Since Friday, the UK, and indeed the world, has been absorbing what the decision of the UK to leave the European Union means for them. Given that the UK is a global hub for the communications industry, and London is a key operation for us, it is important to understand the implications for our clients, and for our business, both in the short and mid-term.
In the immediate aftermath there is clearly going to be huge instability both politically and financially. The Prime Minister has resigned, there are calls for the leader of the opposition to go and the place of Scotland in the United Kingdom is once again being questioned. The financial markets will remain unstable for some time. There will, no doubt, be some very scary headlines and predictions. Realistically, the instability is likely to last until it becomes clear what sort of relationship the UK will have with the EU for the long-term, and that will take at least 2 years, and most likely longer.
So what does this mean for our clients, particularly those in the pharmaceutical industry? From a regulatory perspective it has become significantly more complex. Pharmaceutical regulation will need to be part of the re-negotiations, but the UK will now need a separate review and approval process for pharmaceuticals. The UK is unlikely to be able to benefit from the efficiencies of the centralised procedure, and will need to invest in building a separate infrastructure. On the positive side, there still is a great deal of experience in the UK around the review of medicines, as the European Medicines Agency (EMA) has been based in London. On the negatives, the EMA will have to move to a member state, and the UK will now need to pay 100% of the cost of its review of medicines instead of a small proportion.
For drug companies, there will be additional regulatory processes for bringing new, innovative treatments to market in the UK. That means extra cost. The UK is likely to become a less attractive place to launch new medicines and the British may wait longer for new medicines to become available.
The EU’s investment in science disproportionately benefits the UK, particularly its universities. Whether a future British government maintains the same level of investment in science in future is not clear. We should all hope that any government would continue to ensure that the UK continues to punch above its weight in terms of scientific innovation.
The UK is an important location for the manufacture of pharmaceuticals. A weaker pound may help encourage this, although uncertainty around trade agreements, could have the opposite affect.
So what about the communications industry? The UK, and London in particular, has become a global hub for the communications and creative industries for a number of reasons. Perhaps the single most important reason is that there is a critical mass of talented people working in a stimulating and creative environment. Our ability to work in a single day across time zones from East-Asia to the West Coast of North America helps, as does the fact that English is the language of international business. EU membership has not been a major influence on the growth of the communications industry.
London will continue to be critical to the global communications and creative industries, and other hubs for areas such as digital technology in cities such as Edinburgh, Manchester and Brighton should also continue to thrive if companies focus on the right things.
Our business will thrive if we keep to our values of delivering high quality, innovative service to our clients, thinking about their needs and being one step ahead. In the short term we need to help our clients understand the implications of the decision and prepare for a new reality. We will be staying on top of potential regulatory changes and helping clients navigate those changes. Clients will need our research and insights-driven consulting, as well as internal communications and Government relations work.
There is a great deal that is unpredictable right now for our clients and our business. What is certain is that our clients are going to need our help understanding the evolving landscape and will continue to need the insights, thinking and creativity of our UK-based people as never before.