Tag: Jeff Immelt

Brexit Threatens Growth in Austin and the U.K.

Editor’s Note:  This article was published by the World Affairs Council of Austin on June 21.

Fred Schmidt is unequivocal about the June 23 Brexit vote, the British referendum on whether the country should stay or leave the European Union, and its impact on Austin.

“Linking EU and U.S. economies with TTIP [the Transatlantic Trade and Investment Partnership] is where the future lies.  “It would be mind boggling for Britain to leave the EU and its massively successful economies of a union with linkages of economies and people.”

The start-up city takes London

Schmidt, an ebullient entrepreneur and director of international affairs for the Capitol Factory, was just awarded an MBE by Queen Elizabeth for his role in developing the economic partnership between Austin and Hackney. The relationship, which was formalized as a sister and science city partnership in 2014, serves as a springboard a partnership that’s expanding across London’s other 32 boroughs and into Europe. In fact, on June 23 Schmidt will be in London with United Kingdom Trade & Investment department, as part of the Austin delegation to London Technology Week, the annual festival of all things innovative.

It should be quite a week for Austin’s role as “the start-up city.”  London Tech Advocates, a private-sector led coalition of tech and community movers and shakers plans to announce its launching an Austin chapter to cultivate the sister and science city bond Schmidt and the Austin- Hackney team started, focusing on creative tech, gaming, education, life sciences and biomedical, food tech, fashion tech, mobility innovations, zero waste, and advanced manufacturing. The announcement will be made during London Tech Week.

A global protectionist environment

Since Britain would be the first country to leave the EU, no one know exactly the ramifications of an exit would be. Brexit polls showing the “Leavers” neck-to-neck with those who want to remain in the EU.  But the general tenor is that a Brexit would not be good news for Austin companies with offices in Britain, or for British-based businesses here.

“Only the economists and other realists are planning,” said Schmidt. “But the implications (of Brexit) are clear.”  That is, London would no longer be the default gateway to the European Union.

Then there is the headquarters question. “When considering opening a European headquarters, Britain is an automatic choice because of the shared language and access to the Eurozone. If Brexit happens, companies will need to calculate whether to open their headquarters on the continent or open a UK branch managed from either the continent, Ireland, or the U.S,” said Robert Bou, president of Austin-based Ashlar-Vellum which designs computer-aided design and 3D modeling software.

Those of you who were lucky enough to attend the Texas-EU summit in May heard Caroline Vicini, deputy head of delegation of the European Union to the United States, talk frankly about the challenges TTIP faces, one two major trade deals opposed by both presidential clients. Speaking of straight talk, protectionist policies stunt growth no regardless of size. (Slight tangent: For an intriguing view from the perspective of the Fortune 10, read General Electric Chairman Jeff Immelt’s graduation speech to NYU’s Stern School of Business.)

Though not everyone thinks Brexit would hinder London’s growth. Nowhere else can hope to compete with London’s status as “the talent magnet for Europe. No other place comes close,” Richard Florida, an urban theorist and director of cities at the Martin Prosperity Institute in Toronto, told Bloomberg Technology in February of this year.  Along with New York, “it is one of two economic centers of the world,” a reality that wouldn’t be significantly altered outside the EU.”

Life will move on  

Schmidt is sanguine. On June 23, “we’ll be cryin’ tears of joy or sadness in some pub that night,” said Schmidt, “And then life will just move on.”

A Marketer’s Lessons from Brexit

Ever failed to gain support for a smart, admirable product or campaign that seemed like a no-brainer?  Something like conserving water?  Attracting technical talent? Remote storage (until it became the “cloud”)?  Saving for retirement?

So it was with Brexit, a seeming no-brainer turned on its head by lackluster messaging, a failure to get voters to the polls and a strong political environment.

1. “Want to Make Sure No One Listens? Deliver a Boring Message

“One of the things that went terribly wrong with those who were campaigning for Remain was to find a passionate way to defend the European Union,” the English historian, commentator and Columbia University professor Simon Schama, told NPR when the vote to leave the European Union was announced.  “The point of the European Union was to be dull and boring rather than violent and aggressive and bellicose, which it have been for most of its history,”

A successful real estate saleswoman once told me that people buy by emotion, not reason. For Britons, the message of peace, protection and prosperity was drowned out a strong wave of  nationalism stoked by fears of uncontrolled immigration a remote central bureaucracy.   Emotion ruled.

2.  Apply the “what’s in it for me” (WIIFM) test

“A slogan and a message must be aspirational — either give people hope things will get better or that the bad stuff will stop — both, said Ruth Sherman, a political communications analyst, told The New York Times.  “I remember thinking when I first saw [one of Hillary Clinton’s taglines], ‘I’m with her’ — when I saw it, [I thought] ‘Really?’ It’s not my job to be with her. She should be with me.”

The message also has to be strong enough to move people to action. Although 75% of  British 18-29 year olds voted to remain in the EU, these voters did not turn out in sufficient numbers to make a difference in the final result.  And showing up, as Woody Allen reminds us, is 80% of success.

3.  Pay attention

Be it data, news reports or eating lunch with the troops, it’s important to keep you finger on pulse. The ‘Remain’ camp’s ‘Stronger Together’ slogan “failed to ‘personalize, individualize or humanize their campaign,” Frank Luntz, an expert on political messaging told The New York Times.  “The problem with the concept of ‘together’ is that it promotes groupthink…We are in an age of individual action, not collective responsibility.”

4.  We are doing business in an increasingly protectionist environment.

I hope by now you’ve read GE Chairman Jeff Immelt’s graduation speech to NYU’s Stern School of Business.)  Every company is on its own, he warns as “globalization is being attacked as never before. In the face of a protectionist global environment, companies must navigate the world on their own,” he said. “We must level the playing field, without government engagement.”

5.  Yes, it can happen.  Have a plan

The quote I remember most from my first interview with Fred Schmidt of the Capitol Factory was, “Only the economists and realists are planning.”  Everyone thought it was a done deal: Britain would stay in the EU.  Today, United States’ seventh largest trading partner is paralyzed, rocked by what could never happen.

Pay special attention, technology companies.  As Immelt reminds us, the Internet has connected us, but it has not created jobs. Many are questioning the value of globalization and business interests as “elite” and subject to distrust. Stay informed and participate. Organizations like the American Electronics Assoc., the Global Entrepreneurship Summit, many of which cluster around universities, educate elected officials and lobby business interests.  Be active, there is strength in common interest.