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EU-Exit for SME Decision Makers- January 2016


It is interesting to note that 65% of SME owners who vote for Labour and the Lib Dem party are of the idea that an EU exit will affect their ability to hire staff from the EU, while 55% of SMEs who vote for either the Conservatives or UKIP believe it will have no impact on their ability to import skills from abroad.

The Right Wing/Left Wing divide is quite fascinating as it corroborates to the already-founded theory that those who are left-leaning and liberal are more open to being a member of the EU and those who support UKIP or the Tories are slightly more negative.

According to Professor Simon Down, Deputy Dean for Research and Enterprise at the Anglia Ruskin University, "It's also interesting to see that the political views of SME decision makers are by and large quite conservative, which adheres to stereotypes surrounding business owners."


Third of entrepreneurs under the age of 35 believe an EU exit will have a negative effect on their customer relationships.

49% of young entrepreneurs thought that an EU exit would ultimately have a negative effect on their customers. This was not reflected in older entrepreneurs, where 52% of the over 55-year olds cohort and 45% of the 45-54 year olds said that a EU exit would have no effect on their business.

Today entrepreneurship is seen as a positive cultural and economic feature and the younger generation of entrepreneurs are seen as cultural heroes, which was not the case in the 60s, 70s and 80s. Professor Down claims that the younger generation are better educated and in a wider range of subjects such as business and technology. He does question, however, whether the young entrepreneur's views will change as they get older and says that it would be interesting to see if they assimilate with the old SME decision makers.

Small and Medium Enterprises

Professor Down argues that even though the two are "lumped" together under the heading SME, there is a crucial difference between the two as medium-sized businesses are stronger, more formal and more professional. Medium sized businesses require greater need for skills in different sectors and technologies. Since managerial staff in these companies have one to two specialisms, the skills they would be seeking are more refined and sophisticated.

Smaller businesses might not need to hire people from outside the UK as they get by with lack of resources or skills that are required to hire specialist workers from different nations. On the other hand, medium sized businesses have dedicated HR departments who will require a person with required skills independent of where they hail from and irrelevant of the costs and administrative procedures that need to be dealt with. Examples of these would be high-tech companies and biotech firms, which require honed-in skills that may not always be in high supply in Britain.

Regional Differences

29% of SME decision makers in the North East believe an EU-exit will decrease the general level of skill and ability of the workforce in their businesses. This is the highest in any region, with the West Midlands being the lowest with only 3% believing it will have a negative effect.

According to Professor Down, the North East has made positive use of EU grants based on economic development and regeneration projects and this reflects the views of the people in the area who think that the EU is important for further redistribution of wealth and regeneration.

SME decision makers in Scotland feel that a possible UK Exit would have a negative impact on staff skills as in Scotland there is a general positive view of the EU.

SMEs and voting in the EU referendum

The media in general will have the most profound effect, claims Professor Down in the voting of SMEs in the referendum. Since the government is also backtracking on his previous stance against the UK remaining part of the European Union, it is highly likely that all major companies including SMEs will follow suit and will back endorsed opinions.

Professor Down does not exclude that the Greek crisis, the instability of the Euro and the current migration issue will all play their part. He interestingly concludes that "evidence has shown that the perceptions of business owners are not necessarily the same as their business behaviours."