A new study into the “perceived negative impacts” of Brexit suggests that Britain’s departure from the European Union (EU) will hit innovative small and medium-sized enterprises (SMEs) harder than larger firms and corporations.
The research, which was published by the University of St Andrews, assessed the potential impact of Brexit on businesses of all shapes and sizes, drawing on information from a recent Government survey into the business attitudes of some 10,000 organisations.
It found that “economically important” small businesses – or those that push boundaries through innovation, or are predominantly export-oriented in their trade – are “particularly concerned” about Brexit.
It also found that innovative small firms operating in the tech and service industries were more likely to be adversely affected by “the perceived impact” of Britain’s departure from the EU than larger firms, or those in other sectors.
The study claimed that in the short-term, Brexit will lead to reduced access to external finance, lower levels of product development and reduced internationalisation of British businesses for such firms.
However, the university’s study cited “reduced capital investment” as the biggest potential challenge facing small businesses after Brexit.
Study leader Dr Ross Brown, said: “The results of our analysis suggest that Brexit-related concerns could result in a range of negative consequences for UK SMEs, especially the impact on reduced capital investment, which critically weakens and undermines their ability to grow and prosper.
“Most worryingly, these perceived negative impacts appear to be foremost in the minds of entrepreneurs and managers located in the types of innovative and export-oriented companies, which are often viewed as the high growth ‘superstars’ of tomorrow.
“In other words, SMEs thought to be the most significant for boosting productivity and economic growth may be the most negatively affected by Brexit,” he said.