicized problem for UK space companies is that they will no longer be able to bid for EU contracts based around the secure signal for the EU’s Galileo satellite system.

Movement of goods concerns

As well as potential issues with new customs processes and documentation as a result of leaving the Customs Union, another issue for technology companies is product testing. If you make an electronic device, such as a phone, it has to be CE (Consumer Electronics) marked for product safety. You can currently test in the UK and if the UK test center says it is safe, then the device is marked as safe and can be sold across Europe. Once the UK leaves the EU, a device destined for the EU will need to be tested in the EU. That has implications for manufacturing. Why make something in the UK if you are going to have to send it to the EU to be tested? It might as well be made in the EU.

Source: GlobalData



‘Hard Brexit’ situation: Macroeconomic concerns The table below highlights the key macroeconomic concerns arising from a ‘hard Brexit’. Several of these concerns would also apply in other flavors of Brexit: May’s Deal and Customs Union.


‘No Deal’ concerns

If the UK is heading for a ‘No Deal’, or ‘Hard Brexit’, from the EU then a number of issues come into close focus. The technology industry increasingly underpins a significant part of the UK economy, with tech companies closely integrated into the supply chains of sectors from healthcare to financial services. As the techUK group points out, it means the impact of ‘No Deal’ on these sectors will also be felt by the tech companies serving those sectors. In many ways, the biggest unknown for many in the sector will be what happens to their clients in the event of a ‘No Deal’.

Data protection Data is the cornerstone and currency of modern communications. Today, digital information travels freely within the European Economic Area, thanks to shared standards of privacy and protection. As a member of the EU, the UK is currently part of the EU’s data protection framework, which places restrictions on the transfer of data outside the bloc as well as ensuring that data can flow freely within it. Personal data can only be transferred from the EU to ‘third countries’ – which the UK will become after it leaves the EU – if the country has received an ‘adequacy’ decision from the European Commission (EC) following an assessment of its domestic data protection law. The UK has also fully implemented EU data protection laws, namely the GDPR, through its own Data Protection Act 2018.

The Government has published plans for technical amendments to this legislation to ensure it continues to apply in the UK in the event of ‘No Deal’ with the EU, so such an outcome would not change the way in which companies have to handle personal data. However, ‘No Deal’ means the UK would become a full ‘third country’ and therefore no longer automatically deemed a suitable place for EU data to be sent. There will not be time for adequacy assessments to be completed by March 29, 2019 – and they can only start anyway after the UK leaves the EU. The fastest EU agreement – with Argentina – took 18 months to complete. Businesses would not be able to transfer personal data to the UK without additional legal mechanisms in place. Typically, this would require the adoption of standard contractual clauses. Organizations have started sifting through existing contracts to identify where they might need to insert these clauses, but this takes time and incurs significant costs. There may be an impact on the UK’s competitiveness in dealing with EU businesses due to the lack of a strong legal basis for the free flow of data.

People With freedom of movement coming to a sudden end, there will be concerns about citizens’ rights and what happens with future immigration systems. The UK government has said that, in the event of a ‘No Deal’, it will protect the rights of EU citizens already living in the UK and offer a clear route to UK citizenship through a settled status scheme. Although no blanket guarantee has been provided to UK citizens in EU member states, individual states have begun to provide guarantees.

Two EU states, Poland and the Czech Republic, have said they are preparing emergency laws to allow Britons to stay to work in the two countries in the event of a ‘No Deal’ Brexit.

The Czech Republic’s draft law will mean an estimated 8,000 Britons living in the country will be exempt from normal immigration laws until the end of December 2020.

A similar Polish law will allow an estimated 6,000 Britons to stay in the country for a year without having to change their status to immigrants from a third country.

The draft Czech and Polish laws came after authorities in Germany, France, Italy and the Netherlands sought to give last-minute assurances to British nationals.




Future immigration

Alongside the immediate people issues around ‘No Deal’, with regards to future immigration, as a third country the UK would not have a specific relationship with the EU on migration. The issue of immigration is regarded as a member state competence and so each individual member state would have to make decisions on the requisite migration rules for UK citizens, both for personal and business reasons. The UK will also need to design a new immigration system to recognize the end of freedom of movement with the EU, which will no longer apply to UK citizens. The government has published an Immigration White Paper, which recommends moving the system for EU nationals to one broadly identical to that for non-EU nationals.

It is generally regarded that, being heavily reliant on the movement of people, this situation does not work for the UK tech industry, which is already said to be facing a major skills shortage which threatens to limit the growth of the sector. The consensus is that putting more hurdles in the way of companies attracting skills and talent into the UK does nothing to make the UK an attractive place for tech, or enhance the industry’s future prospects.

