As plans for Brexit are currently being discussed in preparation for UK’s departure from the European Union, what consequences are in store for creative businesses, and will it impact jobs for those working in smaller independent businesses?
Many of the creative and digital businesses in Liverpool call the Baltic Triangle home. With Brexit negotiations swaying towards a no deal – which could cost the UK’s creative sector £3.3 billion and 27 thousand jobs* as a result of said outcome- will Baltic still be the same highly praised home to creative industries?
I sat down with Citrus Suite’s Chris Morland & Steve Donovan to discuss this, and what issues it could potentially bring to those with independent businesses. Funding, which the EU offered independent creative businesses such as ‘Creative Europe’ and other funding such as ‘European Regional Development Fund’ (ERDF)’ will no longer be accessible for UK businesses as of 2020. I asked Steve what problems he could see with the loss of this funding. “There will be less opportunities for infrastructure needed to kick start creative business, less direct start-up funds for businesses that go on to generate taxes for the government, and without the funding what fills the void?”
Brexit Threats To Liverpool Creative and Digital Sector
So, what are the threats to Liverpool creative businesses? Citrus Suite’s CEO, Chris Morland, considers, “There are 3,500 creative and digital businesses in the Liverpool City Region, employing almost 20,000 people. It’s hard to come up with any positives of Brexit for this sector. Let’s try – a weak pound means our products and services are competitive to foreign buyers. This means exports could increase – which could help reduce the UK’s deficit, but the fact we’ll have poor and hastily arranged trade deals means these contracts are in jeopardy.”
“The real conversation is about whether the majority of local businesses are resilient enough to survive the impact of leaving the EU. The greatest threat is the damage that will be done to the national economy. A contracting economy means our clients and partner companies stop investing into innovation, others relocate outside of the UK, and for Liverpool it means our businesses win less contracts. There is less demand for our services and products.”
I asked Chris about the situation with grants and access to EU talent, Chris: “When the EU funding dries up there will be clear problems. Companies that rely on EU grants and the like will obviously be impacted, as will those who subcontract work to Europe or need talent from Europe to fill jobs- it will hit some hard. The story that we’re being told is that UK government will look to guarantee to support some EU-funded projects, but I’m not sure Liverpool is positioning itself well to replace the lost EU support. London seems to be proactively lobbying, what are we doing locally?”
Tough Market Conditions
I asked Chris what Citrus Suite are doing to counteract the potential effects of Brexit. Chris: “I worked at a startup that suffered the effects of the financial crisis from 2007, so I’ve seen what can happen when market conditions get tough. Right now for UK software businesses, Brexit is causing nervousness in supply chains, and downstream investments are slowing. Organisations previously looking to commission big projects are now looking for the value option. At Citrus we are consolidating our service offering. Our technical capabilities are extremely strong, we’re small and agile and will ride the tough times ahead and maintain growth. But I’d prefer to see the whole sector buoyant, and there’s no Brexit option where that is remotely possible. It’ll take the ingenuity and hard work of SMEs to minimise the impact of Brexit.”
“Locally we can help, Citrus can have an impact within the Liverpool City Region – we have targets to invest locally, and we employ local staff on fulltime contacts (no zero hours). We’ll carry on winning projects from outside the city, and we’re looking to work with more Liverpool City Region (LCR) businesses, to form local partnerships. We have Citrus innovation labs for LCR start-ups, mentoring in the community, and we’re working with schools to help guide the next generation of developers and entrepreneurs. We are also looking at ways we can share our digital tools and expertise with other businesses to address some of the biggest issues ahead.”
From the conversation I had with the team of Citrus Suite, it’s clear that they are ready to take their success far beyond a ‘bad deal’ Brexit.
*According to expert independent research by Cambridge Econometrics, commissioned by the Mayor of London, 2018.
Posted, October 2018
Guest blogpost by Kerri Chamberlain.