A LOOK AT THE EFFECT THAT BREXIT IS LIKELY TO

HAVE ON BRITISH BUSINESSES, ESPECIALLY THE

AVERAGE LEATHER MANUFACTURERS IN THE UK.
 Abstract
Britain’s exit from the EU in 2020 has thrown the UK business world in front of several
issues while opening a door of opportunities. The opportunity mainly lies in access to free
trade in Non-European markets, while the issues are associated with reduction in sales, UK’s
export restrictions to the EU markets, workers shortage, and disruptions in supply chain.
Rising from this ground, this study aims to examine the effect Brexit is likely to have on the
UK businesses, especially on average leather manufacturers. In order to fulfil this aim, this
study will employ a secondary strategy following thematic analysis.

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 Table of Contents
1. Introduction, Research Trigger & Problem statement...........................................................4

2. Brief literature review............................................................................................................4

2.1 Potential effect of Brexit on UK business........................................................................4

2.2 Challenges for UK firms in the post-Brexit era................................................................5

2.3 Solutions to handle post-Brexit challenges......................................................................6

3. Research Methodology...........................................................................................................6

4. Data analysis and findings......................................................................................................8

5. Conclusion..............................................................................................................................8

6. References..............................................................................................................................9

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1. Introduction, Research Trigger & Problem statement

UK’s operations under the EU were limited to a single market containing approximately 28
countries including the UK. However, Britain’s exit from the EU in 2020 means the UK no
longer has free access to the European markets. Although this has created threat for UK-
based business with reduction in exports, disruption in supply and labour shortages,
especially for leather manufacturers (Harvard Business Review, 2019; Atkinson, 2022), UK-
based firms have witnessed improved access to Non-EU markets across the world. In such
circumstances, it is difficult to predict the future landscape for UK-based businesses in the
post-Brexit era. Being triggered by these circumstances, the problem of investigation
considered in this research is based on the potential effect of Brexit that UK businesses are
likely to experience, especially the leather manufacturers. Although existing studies have
shed light on the recent effect of Britain's exit from the UK, less studies have considered it
worth assessing the future business landscape. Considering this knowledge gap, this study
aims to investigate the possible effect of Brexit on UK businesses by keeping an eye on
average leather manufacturers. Rising from the ground cemented by this aim, this study will
be objectified:
● To investigate the future business scenario for UK-based firms in the post-brexit era,
with a focus on leather business
● To find out challenges that UK organisations may face in managing operations in the
post-Brexit era
● To suggest solutions that may help organisations to ensure business growth by
tackling Brexit-led-disruptions in operations

2. Brief literature review

2.1 Potential effect of Brexit on UK business

Brexit has thrown the UK business world in front of several issues while opening a door of
opportunities. In case of opportunities in the post-Brexit era, the articles by Zappettini (2019)
and BBC News (2022) have indicated that Brexit has allowed UK businesses to pursue their
independent trade deals, thus creating opportunities for free trade outside the EU areas. This
means that UK-based firms will no longer experience much restrictions in trade by EU
regulations. Alongside creating such opportunities, Brexit poses severe threats to UK
businesses in areas like disruptions in supply chain (IJtsma et al. 2018; Stone, 2021),

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reduction in exports and imports (Harvard Business Review, 2019), and labour shortages,
while increasing unit and labour costs.

Figure 1: Expected Impact of Brexit on UK business

(Source: Harvard Business Review, 2019)
According to figure 1. Brexit is likely to increase the unit and labour costs of business by
approximately 5.2% and 3.3%, while reducing sales by around 3% (Harvard Business
Review, 2019). Such decrease in sales has mainly resulted from reduction in UK-EU trade
after the Brexit. In the case of the leather business, leather manufacturers in the UK are under
extreme pressure due to a shortage of labour. Since the departure of around 190.000 UK
nationals from the UK after Brexit, UK businesses have been experiencing extreme labour
shortages (Atkinson, 2022). Although the demand flow of leather products in the UK is less
disrupted by Brexit, leather manufacturers are struggling to ensure sufficient supply due to
labour shortages (Bansal, 2022). In light of all these after-effects of Brexit, the future
landscape for UK business including the leather manufacturing industry will be full of
uncertainty, in terms of labour shortages, disruptions in supply chain, and new trade
regulations.

