Brexit – Economic Impact Simulation


The following simulation shows why the Brexit is such a terrible move!

Assume you have several hundred projects across europe and a few experts in each country to deliver them. Assigning these experts to the projects follows complex optimization rules. It is quite interesting to see that adding new political constraints to this model changes the cost function so that the optimizer converges into a new global optimum. In the case of UK leaving the european union my worst case simulation (a 20% cost increase for UK import and export (as a result of increased traveltime, administrative and legal effort) ) shows the following:

Before Brexit:

You can see projects in europe close to the UK (eg in Amsterdam or Paris) made sense to be delivered by experts from the UK to avoid overcapacity. And also experts from outside traveled to London to help out in case of a resource bottleneck in UK:

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The green lines show collaboration in projects between experts from different countries.

 

After Brexit:

In the new optimum UK experts are assigned to UK projects only. For some projects the optimizer can`t even find the required experts anymore due to a lack of skilled resources within the country. On the other hand the increased cost will make working outside UK for British workers unprofitable ultimately leading to higher unemployment. You can see the island really isolated from the rest of the world.

Another interesting aspect is that the majority of people will have to commute longer distances to get to their workplace.

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While the impact on europe is negligible it can be said that the United Kingdom is likely to pay a very high price for this decision.

In this worst case simulation  (not very likely as the pound gets weaker) they lost 100% of their export/import involvement due to a 20% delivery cost increase.

 

Here the overlay:

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My hope is that this simulation will convince people that the european project is essential for peace and prosperity on the continent and should not be sacrificed to those who promise simple solutions to complex problems.

 

I will give a talk about the computational model behind the scenes in vienna on Tuesday! Free Registration: http://www.eventbrite.de/e/pass-austria-sql-server-community-meeting-juni-ii-registrierung-24865086142


Comments (2)

  1. Des FitzGerald says:

    Hi Lukas,

    Interesting simulations and while I do believe that the Brexit effect would be felt in these projects I question the validity of any simulation which forgets that the Republic of Ireland is a separate country and has its own links with Europe. These simulations seem to ignore this fact and totally disregard connections between this EU country and the rest of Europe unless via the UK. Am I missing something?

    Cheers,
    Des

    1. LukasSteindl says:

      Hi Des, you are right! I have to admit i accidently penalized Ireland (and not just Northern Ireland) in the cost function.
      I will fix this for the presentation on thuesday.

      Cheers,
      Lukas

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