Contract servicing

The ability of UK companies to service their contracts in the EU may be put at risk by a ‘No Deal’ situation affecting the ability of staff to travel. An example might be a UK member of staff travelling to an EU state to set up a data center.

Were the UK to leave the EU without a deal, it will fall under the remit of different countries’ commitments under the WTO’s General Agreement on Trade in Services (GATS). The EU Schedule says that, where ‘Mode 4’ delivery is concerned (i.e. travelling to another country but not establishing a ‘business entity’ there), travel will only be permitted for three months in any 12, or for the duration of the contract, whichever is longer.

It means that offering a contract longer than three months from the UK to an EU client would be difficult to do without establishing a business branch. In an alternative overarching agreement, such as a free trade deal, the period is still limited to only 12 months, which appears to make it hard for UK businesses to be able to offer long contract terms to compete with rivals in European member states who could service those contracts much more easily.




Impact on customs

The impact of ‘No Deal’ on UK customs measures will be felt immediately by both businesses and consumers. With no customs agreement in place, there is the risk of disruption for tech businesses trying to bring goods into the UK from EU countries. If the UK left the EU on 29 March 2019 without a deal, there would be immediate changes to the procedures that apply to UK businesses trading with the EU. It would mean that the free circulation and movements of goods between the UK and EU would end. Given this scenario, organizations are starting to stockpile goods to avoid shortages. That includes technology companies who are trying to ensure that they have sufficient spare parts at hand. However, businesses are unlikely to know what products or parts they might need to get into the country in a hurry.

HM Revenue & Customs (HMRC) has been developing new IT systems to facilitate customs processes for Brexit and its progress in delivering its Customs Declarations Service (CDS) is under continual scrutiny. CDS, which replaces the existing and, in IT terms, venerable Customs Handling of Import and Export Freight (CHIEF) system, is being phased in gradually and has started with a small group of businesses who make certain types of supplementary declarations. The number of businesses making declarations to CDS will grow over the coming months, with remaining importers able to use CDS from early 2019. The export function of CDS will be delivered in March 2019.

Two other developments are also significant. In the event of ‘No Deal’ the UK would no longer participate in the EU’s value added tax (VAT) area, which will require businesses to register with HMRC in order to comply with VAT requirements, as well as registering for the EU VAT Refunds Scheme via individual EU tax authorities. This may have an impact on those selling goods via ecommerce platforms, as they will have to take steps to ensure they are VAT registered in multiple jurisdictions.

Another key area for technology companies is that the UK will no longer be part of mutual recognition schemes, such as CE marking. In the event of ‘No Deal’, although the UK government has indicated it would unilaterally accept goods from the EU with a relevant mark, including goods already on the market, the same situation will not apply for exports from the UK to the EU. Businesses would have to re-register goods that were approved in the UK in an EU country in order to continue to have their mark recognised in the EU.

Single market access

It is possible for non-EU countries to access the EU’s Single Market, but that access depends on the model adopted and on the rules and regulations applicable to that model. Two of the best-known models are the Norway and Canada models, which offer varying levels of access. However, in the case of ‘No Deal’, there would be no UK-EU trade agreement guaranteeing access to the EU Single Market. Whatever access to the Single Market is possible would then depend on to what extent the UK government diverges from the current rules and regulations, particularly around digital policy areas. It will be more difficult for UK firms to do business in the EU if there is significant divergence, especially if they have to comply with two sets of rules for different markets. Such a situation would inevitably favor larger organizations over smaller ones and might leave the smaller organizations with a dilemma over which market they would prefer – and could afford – to access.

Another key development is that in the event of a ‘No Deal’, the UK will immediately lose access to all shared EU databases and processes. A key one for the tech sector is the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) database. The UK has indicated it would maintain the REACH regulation and set up a separate UK registration system which will be similar to the EU system.




Investment A possible impact of a ‘No Deal’ scenario will be the risk of business confidence draining away from the UK, at least in the short term, until the outlook for the business landscape becomes clearer. There has already been anecdotal evidence of large multinational companies sitting on their hands as far as UK investment is concerned until there is greater clarity of what Britain’s exit from the EU looks like.

One of the key impacts of a ‘No Deal’ – if it goes ahead – will be the inability of UK businesses to benefit from EU funding programs, such as Horizon 2020 (a major research and innovation project which offers €80bn of funding between 2014 and 2020). The government has said it will guarantee funding for Horizon 2020 bids but the tech community will need details around how funding allocated to UK consortia will operate.

