Three weeks on from the Brexit referendum a few thoughts from myself to also help explain Siemens’ relatively high media appearance since the vote. At two points we were trending high on the BBC news website.
In a visit to the UK last week, our global CEO, Joe Kaeser, reiterated our commitment to doing business in the UK and his hope that we can grow our business here, regardless of the outcome of the vote.
Some people have expressed surprise about this, given how vocal we were during the EU referendum campaign. But we were always clear that we were committed to the UK and while there will definitely be uncertainty ahead, my view is that there is no point looking back with regret. Instead, I think the right and responsible thing to do is be positive and work doubly hard to make the best possible success of the new situation.
I liken it to the tough times of 2008/2009, where businesses broke with the past and retained skilled employees to ensure they were better placed for the upturn when it came. Significantly that period also saw a new partnership emerge between business and government, with the latter recognizing that it could, and should, use the policy levers at its disposal to improve the business environment for sectors where the UK has or could have a comparative advantage.
This new style of ‘Industrial Strategy’ again becomes massively important during this post Brexit period of uncertainty. I therefore welcome last week’s announcement that BIS and DECC are to merge into a new government Department with an explicit remit to extend Industrial Strategy, under the leadership of Greg Clark MP. And this is one area where Siemens is keen to get involved and support the outcome.
In short, Brexit creates an even stronger imperative to get to grips with some of the issues that have been undermining the UK’s competitiveness and business environment for years. As part of this Industrial Strategy, I would like to see measures to boost productivity, as per some of the suggestions made by Sir Charlie Mayfield in his recent report on this subject. You can read more about this here
To support this, Investment in innovation and research is absolutely crucial as is creating a skills system that puts equal emphasis on high achievement in academic and vocational technical skills and through that drives a higher level of national ambition to be amongst the best in the world in our focus areas of the Industrial Strategy.
Finally, we have to end the chronic under investment and delays to infrastructure investment which have long bedeviled the UK. It was welcome and significant that the Chancellor has recently indicated that the government may be willing to take advantage of the current low cost of borrowing to invest more in infrastructure.
So productivity, innovation and infrastructure are key. It is my strong view that the length and depth of any Brexit fallout, will depend on how successful we are in tackling these three issues.
Dragging against these positive drivers will be the speed at which we can negotiate a new deal with the EU. At Siemens we hope a strong relationship will emerge, but we accept that it will take time. In my view, many remain far too optimistic about the speed at which this new relationship can be forged and indeed about the trading relationships with the rest of the world also. The negative and often inflammatory rhetoric against our neighbours during the campaign will take some time to heal and now requires massive diplomatic skill.
To summarise, we have to recognise and adjust to the new situation we find ourselves in, that there will be uncertainty probably for longer than many think, but we need to be optimistic that a good solution can be found, and whilst that is being worked on, we need much higher focus on driving productivity, innovation and infrastructure to help keep business confidence high. This isn’t a u-turn, it is responsible and common sense.