My take on... The Post-Brexit Digital Economy
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This week Rich Wood, managing director of Six & Flow (formerly Grain), gives his take on the post-Brexit digital economy...
I won’t lie. When I woke up on the 24th of June, reached for my phone and checked the results of the Brexit vote, I experienced a multitude of feelings, but mostly I was angry.
There was also some confusion. Over the past couple of years, I’ve seen hundreds of businesses spring up across the UK. I’ve seen them succeed, I’ve seen them fail, but I’ve seen (or possibly only perceived) an economy that was thriving and growing.
I understand now, with a great deal of hindsight, that how I view the European relationship isn’t necessarily the way it’s viewed by everyone. I benefit in ways others might not – and I get that. So once I’d thrown my toys out of the pram, I started to think about how we move our company forward.
Six & Flow is a small, 15-month old digital agency based in Manchester. We work with a range of clients, but most operate in the High Net Worth market, several of them in different investment and financial verticals. All of these companies are seeking an audience that earns a healthy disposable income.
Leading up to Brexit, we realised a leave vote would create an awful lot of uncertainty. Our target audience would be less inclined to invest and the overall market would slow down. In anticipation, we diversified into other High Net Worth verticals – fashion, insurance, the arts.
So, what’s happened since Brexit for us? Initially, it was a very painful couple of weeks.
One client, a software firm with a European development team, saw monthly development costs grow by £6,000 overnight, due to the falling Sterling. Two other clients, fairly new to the market at the time of Brexit, were forced to close shop as they simply couldn’t weather the storm.
Other client accounts saw costs per lead quadruple and lead volumes drop. Projects were delayed, and certain new clients were put on hold, as we didn’t want to pitch work we didn’t know we could deliver.
However, as those few weeks passed, the costs levelled out and the markets settled. So what now? There’s no Article 50 yet. There’s no clear exit strategy and no one knows what market access we’ll have on the other side. In a lemons to lemonade kind of way, these are the positives we’re taking from it now.
As far as European and American business is concerned, the fall in Sterling made us considerably cheaper. Weirdly, in this window between the vote and full blown divorce, it’s potentially made European business easier for us to obtain.
My take on... Recruitment ConsultantsThe clients we had to temporarily put in hold now appreciate our honesty. At the time, I felt guilty having gone through the pitching process to then say no. I felt like I was wasting their time. But in effect, saying no is sometimes a good thing.
The creative and digital industries are now booming, and considered a lynchpin to our post-Brexit economy according to Matt Hancock (Minister for Digital and Culture). A recent study by accountancy firm EY claims that, within the G20 group, the UK still has the best regulatory and tax environment for digital entrepreneurs. The UK is ranked second in terms of digital knowledge, and fourth for entrepreneurial culture. The opportunities and investment for digital and creative countries both on shore and overseas is going to grow, and that’s exciting.
So, to summarise. My view on the post-Brexit digital market, while initially grim and still something I’m not wholly comfortable with, has thrown up some new opportunities. It seems obvious that creative and digital industries are not only central to post-Brexit Britain, but also instrumental in the future of the global economy. We still have an important role to play, and now we’ve weathered the storm it’s time to build some alternative bridges.
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