A further ‘No Deal’ impact will see the end of European Investment Fund (EIF) backing. EIF funding is a key source of investment for UK start-ups, with between 30% and 40% of all VC funds operating in the UK containing EIF money. ‘No Deal’ is likely to mean there will be a squeeze on access to EIF backing for VC funds which, in turn, will lead to reduced money for the sector. It has already been suggested that the level of EIF funding has been reducing following the triggering of Article 50, a palpable sign of how Brexit is already impacting the tech sector.

Innovation If the flow of EU funding for the tech sector is reduced, it will have a knock-on effect on the VC funds supported, and consequently on the start-ups that rely on that VC funding. Less VC funding means the possibility of fewer start-ups being backed and that, allied to concerns about skills and uncertainty over the data landscape, could have a negative impact on the innovation that drives the tech sector. The UK government has signaled that the British Business Bank could replace EIF money, but the EIF has a strong reputation in the tech community and its involvement opens the door to more funding. It is estimated it will take a British Business Bank up to 10 years to build up the same track record as the EIF. An important factor is that the EIF is not regarded as a ‘lender of last resort.’ Companies looking for of investment would typically go to the EIF and, if funding was forthcoming, then the EIF being on board means those seeking funding can use the EIF’s support as reassurance for other VCs and angel investors. The British Business Bank tends to work the opposite way so, if you have a shortfall, you can go to the Bank to make up the shortfall. The long-term likelihood is that, if EIF funding falls and the British Business Bank is supposed to replace it, then the Bank’s processes will have to change.

Source: GlobalData



Further reading GlobalData reports

Brexit and the impact on retail (December 10, 2018)

Brexit and the Healthcare Industry – Implications for Pharma, Q3 2018 (November 2018)

Brexit and the Healthcare Industry – Implications for Pharma Q2 2018 (August 2018)

Brexit and the Healthcare Industry – Implications for Pharma, Q1 2018 (May 2018)

Brexit’s Implications for the UK Pharmaceutical Sector (December 2017)

Acknowledgements Thank you to the following for their advice and help in compiling this report: Giles Derrington, Head of Policy: Brexit, International and Economics, techUK; Matthew Evans, chief executive of the Broadband Stakeholder Group; Shane Nolan, SVP Technology, Consumer & Business Services at IDA Ireland; Daniel Stephens, UK Trade and Invest; Jeegar Kakkad, chief economist & director of policy, ADS Group.

https://consumer.globaldata.com/Analysis/details/thematic-research-brexit-and-the-impact-on-retail

https://pharma.globaldata.com/Analysis/TableOfContents/Brexit-and-the-Healthcare-Industry---Implications-for-Pharma--Q3-2018



https://pharma.globaldata.com/Analysis/TableOfContents/Brexit-s-Implications-for-the-UK-Pharmaceutical-Sector



Appendix: Our thematic research methodology Companies that invest in the right themes become success stories. Those that miss the important themes in their industry end up as failures.

Viewing the world’s data by themes makes it easier to make important decisions GlobalData’s thematic research ecosystem is a single, integrated global research platform that provides an easy-to-use framework for tracking all themes across all companies in all sectors. It has a proven track record of identifying the important themes early, enabling companies to make the right investments ahead of the competition, and secure that all-important competitive advantage.

Traditional research does a poor job of picking winners and losers The difficulty in picking tomorrow’s winners and losers in any industry arises from the sheer number of technology cycles – and other themes – that are in full swing right now. Companies are impacted by multiple themes that frequently conflict with one another. What is needed is an effective methodology that reflects, understands and reconciles these conflicts.

That is why we developed our “thematic engine” At GlobalData, we have developed a unique thematic methodology for ranking technology, media and telecom (TMT) companies based on their relative strength in the big investment themes that are impacting their industries. Our thematic engine identifies which companies are best placed to succeed in a future filled with multiple disruptive threats.

To do this, we rate the performance of the top 600 TMT companies against the 50 most important themes impacting those companies, generating 30,000 thematic scores. The algorithms in GlobalData’s thematic engine help to identify the longer-term winners and losers within the TMT sector.

How do we create our sector scorecards? First, we split the global TMT industry into 15 sectors. Second, we identify and rank the top 10 themes for each sector (these can be technology themes, macroeconomic themes or regulatory themes). Third, we publish in-depth research on specific themes, identifying the winners and losers. The problem is that companies are exposed to multiple investment themes and the relative importance of specific themes can fluctuate.

