The impact of Brexit on creative industries

Ad agencies and the creative industries are an important part of the U.K. economy, but a vote to leave the European Union may force many to relocate or recruit elsewhere, warned industry insiders.

The creative industries accounted for 5.2 percent of the U.K. economy, worth £84.1billion ($120.8 billion), and employed 1.8 million people in 2014 according to a recent report by the U.K.'s Department for Culture, Media and Sport.

But the U.K. referendum in June on membership of the EU could create problems for these companies.

Nick Fox, founding partner at Atomic London
Atomic London
Nick Fox, founding partner at Atomic London

"If Britain voted to leave the EU, the most tangible impact on adland would be how talent comes in and out of the country," Nick Fox, founding partner at ad agency Atomic London, told CNBC via email.

"The easy hiring and movement of staff is a major pillar of the concept of Europe from a business standpoint."

Fox also warned that some companies may leave if the U.K. voted to leave.

"I can certainly imagine international agencies currently based in the U.K. wouldn't think twice about relocating if it came to Brexit," he said.

Nigel Vaz, chief executive EMEA of digital marketing agencies SapientNitro and Razorfish, didn't think any agencies would leave immediately, but may do so in the long term impact.

"As client companies weigh up the eroded benefits of Britain's pool of skilled talent and status as an international trade hub against the ease of doing business from a different EU member state, they may choose to move their central operations," Vaz told CNBC via email.

"This, in turn, would force agencies such as ours to shift their hiring emphasis away from London, as the hub, to rebalance and build bigger teams in other EU states."

Vaz explained that, currently, his agencies use London as a central hub where they recruit employees then move them to clients in Europe.

"This is currently facilitated by the core principles of the single market for services, and free movement of workers; were that to end we would have to reconsider our strategy of distributing talent and expertise from London, and hire locally in order to best serve client needs," he said.

"Were [London] to lose its status as an open city and were large companies to relocate, it would become a less attractive destination for skilled talent and digital entrepreneurs," he warned.

Both Vaz and Fox expressed their belief that Britain should remain within the EU.

"The U.K. prides itself on being a leader in the ad industry," said Fox. "And I feel that this would change – both commercially and attitudinally – if we were to isolate ourselves from the rest of the world in 12 months' time."

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