Brexit: Industry View
The Digital Economy
The digital economy, which encompasses provision of computer hardware, telecoms,
software and information services, is growing in importance across the EU. The industry’s
share of GDP increases steadily every year. Ireland’s digital economy is expected to grow
from €12.3 billion in 2015 to €21.4 billion in 2020.
Ireland ranks eighth in the EU’s Digital Economy and Society Index report for 2017. We rank very highly when
compared to other countries in Europe when it comes to the integration of digital technologies by businesses.
However, Brexit poses a number of challenges for multi-national and indigenous firms located in Ireland.
Some of these challenges mirror those being experienced in other sectors, in areas such as tariffs and the
availability and cost of talent – at present, the technology and telecoms industries directly employ more than
125,000 staff in the Republic of Ireland. Other challenges, such as data protection and data centre locations,
are specifically the concern of the digital economy.
How PwC can help
Brexit is here, and you need to be prepared for the challenges ahead. PwC Ireland is ready to work with you,
and has the solutions you need to Brexit-proof your business.
We have been scenario planning for Brexit with industry experts, economists, clients and senior government
officials. Our digital experts have developed useful tools, and we can provide tailored advice to help you
mitigate risks and maximise opportunities.
Please contact any of our Brexit taskforce experts, our dedicated digital experts or your usual
PwC contact.
Ronan Fitzpatrick
Director -Technology & Digital
Consulting
Frank Renehan
Manager -Technology &
Digital Consulting
ronan.fi[email protected]
+353 1 7928287
[email protected]
+353 1 7927351
Some of the most critical issues for the digital sector, the impact they may have and some actions
to mitigate them are captured overleaf.
www.pwc.ie/brexit
Issue
Data protection
Data centres
Impact
The UK is set to implement the new European
General Data Protection Regulations (GDPR) in
May 2018.
Identify action plan to ensure EU-based
storage only of data subject to Data Protection
legislation.
Failure to support GDPR or an ‘adequate’
alternative will require complex arrangements
to be put in place by Data Controllers to ensure
compliance with European legislation.
Assess options for secure removal of sensitive
data from UK-based data centres if Data
Protection regulations cease to meet EU
Adequacy requirements.
Complex and uncertain data protection
regulations may persuade internet companies
to develop data centres in both UK and EU
locations. They may alternatively use GDPR as a
minimum standard and focus on EU expansion.
Identify where cloud-stored data for your
organisation is being held.
Data relating to EU citizens/companies being
stored currently in UK data centres may need to
be re-located to ensure compliance with GDPR.
Cloud computing providers automatically
replicate data across territories to provide
redundancy in the event of disasters or to locate
data closest to customers. Decisions around
tariffs and data protection may make this process
more difficult from regulatory and taxation
perspectives.
Talent
Identify where Disaster Recovery data or
resources are being held if replicated to other
geographical locations.
Implement encryption for your organisation’s
data, both at rest and in transit to reduce the
risks of unauthorised access.
Model the implication of potential cost increases
based on likely VAT and tariff regimes that may
apply post-Brexit.
The race to hire the right talent to drive the
growth of the digital economy has become
increasingly globalised, with economies
augmenting the native workforce through
international recruitment.
Assess current staffing profile, with an emphasis
on identifying UK staff that may require visas in
future. Identify current Irish visa requirements for
equivalent staff if coming from non-EU
Countries.
18% of staff in the UK digital economy are from
outside the UK. Ireland may have an opportunity
to attract some of these staff in the event of a
hard Brexit.
Model the impact of higher salaries in the Irish
market due to increased demand for qualified
staff and potential shortage of skills.
Recent immigration changes in the US have
been sharply resisted by digital businesses, as
they hamper their ability to retain and attract
international talent. A hard Brexit with restrictive
immigration policies is likely to produce a similar
impact.
Data flows
Action
The unimpeded flow of data across borders and
access to large-scale computing resources is a
key enabler of the digital economy. Any postBrexit complications in data transfer is likely to
reduce the growth of the Digital economy.
Assess alternative resourcing options such
as upskilling existing staff or partnering with
education programmes.
Assess the security of data in transit from your
organisation.
Consider the implementation of VPN or other
encryption measures to protect the confidentiality
and integrity of data flows.
A key consideration for Ireland is that of 12
fibre optic connections to Europe, all bar
one terminate in the UK. The majority of Irish
communications with the EU must pass through
the UK, potentially creating a transhipment
consideration for taxation of data flows, and
opening that data to the threat of compromise.
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network and/or one or more of its member firms, each of which is a separate
legal entity. Please see www.pwc.com/structure for further details.
www.pwc.ie/brexit