A Hard Place

"If I was told I would be stewing grass to feed my family in five years time if we left the EU, I would still do it." Thus spoke Simon Heffer in the pro-Brexit film: Brexit the Movie.

Luckily for Heffer's children (and us), it won't come to that. No matter how bad things get, comparisons with wars and depressions are overblown. That doesn't mean entrepreneurs should be blasé about a no-deal Brexit though – quite the opposite.

No-deal will mean tariffs, as the UK would be treated like any other third-party country. Even those backing a no-deal Brexit acknowledge there will be some negative economic impacts. After all, it's hard to rebut the world's leading economists, who all agree that tariffs are harmful (see herehere & here).

When it comes to trade, the EU is particularly important to us because it's on our doorstep. The gravity model of international trade – which is that that bilateral trade between two countries is proportional to size, measured by GDP, and inversely proportional to the geographic distance between them (in plain English, we tend to trade with people that are physically close to us) – shows why putting barriers between you and your closest neighbour is a bad thing.

You don't need to be an economist to get this though. Just check out the advice the Department of Business, Energy and Industrial Strategy (BEIS) has asked me to share with you. (This isn't 'project fear', it's 'project stuff you really need to know if you trade with or in the EU'). Business Element is part of its EU Exit Public Information Campaign and it's not light bedtime reading:

Some or all of this might not impact your business directly. But few of us are immune from the fallout of a no-deal scenario. Businesses in your supply chain doing slightly worse will be bad for your business. Some might think there's a niche reason that their business will benefit, and they might be right. An export-focused company that sells only to non-EU countries may well benefit from the recent fall in the pound. These are the exception; not the rule.

According to betting markets, a no-deal Brexit is still not likely, but well worth businesses scenario planning for. Whatever happens, we won't be eating grass. But that's hardly a ringing endorsement.

Uncanny Valley?
Our Research Director Sam Dumitriu analyses the growing tension between journalists and Silicon Valley in his latest Medium article. He sides with the entrepreneurs: "Why then do journalists frequently attack the efforts and inventions of entrepreneurs as unoriginal? It might simply be the case they fail to see why an idea is innovative and useful. Possibly, but I think there’s something else at play. There’s been a shift in cultural power from the media and politics to business and tech. If Silicon Valley isn’t actually as innovative as they claim to be, then pointing this out is a way of reclaiming some of that lost status."

Post Brexit
From Monday,EU citizens will be able to apply for status under the EU Settlement Scheme.However, you'll need an Android phone or tablet if you want to scan your identity document – otherwise you'll have to send it by post. It's all veryLean Startup. Hopefully the minimum viable product is a little more viablethan was during its trial.

News and Views

Why high street planning policies need reform

On the impact of the EIS seven-year rule

How thousands of foreign students – including entrepreneurs – were failed by the Home Office (£ FT)

Our research on the equity funding gap is cited in Boss magazine

Working into your 70s or 80s needn't be a bad thing

In the US there is a big debate about raising top tax rates to 70% – here's what the experts think... and Bloomberg View has a debate on it

Tech whizz Birdie aiming to revolutionise care for the elderly

The Indian entrepreneur who brought the curry house to Britain

David Warsh on David Autor on Automation

App connected salt-dispensers!  (£ FT)

new study on the effect of digital technology use and adolescent well-being finds the association “between digital technology use and adolescent well-being is negative but small, explaining at most 0.4% of the variation in well-being. Taking the broader context of the data into account suggests that these effects are too small to warrant policy change”

File under important: Declining labor force growth explains declining dynamism in US

Vanguard founder Jack Bogle has died – he made millions of Americans richer by offering them a free lunch

Tyler Cowen debates Joshua Kim, Agnes Callard, and Eli Dourado on the ethics of economic growth

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