The creative industries are one of the UK’s most conspicuous success stories. Creativity is not just good for the soul, it is one of our best exports. The Creative Industries Federation calculates that the creative economy accounts for one in ten jobs across the UK, employing 700,000 more people than the financial services sector.
Despite digital disruption, the creative industries are seen as a part of the economy most able to prosper in an age of automation. And the figures bear this out, with creativity a key growth area over the past ten years. Since 2011, the number of creative jobs in the UK has increased by 30.6% so that by 2018, more than 3.2 million people worked in the UK’s creative economy.
The UK government recognises the importance of the creative sector across the whole of the UK, and has invested in nine creative industries clusters across all four UK nations. Nesta’s Creative Nation report demonstrates that the creative industries are key to local economies across the UK: between 2011-2016, the creative industries in the average local economy increased by 11%, twice as fast as in the rest of the economy. Their value, of course, is not just economic: they shape our cultural environment and tell the stories that help us understand the world.
With the UK leaving the EU on January 31, what impact will Brexit have on the creative industries? To find out, we surveyed 244 creative businesses in Wales. The Welsh Government has identified the creative industries sector as a key priority sector, both because of their increasing importance to the Welsh economy and their role in promoting Welsh stories, talent and identity.
There is a lot to be optimistic about in the Welsh creative sector, now the home to big drama productions from Doctor Who and Sherlock to Discovery of Witches and His Dark Materials, as well as a raft of other popular TV titles from Hinterland and Keeping Faith to Casualty and Only Connect.
Four out of five creative businesses, we found, are concerned about the impact of Brexit on their businesses. Of these, a quarter expressed very strong concerns, indicating that Brexit could potentially be a “disaster” for their business. Only 4% saw Brexit having any positive impact on their bottom line. And most of this group still have concerns, with less than 1% seeing Brexit as a generally positive development.
Concerns about Brexit are consistent across Wales, and were expressed regardless of company size. Among the different creative sectors, the highest level of concern was expressed in Wales’s two largest creative sectors: the thriving film/television sector (where 87% expressed concern) and the music and performing arts sector (where 83% expressed concern).
Why the concern?
Creative businesses have concerns that range from broad economic and structural changes to practical day to day problems that Brexit may create. These come under four broad headings.
Business and economy: Businesses are worried that Brexit would lead to slower UK economic growth and lower consumer and client spending. Many businesses are also concerned at the prospect of price changes, higher costs and an increase in bureaucracy around trade, especially if the UK falls out of regulatory alignment with the EU. There is also apprehension about clients with strong European connections leaving the UK.
Mobility: Creative businesses are worried that ending free movement will mean an increase in bureaucracy in travel arrangement between the UK and the EU (so, for example, making it harder to book artists, or increasing the burden on existing or future collaborations with EU partners).
Labour market: Any limitations on labour movement will make it harder to attract EU talent, while placing burdens on future collaborations with partners in the EU.
Reputation and access: Many businesses fear that Brexit will have a negative impact on their reputation for international cooperation with Europe, and that they will lose access to EU funding streams.
A smaller proportion of creative businesses – one in five – indicated that they had already been affected by Brexit.
These impacts include a decline in projects and orders since 2016 due to Brexit uncertainty. Some businesses have had to change business strategy to focus on non-European markets and to prepare for the unravelling of existing EU agreements and networks. Businesses have also been affected by the higher cost of materials, products and services (due to a drop in the value of the pound).
Keeping the creative economy strong
It is possible that the creative industries in Wales feel especially vulnerable. Wales is particularly dependent on trade with the EU – more so than any other UK nation or region.
But it seems more likely that their nervousness about Brexit will be widely felt across the UK’s creative industries. These concerns need to inform what kind of deal the UK strikes with the EU. They point to potential problems that are both real and tangible. Since the creative sectors are an increasingly strong and successful part of both the Welsh and wider UK economy, this level of concern needs to be taken seriously.
The Welsh government can try to mitigate the problems that may lie ahead, but many of the problems raised by the companies we surveyed are beyond their control. In this context, it is important that, in the months ahead, the UK government listens to these concerns and strikes a deal with the EU that does not hinder the growth of one of the UK’s most successful sectors.