So, our fourth step is to create a thematic screen for each sector to calculate overall leadership rankings after taking account of all themes impacting that sector.

Finally, to give a crystal clear picture, we combine this thematic screen with valuation and risk screens to generate a sector scorecard used to help assess overall winners and losers.

Our five-step approach for generating a sector scorecard

Source: GlobalData

Sectors Themes Research Thematic screen Sector scorecard

1. Split the global TMT 2. Identify and rank the 3. Identify and score tech 4. Calculate overall 5. Determine leading companiessector into 18 subsectors. top 10 themes driving leaders and challengers thematic rankings for in each sector using our three

earnings for each sector. for each theme. all companies in a sector. screens.

Sector Scorecard =

Thematic screen+

Valuation screen+

Risk Screen

HardwareSemiconductorsServers, storage, networkingTelecom equipment Consumer electronicsComponent makersIndustrial automationSoftwareApplication softwareInfrastructure softwareSecurity softwareVideo games softwareIT servicesInternet & MediaE-commerceSocial mediaAdvertisingMusic, film and televisionPublishingTelecomsTelecom operatorsCable operators

2. Cloud

3. Blockchain

1. Voice

10. Internet of Things



What is in our sector scorecards? Our sector scorecards help us determine which companies are best positioned for a future filled with disruptive threats. Each sector scorecard has three screens:

The thematic screen tells us who are the overall technology leaders in the 10 themes that matter most, based on our thematic engine;

The valuation screen tells us whether publicly listed players appear cheap or expensive relative to their peers, based on consensus forecasts from investment analysts; and

The risk screen tells us who the riskiest players in each industry are, based on our assessment of four risk categories: corporate governance risk, accounting risk, technology risk and political risk.

How do we score companies in our thematic screen? Our thematic screen ranks companies within a sector on the basis of overall technology leadership in the 10 themes that matter most to their industry, generating a leading indicator of future earnings growth.

Thematic scores predict the future, not the past.

Our thematic scores are based on our analysts’ assessment of their competitive position in relation to a theme, on a scale of 1 to 5:

1. Vulnerable: The company’s activity with regards to this theme will be highly detrimental to its future performance.

2. Follower: The company’s activity with regards to this theme will be detrimental to its future performance.

3. Neutral: The company’s activity with regards to this theme will have a negligible impact on the company’s future performance, or this theme is not currently relevant for this company.

4. Leader: The company is a market leader in this theme. The company’s activity with regards to this theme will improve its future performance.

5. Dominant: The company is a dominant player in this theme. The company’s activity with regards to this theme will significantly improve its future performance.

How our research reports fit into our overall thematic research ecosystem Our thematic research ecosystem is designed to assess the impact of all major themes on the leading companies in the TMT sector. To do this, we produce three tiers of thematic reports:

Single Theme: These reports offer in-depth research into a specific theme (e.g. artificial intelligence). They identify winners and losers based on technology leadership, market position and other factors.

Multi-Theme: These reports cover all companies and all themes within the TMT sector. There are two types: one is organized by sector; the other is organized by theme.

Sector Scorecard: These reports identify those companies most likely to succeed in a world filled with disruptive threats. They incorporate our thematic screen to show how conflicting themes interact with one another, as a well as our valuation and risk screens.



About GlobalData

4,000 of the world’s largest companies make better and more timely decisions thanks to our unique data, expert analysis and innovative solutions delivered through a single platform.

GlobalData is one of the world’s leading providers of company operational data and strategic analysis, providing detailed information on tens of thousands of companies globally. Our highly qualified team of Analysts, Researchers, and Solution Consultants use proprietary data sources and various tools and techniques to gather, analyze and represent the latest and the most reliable information essential for businesses to sustain a competitive edge. Data is continuously updated and revised by large teams of research experts, so that it always reflects the latest events and information. With a large dedicated research and analysis capability, GlobalData employs rigorous primary and secondary research techniques in developing unique data sets and research material for this series and its other reports. GlobalData offers comprehensive geographic coverage across world’s most important sectors, focusing particularly on energy and healthcare.

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The data and analysis within this report is driven by GlobalData from its own primary and secondary research of public and proprietary sources and does not necessarily represent the views of the company (or companies) covered.

The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that GlobalData delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such GlobalData can accept no liability whatsoever for actions taken based on any information that may subsequently prove to be incorrect.

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Brexit’s impact on global tech 23 January 2019 · Brexit will impact people, politics, economics, and business Brexit – the term used to refer to the UK’s planned departure