We woke up Friday morning to hear that the majority of people in the UK have voted to leave the European Union, also known as Brexit.
Without trying to sound judgemental, did everyone in the UK fail Economics 101? This regressive move will hit the UK the most, but everyone will be impacted. It is impossible to quantify what the real loss in UK’s standard of living will be as no on really has an idea what the new agreement will entail.
The real worries are that this anti-immigrant, anti-trade feeling will ripple throughout the world. What happens if Donald Trump were to become the president of the US? What if France, Holland and other Euro countries decide to hold their own Brexit vote? Should we sell all our investments now and buy gold?
If I knew the answers about where to invest money, I would not be writing a telecom blog. So let me try to constrain my views to what the impact on the telecom industry could be. At a basic level, international trade has been highly facilitated by the availability of abundant, low cost telecommunications. If countries become more insular in their business, there will be relatively less demand for telecom services, and trans-ocean optical networks in particular. That does not mean that I am predicting that our industry will go into decline, but on a relative basis, this means less growth.
On a more fundamental level, telecommunication service providers sell more stuff when their customers want to buy more stuff. With the current confusion and uncertainty in the world about how bad the economic impact of Brexit will be, who wants to spend money. The smart thing is to wait a few years for the dust to settle. But in a few years, the window of opportunity for telecom professionals looking for that promotion may have passed.
Now is the point where I should have a witty and wise recommendation for us all. The best that I can recommend is to attend the Richmond Hill Craft Beer Festival in August.