The impact of a “Brexit” (the scenario in which the UK left the European Union following the referendum in the on 23 June) would be mildly negative for IT spend in the UK, but neutral for the rest of the European Union, according to IDC’s European analysts.
IDC Europe recently polled its analysts on the potential impact on IT spend as a result of a Brexit, without making any direct forecasts of the overall economic impact. IDC’s European analysts’ view is that a UK exit from the European Union would likely have a mildly negative impact on U.K. IT spend, while the impact on IT spend in continental Europe would likely be neutral.
“We would expect a Brexit to impact UK IT spend, but the effect will not be dramatic because IT spend is governed by multiple factors which include demand drivers (such as the transition to 3rd Platform technologies) that are relatively independent of the local economic cycle,” says Philip Carter, chief analyst for IDC Europe. 3rd Platform technologies include cloud, mobile, analytics and social media technologies.
“Many organisations are also locked into multi-year software licensing agreements and outsourcing deals that would be unlikely to be cancelled or radically restructured in the short term as a result of a Brexit,” says Douglas Hayward, associate vice-president at IDC’s European Services team.
“Much of the Europe-wide impact will only be determined in the longer run, depending on the renegotiation of EU directives and legislation, and cannot be fully predicted at present.”
“Among vertical markets, financial services, manufacturing, and retail and wholesale would be the industries whose IT spend could be more negatively affected by a Brexit decision,” says Andrea Siviero, senior research analyst for the IDC European Industry Solutions team.
“Restructuring the financial single market on one side and the impact on the UK current account on the other could potentially lead these three industry sectors to struggle if the UK exits from the European Union.”