Post-Brexit Britain 'may lose out', warn international bosses

Post-Brexit Britain 'may lose out', warn international bosses

The UK operations of many publishing houses with premises in numerous countries risk finding themselves sidelined in favour of other locations if a “hard Brexit” introduces restrictions on free movement of people, or if currency issues continue, some c.e.o.s have told The Bookseller.

Interviewed during last week’s Frankfurt Book Fair (19th–21st October), Cengage Learning c.e.o. Michael Hansen confirmed his company would consider moving its European headquarters from Andover, Hampshire, should a “hard Brexit” strategy be adopted. “Our concern on the Brexit side, which many businesses in the UK share, is Britain regressing to an isolationism that will make it harder and less attractive for us to do business in the country.” Hansen added that he would “observe what transpires over the next couple of months” before making “a decision that is in the best interests of the company”.

Derk Haank, c.e.o. of Springer Nature, which has offices throughout Europe, said that while he would “never actively move out” of London—because the Brexit problem is “not big enough”—any restriction on staff movement could result in rerouting people elsewhere. “If there is any barrier [to living in the UK], we would say in the future, ‘Why would we move people to the UK?’,” he said. “Our staff is truly international, 26% of staff in the UK office are non-UK citizens, 16% are from the EU. If [employees] have to fight to get in [to the UK] or their partners have to, they will say, ‘Madrid will suit me nicely— or Amsterdam, or Berlin.’ And there is a danger, short-term, that people feel less welcome in the UK and will vote with their feet.”

On the subject of the UK missing out on EU scientific research funding after Brexit, Haank noted: “Anything that affects funding is not good for us because funding means more output, more articles, more books. The good news is that we are operating in a growth market, and as the world gets richer there is more funding. We don’t mind if that is in London or Shanghai. We go with the flow to collect articles.”

A Swede deal

Bonnier Publishing c.e.o. Richard Johnson said the publisher would not downsize in the UK as a consequence of Brexit—“in our case there is no risk because of [parent company] Bonnier’s commitment to us and our growth to [annual sales of ] £200m”—but it would look to adapt its strategy. “We will accelerate our US mass-market expansion plans to gain more US dollar income,” he told The Bookseller. “We already have 45 people in New York City and San Francisco, and we will build further on that.”

Pearson c.e.o. John Fallon noted in a blog post than more than half of Pearson’s revenues are in US dollars, putting it in a strong position. “Although we care deeply about the UK, we are the world’s learning company,” he noted, adding: “We will continue to be advocates for a world that is more open and connected. It is vital that the UK’s world-class universities should continue to attract the brightest young people from around the world to enrich our education community.” Fallon said the company would take its time to work through every implication the UK’s exit from the EU could have on its business.

Wiley has set up a Brexit Strategy Group to monitor developments. A spokesperson commented: “The UK will continue to be a highly valued location for us—it is an important centre of talent, a vital market and critical to our future. We are committed to supporting our colleagues in the UK and Europe, and helping manage any uncertainty or disruption.”

Ian Hudson, c.e.o. of DK, said the immediate impact for him had been on recruitment: “I would like to be able to provide assurance to those staff affected that their futures are secure and the government should act soon to end any uncertainty. We are already seeing this affect the type of people applying for jobs with us, which impacts on the diversity of the workforce, which we all need to improve on.”

A report on Brexit released by the Creative Industries Federation this week warned that restricting movement risks compromising creative and commercial success. “There is a very real risk that skills shortages in the UK will be made worse—at least in the short to medium-term—by any restriction on freedom of movement that comes with tightening immigration laws and the UK leaving the European Union,” the report read.