Following the UK referendum vote to leave the EU, industry awaits UK Government details on the impact this will have on future business


Following the UK referendum vote to leave the EU, industry awaits UK Government details on the impact this will have on future business – specifically trading and investment, as well as the shape and direction of a forthcoming Industrial Strategy to provide support to growth sectors of the UK economy. Bearing in mind that one is not a substitute for – and nor does it cancel out the effects of - the other, there is a pressing need for UK (and Scottish) business to receive assurances of the promising opportunities which lie ahead for UK industry in the new trading environment.

This commentary sets out some early recommendations for the IB sector to optimise engagement with this agenda, and to ensure a strong voice and position in these proceedings as they develop. These include:

  1.  IBioIC’s membership should create a discussion forum to consider the various issues noted in this paper which are likely to affect trading and investment opportunities in the future. These include access to EU skills / talent, funding and wider investment
  2. Developing a clear membership statement concerning the necessary conditions for the industry to support Scotland’s place in the internationally competitive IB market
  3. Generating a stronger membership profile and visibility in relation to the current context of Brexit and the UK’s growing focus on a UK Industrial Strategy, ensuring clear engagement with key Scottish / UK stakeholders who are already fine-tuning content and direction


Most evidence-based sources point to a negative impact on the UK from Brexit, including Scotland’s economy. The UK Government’s recent Autumn Statement shows signs of preparing the ground for the impact. Arguably, the UK Government’s rhetoric to date points to a ‘hard’ Brexit which implies limited economic integration with the EU. This is compounded by a protracted timescale since any transition arrangements can only be discussed and agreed with the EU-27 after the triggering of Article 50 in March 2017.

There is general consensus from economic experts that the depressed global investment climate is set to continue. This climate will be perpetuated by Brexit and the exchange rate, which will be keenly felt in the UK by low domestic business investment and overseas foreign direct investment.

The UK’s exit from the EU requires a new interpretation of the UK’s ‘shared interests’ with our EU counterparts. The historical ‘level playing field’ – facilitated by the Single Market – will be altered by Brexit, potentially creating new forms of competition where there was previous collaboration. There has been less evidence, to date, on the opportunities which this will create.

UK industry needs to fully consider the opportunity costs related to current uncertainty. Emerging evidence from IBioIC’s membership notes that assumed EU partnerships and alliances can no longer be relied upon.

There is no doubt that the UK will have a changed relationship with the EU. Brexit implies a fundamental point of departure from the status quo. This new context is critical for the IB industry to consider.


The EU is a major, global force in working towards a green economy by 2050 with, the Bioeconomy underpinning the EU’s drive to support a low carbon economy.  IB is recognised as a ‘key enabling technology’ to address this challenge, with an EU market in 2013 estimated at €28 billion. Large-scale, cross-EU collaborations are in place to accelerate international ambitions which include promoting joint research and innovation, establishing new value-chains and developing global markets and competitiveness.

The UK IB industry is estimated to be worth €4.78 billion by 2030, according to the Biotechnology and Biological Sciences Research Council (BBSRC). With a thriving IB community in Scotland (IBioIC’s membership is approaching 100 companies), there remains a substantial opportunity for Scotland to contribute to and benefit from this global context. The Scottish IB sector is recognised as a critical EU player in supporting delivery of the EU’s Bioeconomy and circular economy ambitions. Examples of EU networks and partnerships include; the EU’s €3.7 billion Bio-Based Industries Joint Undertaking (BBI-JU) with bio-based industries and the Vanguard Initiative (of which IBioIC is also part of the Scottish membership). These efforts aim to boost opportunities for inter-regional collaborations to invest in unique demonstrator projects for new technologies, value-chains, product testing and new business models.

This landscape is not without its challenges. The EU’s IB sector faces investment shortages from the industry and the VC community. The acceleration of expensive technological breakthroughs / solutions is essential, while the industry must remain cost effective. The long-term supply of sustainable biomass is thought by many to require a ‘cascading’ EU management approach to plan for resources holistically and reduce counter-productive, cross-EU competition. This includes investing in large-scale bio-refineries and an EU-wide effort to managing finite resources across the whole IB sector.

In a post-Brexit environment, it is unclear if or how the UK can continue to address these challenges in partnership with the EU.  Scotland’s IB industry should consider whether the UK’s exit from the EU could create competitive disadvantages for the UK IB industry, as an ‘outsider’ to the EU competitive effort.


Scotland’s IB industry has an opportunity to mobilise its expertise and foresight to create a narrative and help to drive a clear voice in the current, turbulent climate. The starting point should be the status quo, which is the benchmark against which any change (and the nature of that change) can be measured. Areas to explore could include:

  • The investment environment and routes to retaining UK / Scottish and EU collaborative investment efforts – e.g. in support of investment for large-scale bio refineries and EU-focused technology and demonstration platforms to support the IB industry.
  • Continued access to EU R&I funding –likely effects of losing R&I funding and associated collaborations across EU biomedical science community collaborations[1]?
  • Perceived or actual complexity of the EU IB industry ‘doing business’ with Scottish industry, including risks and the general ‘hassle factor’
  • Continued access to EU-wide talent / skills
  • Promoting the IB industry’s role in the UK’s Industrial Strategy, while recognising the increased likelihood of rent-seeking behaviour across many UK industry sectors, in an effort to help mitigate against the effects of Brexit
  • Creating a clear narrative of the necessary conditions which will underpin Scotland’s place in an internationally competitive IB market


IBioIC members in a recent survey intimated concerns that – post-Brexit – trading, business, research and skills environments are likely to remain very challenging for UK business. The sector should develop a shared industry position concerning the post-Brexit ‘framework’ needed to provide assurances and guarantees in relation to trading, investment, research and access to skills and talent. This would include greater clarification from the UK Government concerning the protection of conditions to ensure a smooth and successful transition from inside to outside the EU.

Moreover, this would also serve to demonstrate that IBioIC’s members are proactively positioned within Scotland’s business landscape, thus supporting their visibility and profile with the Scottish Government. This extends to carving out a role for the industry in the process underpinning how Scotland will be seeking to engage with the UK’s forthcoming Industrial Strategy through, for example, working with Scottish Government and the Enterprise Networks.

In a context where many voices are seeking to influence the debate, it is in the interests of the Scottish IB industry to work together and generate a specific response to Brexit, and to do so now, through clear leadership and strong industry engagement.

Alison Hunter is a Brussels-based policy analyst with over 15 years’ consultancy experience of working with Scottish stakeholders. She specialises in economic growth, innovation policy and forging partnerships for Scottish /EU engagement.