On Jan 22 Dyson Ltd, announced that it is going to relocate its global headquarters from the UK to Singapore. The announcement has brought criticism from those who believe it is a response to the stalled Brexit process; James Dyson being a firm advocate of Brexit. Others have accused Dyson of hypocrisy; having argued for Brexit he is now deserting the UK, just at the time that the UK is about to leave the EU. Other have suggested that it is a financial decision although the tax implications of the move are not yet fully clear, and the suggestion is that it will not adversely affect the taxes the company pays in the UK which amounted to around £185M in 2017.
The company argues the move reflects its shifting market; only 4% of its sales come from the UK and Asia is seen to be a major growth market.
The company has been a major success story for the UK with total business growing to £3.5B in 2017 and employing around 3,500 in the UK, 50% of whom are scientists and engineers. Dyson has also invested in R&D collaborations in the UK, including £5M into a robotics lab at Imperial College and £12M in the creation of a design engineering school at the same institute. If this success were to be replicated by more companies in the UK, then it would support a stronger economy and vindicate the UK having a successful industrial strategy.
Whatever the ultimate reason for the decision, 2 key points come to mind
- Theconcern that has grown over the past 30 years about the offshoring of UK manufacturing (something that Dyson did in 2003) is now being increased by the growing realisation that the growth markets for products are also shifting in the same direction.We risk losing control both of manufacturing and the markets for manufactured goods.
- Large companies such as Dyson have the ability to optimise the location their R&D and manufacturing considering access to skills, markets and financial incentives.The UK cannot stop this, although an effective industrial strategy can help adjust the balance in favour of the UK.As UK grown companies internationalise and locate some their R&D abroad, we need to increase efforts to locate and encourage international companies looking to do the reverse.
Rather than condemning the decision, we should be celebrating what Dyson has achieved over the past 30 years, the contribution he and his company have and continue to make to UK R&D and the economy, and the fact that a UK technology company has grown into global player. At the same time we should be reflecting on the future of R&D in the UK, the role it plays in the economy and how it can thrive in a world which is seeing a shift in both in technical knowledge and commercial markets to the East. Whether Brexit is a good or bad decision in relation to market changes, the stalling of the government’s industrial strategy over the past 18 months has done nothing to help the UK maintain or grow its position in the global economy. And criticism of Dyson’s decision and speculation on the reason for the decision risks distraction from the issues that really matter in ensuring a competitive UK economy.