Most people felt the outcome of Brexit with U.K. voting to leave the E.U. would have a minimal impact outside its borders. Instead, financial markets, defence, technology, cyber security and privacy are affected because the U.K. is globally interconnected.
For decades, the 28-member European Union bloc acted as a single unit to make decisions and policy in many industries. Now, the U.K. will need to build individual relationships with countries like Canada. Geo-political events, like Brexit, do impact how business leaders think about technology, security and privacy. I cover three technology related lessons businesses can learn from Brexit.
1. "Open for Business" countries attract talent
The U.K., like other market economies has a shortage of highly skilled talent. Their open border relationship with the E.U. has allowed talented professionals to live and work in the U.K. and Europe. Currently, there are two million people with E.U. passports in the U.K. People currently travel freely between both countries.
Post-Brexit, the rules will likely change, making it harder for those two million E.U. professionals to stay in Europe if it means more red tape and higher costs. British citizens working in E.U. will likely face similar restrictions.
The devaluation of the British pound presents a strong argument for highly skilled professionals to look for better opportunities outside the U.K. Canadian and American companies may shift people and resources to Ireland, which already has good R&D infrastructure, tax breaks and talent.
Canada may benefit from an immigration inflow. BBC reported that Google Trends in late June showed Internet searches related to moving to Canada hit an all time high. Two big reasons are Brexit and Donald Trump's near-certain victory as the Republican U.S. presidential nominee. Canadian business regularly complains about the skills shortage. Brexit may offer Canada some of the best and brightest from the U.K. and the U.S. if they get strict on immigration.
2. Technology and social networks shapes public opinion
The Brexit result shows the growing influence of powerful social media companies influencing public opinion. Social media channels like Facebook, Snapchat and Twitter have an ability to create online bubbles because newsfeeds are a popular way people receive their information. Newsfeeds are based on content your friends and family consume.
Social media online newsfeeds like Facebook act more like filtered bubbles than diverse sets of opinions. People consume and share snippets and sound bytes with friends and family, who think alike. According to a Guardian article, Facebook persuaded publishers years ago to use the platform to publish their news. Engagement subsequently numbers dropped because people didn't want to be bombarded with news from third parties. After Facebook changed the algorithm, the platform began promoting links and recommendations from friends and family. People want to consume filtered news from people they trust, with similar views.
As the Guardian reported Brexit didn't stand a chance in the online bubble. A Washington DC strategy company, Goddard Gunster, explained to Brexit organizers that, "the facts don't work". The "Remain" campaign featured fact after fact, instead of appealing to people's emotions. The "Leave" campaign featured emotional, well-crafted snippets that were compelling and often false. This online bubble may explain Trump's rise in the U.S., because of his effectiveness in connecting emotionally with voters using sound bytes on social media.
3. Confusion and chaos about cyber security laws
One of the most effective ways for organizations to fight cyber crime is to share cyber threat intelligence data, based on common standards. E.U. members believe in a "me today, you tomorrow" acknowledgement. This allows E.U. businesses to monitor and share actionable cyber intelligence using an authority framework to prosecute criminals. The Data Protection Act (DPA) in the U.K. was enacted in 1995. It morphed over the years into the General Data Protection Regulation (GDPR), representing all E.U. members, which goes into effect May 25th, 2018. Currently, the EC3 (European Cybercrime Centre) and J-CAT (Joint Cybercrime Action Taskforce), of which the U.K. is a member are effective in resolving cyber threats in Europe.
If the U.K. is no longer part of these agreements, it must negotiate new ones that will lead to confusion and chaos for its businesses and citizens. British citizens and businesses will need to understand their rights and learn how their information is stored, secured and privately held in each E.U. country.
Cyber criminals act as gangs and groups, and operate in many jurisdictions. Historically, the ability to respond to criminal activity and cyber threats in different regions and countries has been easier when a common set of rules and standards exists. Brexit complicates this because new agreements need to be made with the U.K.
The Brexit decision should serve as a reminder to Canada that our North American neighbors create more than just economic growth from trade. As Brexit is teaching us, thousands of agreements with the E.U. and international community need to be rewritten with the U.K. One positive is that nothing can happen until the British parliament votes on article 50, which begins a two-year process for the U.K. to leave the European Union.
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