2.2 Challenges for UK firms in the post-Brexit era

Sustaining business in the post Brexit-era requires UK firms to carefully put each step
forward by assessing key challenges. The foremost challenge that firms will experience is

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keeping the flow of demand and supply equal. A study Sumption (2022) mentions that
Britain’s exit from the EU has led to migration of a huge number of workers from the UK to
EU. According to Atkinson (2022), the number is around 190.000. With such a shortage in
workers’ numbers, it will be difficult for UK businesses to increase production capacity and
cater to consumer demands. Moreover, increasing sales volume through exports is also
suggested as a key challenge, as Brexit has reduced access for UK business to European
Markets (Billing et al. 2021). Therefore, maintaining or increasing the sales volume with only
domestic sales will be difficult for UK firms.

2.3 Solutions to handle post-Brexit challenges

As labour shortage has appeared to be a key issue for UK businesses including leather
manufacturers, organisations need to focus on either recruiting workers from UK origins or
hiring people from Non-EU countries to fill the number gaps in the workforce (Sumption,
2022). Training should be offered to enhance new recruits’ competency according to
production demand and pressure. On the other hand, UK businesses should consider
exporting products to non-EU countries like markets in the Asia-pacific region. This may
allow them to overcome the loss of sales resulting from the Brexit-led disruptions.

3. Research Methodology

This study will mainly hold the Interpretivism philosophy throughout the data collection
procedures and knowledge development process. In doing so, the chosen research problem
will be explored in a subjective manner, considering circumstances that have led to the
development of the phenomena (Alharahsheh and Pius, 2020). The approach to be followed
to formulate the plan and procedures spanning from broad assumptions about the study
problem to detailed method of data collection, analysis, and interpretation is the Inductive
approach. Starting with an observation of the research phenomenon (problem statement
assumption), the data collection procedures will be initiated. During the data analysis
procedures, patterns underlying each content will be identified for leading the research to the
knowledge development stage [fig.2].

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 Observation of
research problem

Data collection

Identification of
patterns

Development of
knowledge

Figure 2: Steps to be followed for developing the research paper under Inductive
approach
(Source: Created by Learner)
Apart from philosophy and approach, this study will follow the descriptive design to
investigate the research problem based on available information and facts and describe it as
accurately as possible (Atmowardoyo, 2018). In light of all these methods, this research
completely relies on secondary data that will be qualitative in nature. Employing a
secondary data collection technique (e.g. Literature/document review), sources like ProQuest,
Google Scholar, and credible Internet sources (industry reports and media articles) containing
information about Brexit effect on UK businesses will be explored. Two of the foremost
inclusion criteria to be followed throughout the search process are articles that contain
information about the impact of Brexit only and articles that are published within 5 years.
The method to be employed for analysing research data is thematic analysis in order to
present a theme-based discussion qualifying the aim of this research. In doing so, the study
will follow a five-step process that includes data familiarisation, generation of codes,
development of themes, theme reviewing & naming, and Writing-up. Although this research
work will not consider the involvement of human participants, a key ethical aspect will be
considered to improve credibility of the work. This will be a follow-up of the rule of data
acknowledgement. In doing so, the study will acknowledge each data source to be reviewed
and used in the work by citing the surname of authors of those sources under Harvard
Referencing Conventions.

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4. Data analysis and findings

The overall business scenario in the post-Brexit era will be highly turbulent and uncertain for
UK-based organisations. A number of reasons are responsible for this situation. For example,
according to Brown et al. (2019), under the EU, UK’s operations were limited to a single EU-
regulated market. Although leaving the UK created a great opportunity for firms in the
country by opening the doors of other non-EU markets across the world, it damaged the
access for UK-businesses to EU markets (Billing et al. 2021). This means that UK businesses
are likely to witness various trade restrictions in the form of trade-related tariffs and non-
tariffs barriers, while aiming to trade with EU-regulated countries. However, the opportunity,
which lies in opening cross-border operations for UK firms with Non-European markets, will
allow organisations to improve their export volume in the coming future.
Apart from that, UK organisations like leather manufacturers or other manufacturing firms
are likely to experience poor production capacity and inability to fulfil consumer demand for
products. The report by Bansal (2022) makes it clear that leather manufacturers in the UK are
finding themselves quite incapable of meeting production demand due to worker shortages.
They have to either rely on UK workers or hire overseas staff from countries other than the
EU. Therefore, in such circumstances where Brexit has lent both positive and negative hands,
it is difficult to assert or predict the actual business landscape in the coming future for UK-
based firms.

