All the uncertainty surrounding Britain's decision to leave the EU makes it difficult to decide upon how to best address Brexit risks. In this webcast, the Constellation research team uses the PESTEL framework to help you evaluate Brexit-driven risk so you may plan strategically for a post-Brexit EU. PESTEL assesses the political, economic, societal, technological, environmental and legislative trends influencing the business environment. 

Post Brexit Analysis with Constellation Research 062916 from Constellation Research on Vimeo.

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Highlights from the webcast: 

  • Britain will likely remain in the EU for two more years. Britain will remain in the EU until Article 50, which begins the formal withdrawal process, is passed. Article 50 states, "Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements". Current British Prime Minister, David Cameron, says he will not invoke Article 50, stating he will wait for his successor to implement the action. Once Article 50 is passed, political analysts estimate at least two years for the withdrawal process to conclude.  
  • Macro Planning Assumptions: Expect a weakened pound and overall economic slowdown for the next year. Finance, pharma, VC, tech may look to relocate to other locations within the EU. 
  • Use the PESTEL framework to assess global risks and opportunities
  • Future of Work:
    • Labor Market - Expect a rise in secondary labor costs in Britain and EU
    • Compliance - Uncertainty surrounding compliance until Britain formalizes sovereign compliance regulations
    • HCM Vendor Strategy -  HCM vendors will likely scale back investment in Britain
  • Tech Optimization/ Next Gen Apps:
    • Data Center 
      • Expect a halt in data center investment
      • Data centers will "follow the money" - As finance industry filters out of Britain, expect data centers to follow
      • Britain will likely lose its title as the data center hub of Europe
    • Technology labor cost will rise in Britain. Expect outsourcing to follow. 
    • Internet Autobahns
      • Direct connections between US/EU now more likely
      • Connection costs will rise as UK data privacy laws are renegotiated
    • Data Privacy
      • British privacy laws no longer covered by EU policies
      • British businesses need to examine Safe Harbor challenges


Questions & Answers:

Question 1: Should EU brands evaluate their providers for data and marketing automation?
Answer - thanks to Cindy Zhou, VP & Principal Analyst: 

I don’t see any need to re-evaluate marketing automation due to Brexit.  We'll need to wait and see if there are any changes in data management/privacy rules/regulation then configure their Marketing Automation accordingly.  That can be done independent of vendor. 

Question 2: When you say direct connections between US and EU seems smart, do you mean Ireland too?
Answer - thanks to Holger Mueller, VP & Principal Analyst: 

Yes, this includes Ireland, too. While Ireland is and will remain part of the EU, latency from Ireland to the EU mainland is an area to watch. If data security and privacy is not handled right, we may also see Ireland to EU under water cable connections.