Why UK SMEs have put the brakes on IT spend

It’s old news that Brexit will stir up an economic storm in the UK, whatever the outcome, but businesses may have stalled £27 billion (US$36 billion) worth of IT, digital and technology projects due to the wait on the outcome itself.

According to a report by Internet Service Provider (ISP) Beaming, 53 percent of small and medium-sized enterprises (SMEs) in the UK reported putting IT projects on the pause as the world awaits the outcome of Brexit. One-third of microbusinesses are also putting a halt on IT efforts.

The same survey revealed that that Brexit uncertainty is also seeing some 31 percent of companies in the UK shifting their IT gears down.

As much as 81 percent of technology companies, in particular, have stemmed investments. For contrast, the financial sector reported that 68 percent of their industry have cut expenditure, and 60 percent for the construction sector.

Co-founder and Chief Executive of social network busuu, Bernhard Niesner told The Guardian that Brexit is affecting future talent acquisition on top of dilemmas with its existing staff members, 50 percent of which are non-British.

Headquartered in London, Niesner quoted challenges with acquiring talent from overseas: “There’s so much uncertainty; you don’t really know what your future’s going to look like.”

As the world awaits a conclusion to the UK’s split from the European Union, businesses still need to run to stay connected and secured. With the brakes on spending and investments, SMEs in the UK are deeply affected.

Affected by the value of the pound, savvy UK tech companies may have also shifted their transactions with manufacturers and customers overseas since the business trend began declining in the UK.

That would add to the redirection of money outside of the UK economy, while the change in the business landscape may also push some enterprises to set up or move abroad entirely.

CEO of Plan A— an environmental, data-driven crowd-funding platform— Lubomila Jordanova spoke to Forbes about her difficult decision to start her company outside of the UK, where she originally intended, as a result of Brexit worries.

Instead, she moved the initiative to Berlin, telling Forbes; “Starting a business is uncertain enough.”