Impact of Brexit on UK Businesses: Exports, Employment, and Foreign Investment

This paper examines the potential impact of Brexit on three key areas of UK business functioning: exports, employment and labor, and foreign investment. The decision to leave the European Union has raised concerns about the future of UK businesses, particularly in terms of trade barriers, labor shortages, and reduced foreign investment. The paper analyzes the potential consequences of these changes and explores the challenges and opportunities that UK businesses will face in the post-Brexit era.

Table of Contents
1. Explain three areas of business’s functioning that will affected by Britain
leaving the EU?.........................................................................................................3
2. Explain what failing businesses could do to increase productivity, sales or profit
by using social media?...............................................................................................5
3. Explain what effects climate change could have on global business?.................7
References.................................................................................................................9
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1. Explain three areas of business’s functioning that will affected by Britain leaving the
EU?
On June 23rd 2016, a revolution came in the history of Britain, when Britain decided to leave the
European Union. As a result, immediately after the decision was declared, the pound fell to its
minimum value since the year 1985. Till now, UK has been the number one choice of the
entrepreneurs and is often considered one of the best countries in the world to start the new
business. But the decision of Britain leaving the European Union could bring some unexpected
changes in the business’s functioning of UK.
There are many predictors whose predictions about the future business areas of Britain are
positive and who are in favor of Brexit. But there are also some of the predictors according to
whom the decision of leaving the European Union is the biggest mistake of Britain and this will
seriously affect the business conditions of UK.
Therefore, it is very important for Britain to understand how the Brexit will impact the
businesses in the UK and how it is going to maintain its economy after leaving the European
Union. Most of the companies who have invested large amount in the businesses of Britain are
fearful of the consequences of Brexit and are therefore reassessing their investments in Britain’s
businesses. Let us now take a look at some of the business’s functioning of Britain that will have
an impact of Brexit:
 Impact on the UK Exports: According to the reports, the amount of the goods exported to
the rest of the EU by Britain in the year 2015 was worth 133 billion pound and this amount is
almost equal to the half of the total goods that are exported globally. If there is no new trade
agreement between EU and Britain, then it is expected that Britain will have to bear a loss of
around 4.5 billion pound per year. As a result, the export businesses of UK will be greatly
affected as their costs will take a great hike. This will make the business market of Britain
less competitive across the globe. If the Britain decides to lower its prices, then it will have to
suffer lower profits. Therefore, it is expected that Brexit will lower the UK’s export business
by 8.8% approximately.
 Impact on Employment and Labor: According to the reports, the number of job seekers
looking for job outside Britain has increased tremendously after the decision of Britain
leaving the EU. The unemployment rate of Britain is expected to increase by the rate of 6.5
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% due to the recession conditions in UK. The current figure of European immigrants working
in UK is almost 2.1 million contributing a major amount to the unskilled labor market of UK.
If these EU immigrants leave the Britain, then there will a great demand for skilled workers
in UK (Milmo, 2016)
 Foreign Investment might reduce: According to the statistics and reports, the Brexit will
affect the FDI inflows negatively and will decrease by the rate of almost 22%. Being a part of
single market, UK has been the favorite market for the foreign investors but the decision of
Britain leaving the EU will result in the high costs of trade and tariffs that will result in the
less investment by the foreign market in the UK businesses (Market Inspector, 2017).
Source: https://www.market-inspector.co.uk/blog/2016/10/impact-of-brexit-on-businesses-in-
the-uk
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2. Explain what failing businesses could do to increase productivity, sales or profit by using
social media?
No one can imagine of the business without Internet today. And the use of social media by the
businesses has totally changed the perspective of how businesses interact, communicate and sell
their products and services to its customers. During recent times, the main objective of every
business used to be making profits and helping people with their needs. But today, businesses not
only need to fulfill the expectations of the customers but also need to be trendsetters in order to
become successful. Social media can help the failing businesses and the small businesses in
become the leaders and the trendsetters in the market. But the most important thing that a
business needs to understand is how the needs of people change with times and how to use social
media in order to increase the sales and boost the productivity of the business (Goldfield, 2011).
Therefore following strategies should be followed by failing businesses:
 Get Personal: Social media is the most genuine place for making loyal long term
engagements with the customers. The businesses can promote their products on various
social networks like Facebook, Twitter etc. and can also provide other product related
information. The businesses can also ask their customers to share their page with others in
order to make the customer more comfortable with the brand.