5. Conclusion

Opening access to Non-EU markets by limiting the access to EU markets is the foremost
impact of Brexit on UK-based businesses. Although the flow of product demand is found to
be positive, businesses like leather manufacturers are struggling to ensure affluent supply due
to Brexit-led worker shortages. Organisations aiming to sustain their businesses must
consider relying on UK-based workers for now to manage the flow of supply & demand of
products. Moreover, overseas sales operations outside the EU markets should be taken as a
lease of survival in the post-brexit era, in terms of witnessing positive results from the
exporting operation.

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6. References

Alharahsheh, H. H., and Pius, A. (2020). A review of key paradigms: Positivism VS

interpretivism. Global Academic Journal of Humanities and Social Sciences, 2(3), pp.39-43.
Atkinson, A., (2022). UK Loses EU Nationals in a Year of Brexit and Pandemic Shocks.
Bloomberg. Available at: https://www.bloomberg.com/news/articles/2022-05-26/uk-loses-eu-
nationals-in-a-year-of-brexit-and-pandemic-shocks#:~:text=%E2%80%9CThe%20impact
%20of%20this%20on,earlier%20when%20almost%20260%2C000%20departed. [Accessed:
1 December 2022]
Atmowardoyo, H. (2018). Research methods in TEFL studies: Descriptive research, case
study, error analysis, and R & D. Journal of Language Teaching and Research, 9(1), pp.197-
204.
Bansal, R., (2022). 2023 Could be Even More Challenging in Post-Brexit UK. Texfash.
Available at: https://texfash.com/special/2023-could-be-even-more-challenging-in-post-
brexit-uk [Accessed: 1 December 2022]
BBC News, (2022). Brexit: What trade deals has the UK done so far? BBC News. Available
at: https://www.bbc.com/news/uk-47213842#:~:text=Since%20it%20left%20the
%20EU,0.2%25%20of%20total%20UK%20trade. [Accessed: 1 December 2022]
Billing, C., McCann, P., Ortega-Argilés, R., and Sevinc, D. (2021). UK analysts’ and policy-
makers’ perspectives on Brexit: challenges, priorities and opportunities for subnational
areas. Regional Studies, 55(9), 1571-1582.
Brown, R., Liñares-Zegarra, J., and Wilson, J. O. (2019). The (potential) impact of Brexit on
UK SMEs: regional evidence and public policy implications. Regional Studies, 53(5),
pp.761-770.
Harvard Business Review, (2019), Brexit Is Already Affecting UK Businesses — Here’s How.
Available at: https://hbr.org/2019/03/brexit-is-already-affecting-uk-businesses-heres-
how#:~:text=Firms%20expect%20Brexit%20to%20eventually,their%20sales%20by
%20around%203%25. [Accessed: 1 December 2022]
IJtsma, P., Levell, P., Los, B., and Timmer, M. P. (2018). The UK's Participation in Global
Value Chains and Its Implications for Post‐Brexit Trade Policy. Fiscal Studies, 39(4), pp.651-
683.
Stone, J., (2021). Brexit has worsened UK supply chain crisis, government’s spending
watchdog says. Independent. Available at:

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https://www.independent.co.uk/news/uk/politics/brexit-has-worsened-uk-supply-chain-crisis-
government-s-spending-watchdog-says-b1946394.html [Accessed: 1 December 2022]
Sumption, M. (2022). Shortages, high-demand occupations, and the post-Brexit UK
immigration system. Oxford Review of Economic Policy, 38(1), pp.97-111.
Zappettini, F. (2019). The official vision for ‘global Britain’: Brexit as rupture and continuity
between free trade, liberal internationalism and ‘values’. In Discourses of Brexit (pp. 140-
154). Routledge.

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