In this article, Erica Wolfe-Murray, UK’s leading business expert, discusses the underexplored relationship between the Creative Sector and the UK government, urging the UK to focus on an often-ignored, increasingly powerful industry
When I am giving talks about my work within the UK’s creative industries, there is a sense of shock when the sector stats go up on the screen. From those who work in it as well as those beyond its boundaries.
Let me share them with you.
What is the creative industry in the UK?
The creative industries is the UK’s fastest growing sector generating £101.5 billion GVA. This is more than the automotive, aerospace, life sciences, oil and gas industries combined. Only recognized as a sector for under 20 years, a third of its workforce are freelancers and there are 284,000 companies – that’s 1 in 8 across the UK economy – 94% of whom have less than 10 employees. And it’s creating jobs at twice the UK industry average.*
It encompasses everything from film and tv, to theatre, digital games, architecture, fashion, crafts, VR, music – a broad church indeed.
But despite the value this sector brings to the UK, it faces many challenges and particularly in its relationship with government.
This difficult relationship starts in childhood.
Education and creativity
Recent changes to the education system means that arts are no longer included in the core subjects. With Amanda Spielman of Ofsted citing that she supported the shift back towards traditional academic subjects at GCSE. Yet children have natural creativity which frequently gets lost as they are channelled down this academic route. We need a mix of science and arts to build on the UK’s amazing creative success. Computer scientists and mathematicians alone can’t create the video games we all play, the movies we all watch – we need artists, illustrators and animators, too.
Computer scientists and mathematicians alone can’t create the video games we all play
The creative industries draw its employees from a wide range of school, college and university disciplines – both physical, creative and intellectual. In the UK we have the top two organisations in the world according to the 2019 QS Global University Rankings by Subject – the University of the Arts London and the Royal College of Art. These two are contributing to AI, VR, mixed reality, Clean Growth collaborating with a range of other specialist institutions across the UK.
But with high student fees, many less advantaged can’t afford this education with the concomitant expense of living in London or other cities whilst they study.
When starting their working lives, many creatives choose to start their own venture or work freelance. Often they partner on projects with a mix of commercial businesses, publicly funded organisations as well as other freelancers. This methodology is more widespread in this sector than any other. For example, a film project may have private funding, public funding, will be made by a studio with a host of other small business suppliers and countless freelancers. Once that film is over, the team breaks up only to reform with others on a new project.
When starting their working lives, many creatives choose to start their own venture or work freelance.
So, understanding how to collaborate with multiple people and develop strong partnerships quickly is one of the key underlying skills in this sector.
What problems do creatives face in the UK?
With this huge quantity of SMEs and freelancers come other critical sectoral problems.
Small creative companies are less able to gain investment, to access R&D funding, to apply for government initiatives.
However, 2018 saw the formation of the Creative Industries Cluster Programme. With £80m worth of funding from the Government’s Industrial Strategy and delivered by the Arts & Humanities Research Council (AHRC) on behalf of UK Research & Innovation (UKRI), the CICP has brought together academics and industry to form nine R&D Partnerships across the UK dedicated to creative innovation. This collaborative effort has the experienced creative luminary, Andrew Chitty, the Creative Economy Champion at the AHRC, leading from the front.
Although led by large companies and universities, each cluster will involve small companies, develop start-ups and attract freelancers. Creative companies and people like working close to others- they are mutually supportive in their thinking, their practice. For example, InGAME (Innovation for Games & Media Enterprises) is a dedicated centre helping to de-risk R&D in Dundee, is determinedly working with scale-ups, new companies and SMEs in order to thrive.
Another issue facing our emergent companies is that much of the creative sector value and growth comes from the exploitation of IP. Yet so many small ventures and freelancers have shockingly limited knowledge of what IP they could or do already own. Nor do they have the knowledge or business tools to monetize it. Well-nurtured IP could form so many of their ‘pensions’ but they have little or no understanding of it.
The UK’s Government’s much-praised Intellectual Property Office down in Newport is trying to address this balance, developing easy-access programmes for schools, universities and business advisers to help widen the understanding of IP, but they don’t cover the commercialisation of it.
For most creative companies, IP is seen to be the remit of lawyers, whereas, in truth, the IP framework is there to ‘foster an environment in which creativity and innovation can flourish’ to ‘enable people to earn recognition or financial benefit from what they invent or create,’ to quote the World Intellectual Property Office (WIPO) definition.
This makes IP the remit of all creatives too.
What has the UK government done for the creative industry?
When Liberal Democrat Vince Cable headed up the Department of Business, Innovation & Skills, he funded a fast-growth SME support package called Growth Accelerator, delivering coaching and knowledge transfer to companies across England. Highly successful, its three strands of support covered business development, access to finance and growth through innovation, linked into IPO support to raise awareness of IP opportunities.
Government procurement policies don’t really appeal to the bulk of creative sector companies either. They favour bigger businesses, with access complex and time-consuming. Most civil servants have never worked in a small company, let alone a creative one, so lack of understanding is endemic.
Most civil servants have never worked in a small company, let alone a creative one, so lack of understanding is endemic.
Many creative organisations work in a mixed economy. Some offer commercial activity for financial returns with the NHS and local government proving good customers, working with app developers and the like to streamline services and find savings.
Other creative organisations are grant-funded delivering projects for the public good. Although applications for grants are painful to do, they do allow practitioners to take creative risks in a way that commercial organisations might find hard.
The UK government does support the creative economy in other ways too.
Tax incentives exist for orchestra, film, theatre and other areas. And the robust R&D tax credit system has been used by a number of the companies I have worked with over the years. Relatively straight-forward to access, once your science or technical innovation project is approved in advance, you can claim the R&D costs back swiftly. 39,000 companies in the UK claimed back £3.5 billion in tax relief last year.
Bath-based video production company, Suited & Booted Studios, developed a curated data archiving system for clients which received R&D tax credit support.
The answers to some of the questions raised here are being researched by organisations such as the Creative Industries Federation, universities and local government across the UK. But I suspect that little will change as most of the practitioners in this sector like working the way they do. More IP knowledge, more inventive support similar to the Growth Accelerator model and the resurgence of creative education in schools would be a good target however, then we would enjoy seeing the sector grow even faster!
*Statistics provided by the Creative Industries Federation
Erica Wolfe-Murray
An innovation and business expert
She has recently published ‘Simple Tips, Smart Ideas: Build a Bigger, Better Business.‘