 Prioritize Customer Service: Most of the consumers today collect the information of the
brand from their feedback page on Facebook or twitter. Therefore, it is very important for
businesses to prevent the negative impact by quickly responding to all customer issues and
providing resolutions to them. Also, the businesses can boost their sales by sharing any
positive feedback from the customer across other social media channels (O’hara, 2015).
 Recognize the importance of mobile phones: Today, businesses need to understand the
increasing importance of mobile phones as well as the mobile purchasing power. Almost
85% of the transactions in America are made through mobile phones. The various sales app
on the various social media platforms like Facebook, Twitter provide promo codes, discount
coupons etc.
 Add your online store on Social Media Platforms: Now a day what small businesses could
do is to add their shopping cart directly with the Facebook page so that their customers don’t
have to leave the Facebook page for shopping. This method can be easily carried out through
any mobile device and will change the shopping experience of the customers.
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Therefore, by using the above mentioned strategies, failing businesses can make the proper use
of social media in order to increase the productivity and boost the sales and profit of their
organization.
Source: https://www.entrepreneur.com/article/244383
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3. Explain what effects climate change could have on global business?
The effects of climate change are already experienced by our planet earth. In future, the changes
occurring in climate is going to effect the functioning of businesses also. However, it is very
difficult to know exactly that how adversely businesses will be affected by the climate changes.
The health industry is getting affected by the changes occurring in the climate. Many countries
are facing the risk of diseases similar to malaria and dengue because of the unavailability of
clean water and food and increasing temperature. Insurance companies are going to get greatly
affected and suffer considerable loss as the storms are expected to increase in the future. Let us
now discuss few industries which will be greatly affected by changes occurring in climate. These
are:
Businesses having dependency on Water: Almost each and every business depends on water in
some way or other. But the most affected are the recreational boating industries or the businesses
doing commercial shipping in lakes and rivers. The increasing scarcity of water, droughts will
affect these businesses.
Tourism: The tourism industry also gets greatly affected by the climate changes. On one side, the
coastal tourism increases due to the hot and warmer months of summer. On the other hand, the
rising sea gives serious threats to the top tourist destinations including beaches (William, 2014).
Businesses based on Commodities: The businesses having dependency on commodities like food
products, oils and minerals have a great impact of the climate changes and have to change their
way of doing business due to this. For example, if a certain place has suffered from draught, then
the prices of the food products at that place certainly increases. Insufficient or excess rain can
affect the agricultural business and can result in the less fertile soil.
Therefore, from the above it can be said that climate changes affects almost every industry and
business. The effects of the climate changes are however unpredictable. For some industries,
climate change could bring positive impacts while it might have negative impact on the others.
Also, there are some businesses which do not have any effect of the climate change. Therefore, it
is required that the companies prepare themselves to face the changes that are going to take place
with the changes in the climate and adopt innovative strategies so as to overcome the challenges
caused due to climate changes. The long term business interests of the businesses gets seriously
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affected by the by the climate changes including increasing se level, increased flood rates, need
for more clean energy etc (Fontinelle, 2010).
.
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References
1. Fontinelle, E., 2010. 7 Ways Climate Change affects Companies. [Online] Investopedia.
Available at: https://www.investopedia.com/financial-edge/0210/7-ways-climate-change-
affects-companies.aspx [Accessed: 05 April 2018]
2. Goldfield, B., 2011. How Social Networks can boost productivity. [Online]
Enterpreneur. Available at: https://www.entrepreneur.com/article/219229 [Accessed: 01
April 2018]
3. Market Inspector, 2017. Impact of Brexit on the Businesses in UK. [Online] Market
Inspector Blog. Available at: https://www.market-inspector.co.uk/blog/2016/10/impact-
of-brexit-on-businesses-in-the-uk [Accessed: 05 April 2018]
4. Milmo, D., 2016. How will Brexit affect Britain’s trade with Europe. [Online] The
Guardian. Available at: https://www.theguardian.com/business/2016/jun/26/how-will-
brexit-affect-britains-trade-with-europe [Accessed: 04 April 2018]
5. O’hara, J., 2015. How your small businesses can use social media to boost sales. [Online]
Enterpreneur. Available at: https://www.entrepreneur.com/article/244383 [Accessed: 03
April 2018]
6. William, G., 2014. 3 Industries most likely to get affected by the climate change.
[Online] American Express. Available at: https://www.americanexpress.com/us/small-
business/openforum/articles/3-industries-most-likely-to-be-affected-by-climate-change/
[Accessed: 02 April 2018]
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