A fight for industry

In June 2016, the UK will vote on whether or not to remain in the European Union. The so-called Brexit Referendum, this game-changing choice leaves a great deal at stake for the country's science and engineering related industries. These sectors remain the backbone of the nation's economy and are a direct employer of 2.6 million workers, many of them highly skilled. Yet amid the economic tribulations of the Eurozone and the migrant crisis in which the EU is presently embroiled, public opinion of the EU has hardened and is now as "anti" as at any time since the 1980s. This publication attempts to cut through the politics and place the focus where it should be—on those industries that have a disproportionate amount to lose from the Brexit.

A consensus of qualified independent observers points to a short-term negative impact of 1.5% of GDP, and at present the long-term implications can only be guessed at. The position of the Sterling in the currency market is already reflecting this uncertainty, but so is Foreign Direct Investment. The science and engineering sectors depend on innovation and funding, and they are also Britain’s export engine—UK exports account for GBP 390 million. "45% of UK exports head to the EU, while less than 10% of EU exports go to the UK, odds which would hardly seem to put the island nation in a good negotiating position," commented Tim Longstaff, partner at Roland Berger.

Change in EU policy

Some engineering sectors have more at stake than others. Looking at export sales, ownership considerations, supply chain, and domestic demand, our study breaks down the most important issues across the automotive, aerospace and defense, electricity, chemicals and pharmaceuticals, and construction industries. Whether the final decision is to leave or to remain, Britain will need to take action to solidify its post-referendum future. Should they vote to remain, they must take the opportunity to press for change in EU policy. Should they vote to leave, however, there will be two main issues to address: pro-trade agreements, and regional disparities that could well serve as a catalyst for the break-up of the United Kingdom.