How internationalisation can affect your business
By purchasing manufacturers like Kuka, they do not only get a successful company, but also a very innovative one, leading in automation and excelling in preparation for Industry 4.0. Naturally, competition grows with internationalisation. Moreover, competitors can also change their location, and thus, become more attractive to customers abroad.
The insecurities European tool and mould makers have to face do not only come from Far Eastern economies. The European Union is deeply shaken inside its own borders. Even a day before the vote, hardly anyone expected Great Britain to leave the EU. As a first reaction, the stock market crashed. In the meantime, Europe has recovered from the shock, but we are far from a predictable European situation.
Stuart Hall, sales director at Epicor Software UK and Ireland, sees the biggest threat of the UK leaving the UK in the resulting incertitude: "Nothing kills you like uncertainty. It is true in business as it is in life - you're not going to hit targets by shooting in the dark. The UK's exit from the European Union brings great uncertainty. Europe is entering unchartered waters, and neither the European fleet, nor the breakaway British flotilla, has a map."
During the last weeks and months, the British future has become a little bit clearer. At the same time, the UK will not leave the EU for at least another two years. According to a recent survey by the Institute for Economic Research Ifo, German economists are not convinced that the schedule of the British government is realistic. They do not believe that the next two years will be sufficient for negotiating free trade agreements. According to the survey, only 21% considered it to be possible, the rest was uncertain.
Europe is shaken by political changes in the UK and US
Moreover, 2017 is an election year in some European countries, which could bring a wave of populism to the ruling parties in France, Germany and the Netherlands.
Speaking after the Prime Minister’s speech on her approach to Brexit negotiations, James Selka, the CEO of the British Manufacturing Technologies Association MTA, said: “While it is useful to have some clarity as to the future, we urgently need more details as to what our trading relationship with the EU might look like. We welcome the recognition that we need a comprehensive customs agreement and that trade should be as frictionless as possible. Advanced manufacturing, in the UK and Europe, depends on highly internationalised supply chains and leaving the Single Market raises many questions for our members. Any agreement must include the components and technologies that make up complex products and systems. We stand ready to help Government achieve those aims.” On the other hand, 63% of German economists believe that the future EU trade policy will be protectionist, the survey conducted by Ifo says.
One crucial factor in this insecurity does not only concern exports and imports but also the freedom of movement of employees. Many companies with subsidiaries in foreign countries employ specialists from their home countries in their foreign branches. For the employees, the freedom of movement is crucial, and thus it is crucial for their employers as well. Restricting entry and exit regulations can bring foreign subsidiaries to question.