» Impact of Brexit on creative industries
The creative industries have become vital to Wales, with more than 600 firms contributing £350m to the local economy. Cardiff University professor and director of Clwstwr, Justin Lewis, and Marlen Komorowski, impact analyst at Clwster, look at the impact Brexit will have on the sector
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 1 in 10 jobs across the UK, employing 700,000 more people than the financial services sector.
Creative businesses in Wales have played a strong part in this story. This week Welsh Government launched Creative Wales, in recognition of the fact that the creative industries are now a key priority sector for the Welsh economy.
In the 10 years between 2006 and 2016 the Welsh creative industries grew by 94.9%, far outpacing other sectors.
This growth has been led by what the Observer called “a boom in Welsh drama and television”, producing big drama productions from Doctor Who and Sherlock to the Discovery of Witches and His Dark Materials, as well as a raft of popular TV titles from Hinterland, Hidden and Keeping Faith to Casualty and Only Connect.
Much of this activity is centred on and around the Welsh capital. The Bazalgette Review of UK Creative Industries described Cardiff as one of the UK’s largest media production centres, backed by a strong independent TV production industry with over 600 firms contributing £350 million to the local economy.
The success of the screen sector in Wales has been a catalyst for increasing the ambition of the Welsh creative sector as a whole, with new and ambitious creative businesses emerging across the length and breadth of Wales.
Their value, of course, is not just economic: they shape our national identity and tell stories about Wales, not just to Wales, but to the rest of the world.
There is a lot to be optimistic about in the Welsh creative sector.
But with the UK having left the EU yesterday, what impact will Brexit have on the Welsh creative industries? To find out, we surveyed 244 creative businesses across Wales.
Four out of five Welsh 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 potentially will become 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 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’ two largest creative sectors: the Film/TV sector – which has been thriving in Wales in recent years (where 87% expressed concern) followed by the music and performing arts sector (where 83% expressed concern).
Creative businesses have concerns that range from broad economic and structural changes to practical dayto-day problems that Brexit may create.
These come under four broad headings:
■ Business and economy: A concern that Brexit would lead to slower UK economic growth and lower consumer and client spending.
Price changes, higher costs and an increase in bureaucracy around trade, especially if the UK falls out of regulatory alignment with the EU.
Clients with strong European connections leaving the UK.
■ Mobility: Businesses are worried that ending free movement will mean an increase in bureaucracy in travel arrangements 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: Limitations on labour movement which will make it harder to attract EU talent, while placing burdens on future collaborations with partners in the EU.
■ Reputation and access: Many fear that Brexit would have a negative impact on their reputation for international co-operation with Europe, and that they would lose access to EU funding streams.
A smaller proportion of creative businesses – one in five– indicated that they had already been impacted by Brexit.
These impacts include:
■ a decline in projects and orders since 2016 due to Brexit uncertainty;
■ the need to change business strategy to focus on non-European markets and to prepare for the unravelling of existing EU agreements/ networks;
■ the higher cost of materials/products and services (due to a drop in the value of the pound).
It is possible that the creative industries in Wales feel especially vulnerable – as a nation 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 concerns will be widely felt by the creative industries in the UK as a whole. These concerns need to inform what kind of deal the UK strikes with the EU. Many of these concerns, after all, are both real and tangible.
Since the creative sectors are an increasingly strong and successful part of the Welsh and 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 its 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.