EU must protect creative industries from Brexit backlash

Written by Bernd Fesel on 19 July 2017

EU must protect creative industries from Brexit backlash | Photo credit: Flickr


Brexit has already started having a negative impact on Europe's creative industries, warns Bernd Fesel.

For the cultural and creative sectors (CCS) Brexit already has had a negative effect. Preliminary data from EU member states shows a decline of foreign investments in UK and of exports in goods and services to the UK in 2016.

CCS must expect in 2017 and 2018 a further reduced income from the UK markets because of a low value or volatility of the pound.

From the EU perspective working in the UK CCS is an easy entry point into the global market and global level of qualification. Just one example: the Royal Institute of British Architects has stated that 25 per cent of the architects in the UK are non-UK EU citizens. Reduced movement of EU talent into the UK can therefore be expected to have negative effects on income and skill development in Europe as well.

A Brexit anti-risk scheme is necessary to lessen now the expectation of volatility, for example, in currency or administrative burdens. Volatility is expected far beyond the two years of negotiations, at least for five years.

Most imports of creative goods in the UK came 2012 by far from the EU (€7bn), outnumbering US (€5bn) and China (€1bn). The UK was in 2011 the second largest importer of creative goods in the world, accounting for 7.61 per cent, only exceeded by the US with 20.04 per cent - according to UN statistics. China's import of creative goods reached 2.29 per cent of world trade. It can therefore be concluded that losing or reducing access to the UK creative industries market will have a critical impact on European CCS.

Fewer exports to UK will have a severe impact on more than 12 million jobs, 7.5  per cent of the EU's workforce.

The ECBN estimates up to two per cent of the EU work force might cope with reduced working opportunities and/or less income due to the Brexit effect - potentially up to 240,000 jobs.

The Brexit effect will not be gradual but, rather, an abrupt reduction because of the prohibitive character of obstacles.

The EU has an innate interest in a special relationship to the UK CCS to optimise access for its CCS. The Brexit negotiations should aim to exempt CCS in total from visa regulations to protect the EU workforce.

The largest proportion of UK creative industries service exports went to the EU in 2014, about 42.5 per cent of all exports. These services are innovative inputs to all sectors in Europe - far beyond cultural creative industries reaching out to the health sector, to automotive and digital industries.

The ECBN calls for a coherent strategy to compensate for the potential loss of UK CCS services to creative and digital development of the European Union - the UK tax relief scheme and cross-sectorial UK governance approach might be good examples.

The ECBN also wants to seize the opportunity to take the digital lead in cultural creative industries. As the UK government already noted in 2016, Brexit might undermine its own dominance in the field. But this is an opportunity for boosting digital content and innovation of CCS by unleashing the potentials of the SMEs and global players alike in the European CCS.

One way for a cultural exception might be to define a different timeline for the Brexit in the cultural creative sectors as in other sectors which are already dislocating from UK.

However the British Library will not move to Paris - so why the rush?

According to the European Parliament the potential of CCS has not yet been fully recognised and unleashed, especially for smaller stakeholders, up to 95 per cent of all CCS companies.

It is now the time to implement a coherent policy as proposed by experts to increase growth and jobs and well-being of CCS within the EU.

 

About the author

Bernd Fesel is Chair of European Creative Business Network

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