BREXIT Coping with the unknown

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How should arts organisations proceed into such an uncertain international future? Callum Lee of BOP Consulting has this advice

Since Brexit, the concept of “uncertainty shocks” has been a popular dinner party conversation for economists. Typically, these shocks are caused by dramatic events, like the assassination of JFK or the September 11 terrorist attack. The uncertainty results in a drop in production, in demand and in investment. In the UK, we are facing a classic uncertainty shock in the months after Brexit.
With no real idea of what will happen next, people behave with extra caution. Risk-averse investors may avoid the UK, uncertain of the future outlook. UK theatre producers may think twice before planning a tour to the Netherlands, uncertain of the future regulations.

This uncertainty has already affected the cultural and creative sectors. Take this recent headline from Variety, the American entertainment trade paper: “UK broadcasting and production powerhouse ITV revealed plans on Wednesday to slash £25 million in overhead costs for next year — including some jobs — in response to the uncertainty provoked by Britain’s decision to leave the European Union, or Brexit”.

Government is also erring towards caution. Steve Green, chair of the European Capitals of Culture Selection Panel, has called for DCMS to hurry up and start the competition to find the UK city for 2023, a process that is already far behind schedule. Are they also uncertain of the future and so choosing to do nothing?

This curious stasis is challenging for the arts sector. Before the likely loss of our free access to European markets, and the potential loss of Creative Europe programmes, many arts leaders were looking at where alter- native export markets and collaborators are. Some are arguing we should throw ourselves towards the booming opportunities in China, others that we should remain focused on our partners and allies in the EU. There are arguments for both – one is large, one is booming. Export growth for cultural goods in the decade from 2003 was 23% to the EU while over the same period, exports to China grew a staggering 513%. But although China saw incredible growth it started from a very low base. Even with this growth, our exports to China were just 3% of those to the EU (according to the United Nations Conference on Trade and Development data for creative goods, 2012).

How should arts organisations react to the shock? They should note that the true disaster comes with in- action - the disaster of uncertainty is perceptual rather than tangible. We are, after all, still in Europe. The Chinese will still want to work with us. By not doing anything, they are depriving themselves of the opportunities that remain as real as before.

Barring some extraordinarily badly managed negotiations, Europe will remain our largest trading partners. It remains the destination for over half
of our creative exports. If the threat would have to be fearsome to justify us refocusing too many of our efforts away from Europe, an established market and a train ride away.

And the huge opportunities else- where will not vanish. In China, our forthcoming research into the theatre and visual arts shows how to capitalise on the growth and opening out of the sector there, especially for new collaborations. Establishing trust in newer markets takes time, so it is worth adopting a longer term collaborative model, built on a foundation of mutual respect and mutually beneficial terms. The Chinese government has also been making major efforts to attract UK collaborators and investors. It has reasserted copyright law to protect makers. And a focus on the creative and cultural industries, which are a “main pillar” of the national economy, has helped grow audiences.

To help them realise these opportunities, if we lose access to Creative Europe’s programmes the UK government will need to boost support to both exports and transnational working. They could borrow ideas from the Netherland’s Grant Programme for Internationalisation, which provides easy-to-access grants for smaller creative businesses to work overseas. Or Korea’s TheArtro, which supports international ex- change online and offline. So there is an important role for organisations, such as the Creative Industries Federation, to continue to focus government minds on the need for sustained support for the sector.

The longer-term trends are all positive, with huge growth, a diversity of new markets and a growing recognition of the UK’s cultural profile. The worst thing for the sector to do now is to fall for the uncertainty and do nothing, and forget about these opportunities.

 

 

 

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