Alex Shiel, Head of the IP and IT team at law firm, Ward Hadaway, and Jim Mawdsley, CEO at North East business support agency, Generator, discuss the potential impact of a no-deal Brexit on the North East’s tech sector in light of a recent announcement from Government.
It doesn’t take a genius to know that Brexit uncertainty and the potential of a no-deal situation come March 2019 has impacted UK economic growth.
Yet despite growth slowing to 1.3% this year as consumer spending falls and business investment decreases[1], there remains much to be positive about in the North East – particularly among businesses operating in our digital, creative and tech sectors.
From digital, IT and tech companies born out of the region like Scott Logic and eMerchantPay Ltd in this year’s Fastest 50 list, to those now operating on a truly global scale like Zerolight and Sage, we’re a region that’s buzzing with high growth, innovative companies as Jim Mawdsley, CEO at Generator, discusses:
“By 2020 the North East’s digital and IT sector is estimated to become a £2.5bn industry, and that’s something to be lauded if we are attract and retain the talent necessary to take our region’s growth and digital and tech reputation to the next level.”
Alex Shiel, Head of the IP and IT team at Ward Hadaway, added: “It’s clear we’re a region that’s bustling with high growth, innovative companies in the digital, IT and tech sectors and with the speed at which technologies are advancing, the need for tech companies to innovate and drive an advantage is greater than ever.”
However, the potential impact of a no-deal Brexit on our region’s celebrated creative, digital and tech industry – one of the fastest growing outside London – could pose a serious risk to one of our region’s fastest growing economic successes.
From the effects of limited access to talent and public procurement disruption, to supply chain issues and limited access to finance – there are numerous challenges to address.
Take the recent publication by the Government of a number of no-deal technical notices about the impact of Brexit on intellectual property rights, for example.
Alex, who helps clients to protect, develop and enforce their ideas and new technology, said:
“Businesses must be able to protect their Intellectual Property (IP). The technical notices provide some useful detail on the implications of a no-deal Brexit on the various EU wide intellectual property arrangements that the UK is currently party to covering patents, trademarks, designs and copyright.
“However they also leave large areas of uncertainty and gaps where businesses will need more information from Government before they can understand the implications for them.”
The Government states that it will ensure that the rights in all EU registered trademarks and Community registered designs will continue to be protected in the UK after Brexit by providing an equivalent registration in the UK.
“It is not clear however what costs or administrative steps businesses will incur in ensuring that their EU trade mark and design rights remain protected in the UK,” added Alex.
Most businesses in the digital, IT and creative sectors rely on copyright to protect their business ideas and products.
As the UK will no longer be part of the EU, the EU cross-border copyright mechanisms will cease to apply to the UK. This will affect the recognition of database rights, access to online content for UK nationals visiting the EU and the licencing of copyright through collective management organisations.
The status of the UK as a member of the unitary patent system, and the operation of the EEA exhaustion of rights system on the parallel import of goods from the UK to the EEA are also not yet settled.
In the absence of Government-supported infrastructure, how will our businesses, particularly start-ups and SMEs, overcome the sorts of challenges that a no-deal Brexit poses?”
Alex added: “They will need to assess how Brexit will affect their business model or IP rights and face incurring the time and cost of taking advice and adjusting how they operate their businesses, as well as some uncertainty as to how they will continue to be able to protect their IP when trading in the EU.”
Jim commented: “As providers of business support our advice would be to identify and mitigate the risks posed by Brexit, but the reality is, through no fault of their own, that many businesses simply don’t have the tools necessary to manage the risks they face.
“That’s something which, as a region, we need to address – not least because, with just six months to go before we leave the EU, two-thirds of businesses admit to not having prepared for it at all[2].”
“Our high growth businesses need to be agile and respond quickly to the changing demands of both their business and their customers. After March, this will become all the more challenging as more red tape and the potential for Brexit-related financial burdens increase.”
“As a region steeped in innovation with a willingness to share knowledge and ideas, it is up to us to come together under one voice and give our businesses the best chance of shining in the face of adversity, to emerge into a post-Brexit world as unscathed as possible,” concluded Jim.
To read the full supplement, click here.
- Alex Shiel is Head of the IP and IT team at Ward Hadaway. You can contact him on 0191 204 4296.
- Jim Mawdsley is CEO at Generator – one of the UK’s leading business support agencies for the creative digital, technology and music sectors.
[1] https://www.theguardian.com/business/2018/sep/10/economic-growth-rate-expected-slow-kpmg-report-brexit-uncertainty
[2] https://www.businesswest.co.uk/blog/british-firms-unprepared-no-deal-brexit