The United Kingdom's electronics industry expresses angst in the time of Brexit.
The UK electronics industry’s main concerns for doing business post-Brexit are continued free trade with Europe, access to skilled workers and collaboration on R&D with European Union companies, according to a survey by UK trade body the National Microelectronics Institute (NMI).
A small survey intended to provide a snapshot of NMI members’ key Brexit-related concerns revealed that 74% of respondents were worried about future lack of access to the European Union’s free trade market. Asked for comments on these concerns, many cited the potential for new customs and trade tariffs, as well as associated increases in red tape and paperwork for small and medium-sized enterprises (SMEs).
Next on the list of NMI members’ concerns was recruitment, with 65% of respondents concerned about reduced access to the EU’s pool of skills and labor. The NMI’s Chief Executive Derek Boyd points out that many of the UK’s leading electronics companies employ a wide variety of nationalities from the EU and beyond. The industry desperately needs the freedom to continue to recruit “from wherever talented people exist,” he says.
Recruitment concerns were closely followed by fears about collaboration on R&D with EU companies and access to EU funding.
“Losing access to those would be a blow for the industry,” Boyd says. “UK universities are one of the biggest recipients of [EU] Horizon 2020 grants. But it isn’t just about grants and funding — smaller UK companies may lose the opportunity to collaborate on R&D with the big players in the EU.”
On the other hand, this may present opportunities elsewhere. Boyd suggests there may be more scope for collaboration with US companies as UK ties with the US grow stronger. Whether this will happen, given the Trump administration’s “Buy American, Hire American” policy remains to be seen.
One thing that came up repeatedly in the NMI’s survey responses was uncertainty about the long term regulatory framework for products on the market in the UK and EU. Respondents expressed concern that the UK would no longer have influence over standards electronic products sold in the EU have to comply with, such as CE marking. To some extent, Boyd says, there are ways around this as the EU’s standards are typically based on recommendations from the industry.
“Standards are a major concern, but just because we’re not part of the EU, it doesn’t necessarily follow that we lose influence on standards setting bodies,” he says. “The door isn’t closed to European trade bodies — ourselves and other UK organisations are very active on these committees, and they could continue to accept UK input.”
For example, the NMI is a member of the European Semiconductor Industry Association (ESIA), the body which represents the interests of the industry in Brussels.
“Hopefully the industry can bypass the political side of it,” he adds. “Standards are fundamental to ongoing trade, and that works both ways, for both imports and exports. With the right government support, there are a lot of common interests in the industry for getting past these issues.”
The NMI is working with the Electronic Systems Council (ESCO), a council of the major electronics trade bodies that represents the UK industry to government. Their plan is to agree on clear statements of industry requirements that could be used in negotiations as the UK prepares to leave the EU.
“The political environment is changing very quickly, but we are trying to be proactive about developing agreed industry positions on certain issues,” Boyd says. “The first step was to agree the key areas, which we have done. Now we are developing position papers on those areas, which can be further developed or customised as required, then made available to government negotiators when the time comes.”
Overall in the industry, the mood is a balance between concern and pragmatism, Boyd says.
“People are waking up to the reality of the situation — we won’t be able to fight the decision [to leave the EU],” he says. “Brexit is going ahead, and we need to work to achieve the best we can within that context.”
—Sally Ward-Foxton is a London-based freelance journalist covering Europe's electronics industry for EE Times. She holds a masters' degree in electrical and electronic engineering from the University of Cambridge, UK.