Brexit, talent and tech

The UK, and London in particular, has established itself as an alternative tech centre to Silicon Valley or the Boston/Harvard cluster – but Brexit undermines everything, writes Dominic Mills

In the wake of last week’s Brexit shock, Cannes seems irrelevant.

Of the big winners, the one that interests me most is JWT Amsterdam’s work (it’s not really an ad, but it defies conventional labelling) for the Rembrandt Museum and its sponsor, Dutch bank ING.

Co-operating with Microsoft and Delft Technical University, JWT set out to recreate ‘the next Rembrandt’ – the painting the great artist never produced, derived through hugely detailed analysis of all his work down to thickness of paint and brushstroke style.

Directly, it doesn’t have much to do with JWT’s client ING, except that by association the bank links itself with the culture and history (i.e. sponsorship of the museum) and a modern take on data, technology and partnerships. It’s also bold and not without risk, a line banks need to be seen to tread (but carefully): if you’re going to mess with Rembrandt, you better get it right.

The other benefit of Cannes was that, at the moment the Brexit earthquake struck, most of the people who matter in advertising were congregated in one place, making it fertile ground for instant reaction.

In the long tradition of the Dunkirk spirit, there were the usual ‘good-old-Britain, we’ll-muddle-through’ comments, alongside some more sobering views. Among those who pulled no punches were Andrew Dimitriou, president of Y&R Europe, and Lucy Jameson, CEO of Grey London.
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Dimitriou described the consequences so: “Short-term isolationist thinking has won against long-term creativity and collaboration. A nation once so inherently innovative will lose its place of honour at the global table. The impact on ‘brand’ Great Britain will be immense.” I don’t disagree.

Jameson focused on the talent issue: “I worry most about a talent drain. At the moment we have an amazing array of nationalities in our office in London – French, Spanish, Danish, Swedish, German, you name it. Over time, more clients will want a European hub in Europe.” Again, it’s hard to disagree.

Mediatel’s own list of commentators spoke here, many focusing on the financial hit to the industry.

Of course, none of the Brexiteers who voted out because ‘I want my country back’ – a concept none of them interprets the same way – will give a chuff about any of this, and by the time the effects are felt they will be dead anyway.

But money and talent are closely interlinked. There will be a short-term hit as spend slows, and everyone tries to figure out what will happen in a post-Article 50 world.

Agencies will be squeezed, and inevitably headcount and recruitment will be subject to microscopic (and not favourable) analysis by the bean counters.

Medium-term, as Jameson points out, multinational corporations will have to decide whether to move their regional HQs to Europe or not. Chances are they will.

New ones (especially from Asia, and rising US tech stars) will also have to decide. But why open a Europe HQ in the UK (and many are outside London) if we’re not part of Europe?

That in turn will affect agencies. Yes, we live in a semi-virtual world, and technology circumvents geography and borders, but one of the cardinal rules of agency life is that you go where your clients are and where decision-making is concentrated.

If the big clients aren’t in the UK, so the knock-on effect on agencies will be commensurate. One of the joys of going into any London agency of any discipline is to hear and see the concentration of international talent. Language and cultures collide, and great things emerge as a result. Again, that is one of the things that makes London such a magnet for talent and creativity, and why most of the hot agencies (from the US and Europe) all want to be in the capital.

And then there’s the world of ad and marketing tech, where perhaps the effects will be hardest-felt. Over the past five years or so, the UK (mainly, but not exclusively London) has established itself as an alternative tech centre to Silicon Valley or the Boston/Harvard cluster.

I’ve spent many hours talking to start-ups – and there are so many it’s hard to keep track of them – and the diversity among their staff is astonishing. Ukrainians sit alongside Slovakians, Irish, French, Swedes, Germans, Serbs, Sri Lankans and yes, more than a few UK citizens. They come and go fast, and move as fluidly as mercury in search of opportunity.

Talent clusters around talent, but it is also attracted to money – aka London, the financial capital of the world. If the VC and private equity investors who focus on tech feel they need to downgrade their London operations, then the tech start-ups will move too.

One place they might move to is Paris. This week sees a huge tech event there, Viva Technology, designed to bring start-ups in all sectors (ad/marketing/financial/healthcare tech and so on) together with big corporates and investors.

Is it a co-incidence that it’s the week after Cannes, an ideal stopover for many clients returning from Cannes? No. Is it a co-incidence that it’s co-sponsored by Publicis? No.

Indeed, it’s part of Publicis’ big play for tech, which is why our old friend Maurice Levy has described it as ‘Davos meets CES‘.

Viva Technology will also see the unveiling of round one of the Publicis 90 at 90 initiative in which, to celebrate its 90th anniversary, it promised to invest in 90 start-ups.

As I understand it, around 25 of those start-ups have been launched by Publicis employees themselves, testament to the carrot-like effect of investment money. Start-ups being nimble, they will have no problem following the money wherever it is.

Of course, that doesn’t mean the centre of gravity for tech start-ups will shift to Paris overnight, but it’s an indicator of the many and varied threats to the UK advertising scene posed by Brexit.