Originally published in Verdict.
The ongoing Brexit delays are generating considerable uncertainty for UK businesses, which is leading many to hold off on investing in technology while the future economic environment remains unclear.
This is according to research by Econocom, which found that 38% – more than a third – of UK businesses were delaying technology investment while Brexit delays continue.
“As the Brexit deadline is extended once again, many businesses remain in limbo when it comes to making important decisions that will affect their future,” said Chris Labrey – MD, Econocom UK & Ireland.
“This is especially true when it comes to investing in new technology – a critical part of business survival, whether that is devices for staff or servers to host data.”
Brexit delays see businesses ramp up risk mitigation
Ongoing parliamentary disagreements have seen the Brexit deadline shift multiple times. The original deadline of 29 March was initially pushed back to 12 April, but has now been extended to 31 October.
However, the UK will need to hold European Parliament elections in May – failing to do so will bring the deadline forward to 1 June.
While it is hoped that a deal will be secured by this time, the lack of progress so far makes the situation extremely uncertain, with repeated Brexit delays only adding to businesses concerns. As a result, many remain hesitant about committing to investment in areas such as technology –despite the potential damage this may have on their ability to compete.
“Many businesses see this as a compromise between mitigating risk and being able to carry on as usual, with our latest data demonstrating that over a third (38%) of UK businesses are reluctant to invest in technology due to Brexit,” said Labrey.
“But it shouldn’t be this way. Looking specifically at technology, there are approaches businesses can use that aren’t affected by the uncertain Brexit position we are currently held in. Subscription or ‘as-a-service’ models are effective in enabling organisations to get the technology they need to support them and drive them forward, when they need it – all while ensuring they don’t need CAPEX to pay for it.”
While avoiding investment during the Brexit delays may seem wise in the short term, for many it may ultimately prove to be the wrong choice.
“This is a prime example of why businesses need to maintain important areas of investment. Whilst government might be happy to remain in limbo and ponder on uncertain Brexit scenarios, businesses have to carry on; they don’t have the luxury of endless extensions on deadlines,” he added.
“It’s vital that the UK’s business economy continues to thrive and that objectives are met. There may never be a perfect time to invest in big ticket items, but when investment in technology enables progression and growth, a ‘sooner rather than later’ approach is wise. After all, who knows how long we’ll be waiting for a Brexit decision!”