Talent in music, film, TV and new media is forced to leave Wales because their industries are too small, it is claimed.
Welsh actors Ioan Gruffudd and Matthew Rhys shared a flat for many years in London
Now a drive is being launched to halt the brain drain of creative people.
A review into industries such as film, TV and animation has found they have too little impact and must grow faster.
The Welsh Assembly Government, which will unveil its conclusions following the review later, has promised a new £7m investment fund.
The creative industries, which also include new media such as software, trade on intellectual property (IP).
But many companies are forced to sell their IP in one-off deals in order to survive, depriving themselves of a future source of income.
Welsh independent companies are not big enough to compete, with some including pop and rock artists, having to leave Wales to compete.
The new creative IP fund aims to counter this by investing in creative projects which will boost the industry in Wales.
In return it will get a share of intellectual property rights.
Huw Eurig Davies, who represents about 80 independent producers in Wales, said: "The companies are often very small and not big enough to playing on the international stage.
"It's one thing coming up with an idea but then you need somebody to fund the idea.
"If you are entering into a negotiation and you haven't got anything to bring to it yourself, you are more than likely to end up having to give something away and more often than not, that's where start having to give away chunks of rights.
"If the fund can help put something in place where you can onto more of your IP, then that money when you come to sell the program or exploit it in whatever way can be returned within the company for future developments."
Assembly Economic Development Minister Andrew Davies said for too long Welsh creative talent had left Wales, and he wanted to keep it in the country and profit from it.
"The value of what there is produced, which is in music's case the copyright, the rights to play the music, very rarely ever comes back to Wales," he said.
"The whole idea of the creative industries strategy is to make sure that we capture the wealth generating part of all that creative activity so we can create jobs and wealth and prosperity here in Wales."