Durham University Business School:Small companies are less likely to cope with the financial strain of Brexit
Dr Christos Tsinopoulos, an expert in Supply Chain at Durham University Business School, says:
“The pharmaceuticals industry, along with car manufacturing, is likely to be the most affected by the UK leaving the EU but big organisations will find a way to continue their success. Smaller companies are less likely to cope with the strain of Brexit.
“You can reasonably expect that the cost base for SMEs will go up. Countries outside of the European Union already have to pay the relevant taxes for doing business with EU members. These will be burdensome for smaller organisations in the UK.
“Small companies will struggle to absorb the costs of trading with EU members, and unless they have found a niche or a product customers really want they will find it difficult to operate successfully. Naturally, as businesses try and balance these increased costs, prices will rise and consumers will be the ones footing the bill, reducing market competitiveness. This has huge potential to hamper the growth of UK SMEs. Consumers will pay the price for any exit.
“If opportunities for SMEs stagnate it will have a knock on effect for the UK economy. If businesses are able to operate flexibly and think more creatively, they will be able to address any shortfalls in GDP. It is not necessarily about finding new markets but expanding on what British PLC does well.”