Why the government needs to do more to support agency start-ups

95% of creative companies in the UK employ fewer than 10 people, yet we obsess over big agencies and holding groups.

At a Downing Street reception for the creative industries this week, Theresa May praised the contribution people in advertising, publishing, art, fashion, design and music make to the economy and national life.  

Recognition is nice, but it doesn’t guarantee a healthy future. As advertising alone generates €7 for the economy for every €1 spent on it, it’s in the country’s interest to start protecting it for the long run. To do this, the government needs to find a way to support the best of the emerging agency start-ups and SMEs among us.

Why? In the same way that new business is the lifeblood of an agency, the agency start-up is the lifeblood of our industry. Independent agencies are home to genuine creative entrepreneurs, where creative cultures live strong and pure, where only the good traditions live on and where a new kind of proposition can be found.

A total of 95% of creative companies in the UK employ fewer than 10 people. Yet we obsess over big agencies and holding groups and the transformation they’re going through, regardless of the fact that they are yesterday’s model. What about supporting the smaller independent agencies that make up the majority of the ad industry and are clearly where its future lies?

SMEs pay the same tax and are treated the same way in the pitch process and by client procurement teams as the big players. There are no concessions made because fundamentally we live in a survival-of-the-fittest capitalistic system. Independent SMEs know only too well the risks they take as they manage their overhead-to-cash-reserve ratios in an unpredictable project-based world. For the independent agency, there is no forgiveness doled out to an underperforming office of the empire from the New York HQ and private equity often comes at the cost of culture – something we know is vital to productivity and sustainable company growth.

Protecting smaller agencies is how we can safeguard the long-term talent economy in a sector that provides highly skilled jobs right across the board, including technicians, strategists, data scientists, producers, creatives, researchers, designers, coders, set builders and make-up artists. These are the people that Theresa May described in her speech as "the unsung heroes" without whom our creative industries would not be the worldwide success that they are. 

Let’s face it, the next generation is no longer aspiring to the WPP grad scheme, but rather the new graduate opportunities and apprenticeships in the thousands of small agencies across the country - the best of whom deserve the same nurturing and investment that’s been bestowed on other industry hubs, like Tech City. 

We need to stop with the predictable David and Goliath rhetoric perpetuated by fiercely proud-to-be-independent agencies. Smaller agencies are now at the frontline of advertising, competing with and winning against the ‘big boys’, with client solutions that are often more attractive and progressive. 

On the eve of Brexit and during the industry’s ‘perfect storm’, as described by Sorrell (may he or may he not rest in peace), the government has got to do more for the companies in this industry that are by their nature fitter for the future.

Zaid Al-Zaidy is the chief executive of Above & Beyond and group CEO of newly formed creative group The Beyond Collective

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