The Technology, Media, and Telecommunications (TMT) sector is emerging as the most optimistic industry as Brexit negotiations intensify.
This confidence is underscored by a recent survey, showing TMT leaders believe in a positive outcome. The industry stands resilient, anticipating strategic growth amid challenges.
TMT’s Optimism Amidst Brexit Challenges
A newly conducted survey reveals that the Technology, Media, and Telecommunications (TMT) sector is leading in confidence as Brexit approaches. This optimism is surprising given the widespread apprehension about a potential ‘no deal’ Brexit outcome. It was highlighted just before an important EU Summit in Brussels, showcasing the resilience and forward-thinking nature of the TMT sector.
According to the YouGov survey, commissioned by RSM, the TMT sector’s confidence index surged from an average of 101 to 126. This figure places TMT at the forefront, outperforming manufacturing, financial services, and other key sectors. The technology revolution’s adaptability and strength seem to assure stakeholders, even amid political uncertainty.
Factors Behind TMT’s Upbeat Outlook
The latest index indicates that TMT’s short-term sentiment is the most consistently positive. With an average score of 128, it has overtaken manufacturing, which has slipped to second place. The consumer sector, on the other hand, is facing the toughest conditions, with an index score of only 94.
The survey encompassed over 300 UK leaders from mid-market companies, including 51 who belong to TMT. Astonishingly, 40 per cent of respondents believe that the UK Government will secure a favourable Brexit deal, which is double the number of those who lack such confidence.
Key Negotiation Priorities and Strategic Actions
Assuring EU citizens’ rights in the UK is the primary negotiation priority for the TMT sector, with 43 per cent of respondents identifying it as crucial.
Following closely is the retention of free movement for people (39 per cent) and securing access to the single market without full membership (31 per cent). The survey also identified strategic actions undertaken by TMT leaders, such as reviewing EU supplier contracts (41 per cent) and adjusting import/export duties with the EU (40 per cent).
In terms of outstanding actions required, TMT respondents highlighted the need to establish EU subsidiaries or branches (29 per cent). Further emphasis was placed on reviewing or modifying EU customer contracts (24 per cent), which is necessary to align with potential post-Brexit trade conditions.
Trade Model Preferences Among TMT Leaders
When considering preferred trade models post-Brexit, nearly half of the mid-market firms surveyed leaned towards the Canadian and Norwegian models. Both models earned 22 per cent favourability each, reflecting a desire for trade flexibility.
The Swiss model was chosen by 17 per cent of the participants, praised for its bilateral agreements that afford market access while maintaining national sovereignty. Interestingly, only a minor 6 per cent showed interest in Turkey’s customs union approach.
Overall, these preferences underscore TMT leaders’ strategic focus on maintaining beneficial trade relations with European partners.
TMT Sector’s Adaptability and Resilience
The ability of the TMT sector to navigate through economic and political shifts appears to hinge on its adaptability and innovation prowess. Despite inherent Brexit challenges, the sector is not only maintaining but growing its confidence levels.
David Blacher, RSM’s partner and national head of TMT, asserted, “Whilst the TMT sector is not impervious to political and economic volatility, these latest survey results are yet another illustration of a sector that continues to grow in confidence.” This sentiment reflects a belief in technology’s ability to offset potential Brexit-induced setbacks.
Conclusion of Key Insights
The survey further demonstrated that TMT leaders have been proactive. They have already adjusted immigration and employment legislation in anticipation of hiring EU nationals (42 per cent) and reviewed EU supplier contracts.
This approach highlights the sector’s strategic foresight, aiming to mitigate short-term disruptions and establish a stable foundation for post-Brexit growth. By staying agile, the TMT sector is positioning itself to handle the Brexit transition effectively.
Future Prospects and Strategic Measures
The anticipation of a feasible Brexit deal by the TMT sector is underpinned by strategic initiatives already in place. It underscores a forward-looking approach, aiming for continued growth amidst uncertainty.
The TMT sector’s optimistic stance ahead of Brexit is a testament to its strategic foresight and adaptability.
By implementing proactive measures, the sector positions itself for sustained success, regardless of political uncertainties.