Changing trade patterns will create opportunities post-Brexit: EY Chief Economist Neil Gibson

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  • Businesses should tune out the noise arising from Brexit negotiations and approach the process with a positive mindset,  according to EY Chief Economist Neil Gibson.
     
    Mr Gibson was among the keynote speakers at the Institute for Small Business and Entrepreneurship (ISBE) conference which took place in the Europa Hotel. Speaking on the role borders play in a changing world, he urged business to “take the emotion out of it Brexit”.
     
    “It’s a decision that has been made - whatever you think about it - and it is going to change the rules of the game,” he says.
     
    “There are going to be winners and losers, but there will be winners as there always are in any shift in trade patterns. Businesses need to seek outopportunities amongst the confusion.”
     
    In agri-food, for example, producers in Northern Ireland may seek to ramp up production to replace goods previously imported from Europe, in particular
     
    “Things that we consume that may become more expensive under a tariff arrangement, if that's what we end up with. Somebody is going to have to produce goods locally where they were previously imported,” he says.
     
    At this stage, Brexit negotiations are shifting on a near daily basis so firms should avoid getting sucked into making snap decisions.
     
    “It is important to prepare for it, but not to make any rash decisions. Tune out all the noise - focus on the fundamentals and know your exposure,” he says.
     
    To understand a business’s exposure profile, managers should consider what suppliers may be exposed to, what legal documentation and what software might be needed and how to source talent post-Brexit. Firms should then produce a concise Brexit paper outlining areas which may affect the business and detail clear action points.
     
    “So if you bid for a tender, you can say to the buyer that I'm not going to be taken by surprise - I've thought this through,” he adds.
     
    But as a region, Northern Ireland will remain an important site location for international business.
     
    “There are some businesses for whom talent is in global short supply and they'll go where they can get the talent,” he says.
     
    “One of Northern Ireland's great feathers in its cap is that we have great universities, we are cost competitive for skilled labour, we are a safe place to invest - where you can get money in and out safely - and we’re well-connected in terms of airport access either through Dublin, Heathrow or Belfast. So it's a good place to continue to do business whatever happens with Brexit.”
     
    And while Brexit may lead to “a little bit of a delay in FDI”, global companies will not postpone decision-making indefinitely.
     
    “There is some delay in big capital investment, but global businesses deal with these sorts of challenges all the time,” he says.
     
    “Once they know the rules of the game, they will make the choices. We need to keep pushing on the things that are not Brexit-sensitive, of which talent would be one,” he says.
     
    Mr Gibson, a visiting Professor at Ulster University, says one of the immediate challenges is improving the overall quality of the debate around Brexit.
     
    “At the moment, there’s a very low trust environment,” he says.  
     
    Perceptions are skewed insofar as “people don't trust businesses and don't trust politicians - so we have to change that narrative,” he says.
     
    This places an onus on executives and comms managers to focus more on corporate social responsibility, on impact and the ‘hearts and minds’ piece beyond headline profitability growth or sales figures
     
    “People need to get a better feel for what a business does for an area,” he says.
     
    Supported by the Ulster University Business School (UUBS), Belfast City Council and the Federation for Small Business, the two-day ISBE conference was themed around hardening borders and “bordered thinking” post-Brexit.  
     
    For more information about ISBE log on to http://isbe.org.uk/

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