Abstract
Regional resilience is a topic of growing academic and policymaker interest. This article empirically examines this concept by scrutinising the impact of Brexit on Scottish small and medium-sized enterprises (SMEs). Given their crucial importance for the Scottish economy, SMEs are a good ‘unit of analysis’ and a powerful barometer for measuring regional resilience. The research adopted a novel mixed methods approach examining the Longitudinal Small Business Survey together with in-depth interviews with SMEs. It is clear from the survey analysis that certain types of SMEs (i.e. innovators and exporters) were disproportionately fearful of Brexit. This was firmly corroborated by the interview data which found these same firms to be the most detrimentally impacted, manifesting in reductions in employment, exports and innovation. In contrast, the majority of domestically focused, less innovative SMEs were much less concerned and less negatively affected. While a small minority managed to deploy adjustment mechanisms to mitigate these negative effects, overall many firms had major difficulties operationally and strategically coping with this uncertain and turbulent environment. The findings suggest proactive public policies will be needed to help mitigate the difficulties caused by Brexit for certain types of SMEs.
Highlights
In the main, the academic debate on Brexit has strongly centred on the underlying sources of inequality which generated the vote to leave the EU (Billing et al, 2019; Lee et al, 2018; Pollard, 2018)
While much of the regional resilience literature has traditionally focused on the macro-level nature of change to entire regional economies, this article highlights important firm-level behavioural impacts and changes in light of shocks such as Brexit
Given their crucial importance for the Scottish economy, small and medium-sized enterprises (SMEs) act as a powerful barometer and a strong proxy for measuring levels of regional resilience
Summary
The academic debate on Brexit has strongly centred on the underlying sources of inequality (i.e. the so-called ‘left behind’) which generated the vote to leave the EU (Billing et al, 2019; Lee et al, 2018; Pollard, 2018). Over the last decade the impact of ‘shocks’ has recently become a prominent subject of empirical enquiry in economic geography and regional research (Martin and Gardiner, 2019) On the whole those examining resilience to Brexit at a firm-level have typically focused on how large firms (often foreignowned) are likely to be affected by Brexit (Dhingra et al, 2018). To delve deeper into the current and likely future impact of Brexit, the research involved in-depth interviews with a wide crosssection of Scottish SMEs (n 1⁄4 21) to gauge the firm-levels effects emanating from the Brexit process This method provides a novel empirically grounded contribution to literature on regional resilience by answering the following research question: what types of Scottish SMEs are most concerned by Brexit and how they are being impacted. The article ends with a discussion, conclusions and policy recommendations
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